Customer Refusing to Pay for Work Done: What Next?

It’s every freelancer’s and contractor’s worst nightmare: You do the work, but the customer refuses to pay.

It’s frustrating, but the good news is that the law is on your side. So let’s take a look at the steps you can take if a customer refuses to pay for work done. We’ll also look at some things you can do to prevent this from happening in the future.

What steps can you take if a customer refuses to pay you after you’ve done the work?

Are Invoices Legally Binding?

Invoices are legally-binding documents, but only when both the client and the customer are registered for VAT.But even if you’re not registered for VAT, the government recognises that, when you send an invoice, you have a right to get paid.

All invoices should include a payment date. Yet even when you don’t specify a payment date with your customer, the government advises that customers should pay invoices within 30 days of receiving them.

Customer is Refusing to Pay for Work Done – What Do Now

First, Talk to the Customer

Has the customer made it clear that they won’t be paying the invoice, or have they simply failed to pay it yet?

If it’s the latter, first get in touch with the customer, and ask for an update. If you didn’t specify a payment date, and if you sent the invoice fewer than 30 days ago, then it might just be that the customer hasn’t got around to paying just yet.

The customer might have other reasons for not having paid yet, such as accounting or cashflow issues. In any case, they should be able to let you know when they expect to be able to pay, and that could be the end of it.

When reaching out to the customer, stay calm and be as polite as possible. Unpaid invoices are frustrating, but it won’t help to lose your cool at this stage.

What To Do If a Customer is Refusing to Pay For Work Done

So what if the customer’s not simply been forgetful? What if they’re making it clear that they’re unhappy, and that they’ve no intention of paying the invoice? The law is on your side here. But before you escalate the situation, it’s best to try and settle things amicably.

Don’t rely on emails or phone calls. Instead, arrange a face-to-face meeting with your customer. Ask them to explain why they’re not happy. Maybe it won’t take much extra work to make things right. Or maybe you’ll be able to make them see reason, and they’ll eventually agree to pay.

It’s vital that you’re as calm, controlled and polite as possible during this meeting. Don’t go in with the attitude that you’re there to make them pay, as you may end up losing your temper and making things even worse. Instead, go in with the attitude that you’re there to resolve the situation, even if it’s through compromise.

I’ve Talked to the Customer and They’re Still Refusing to Pay. What Now?

If the customer’s being totally unreasonable, then it’s time to escalate things.

You have three choices here:

  • Mediation – You can arrange for a mediator to step in to act as an impartial third party referee in your dispute. They’ll try and find a solution that works for everyone.
  • Statutory Demand – Think of a statutory demand as a “red letter” version of an invoice. It’s a legally-binding demand for your money. If the customer ignores this, they’ll be liable for legal repercussions.
  • Legal Action – Alternatively, you can just take the client straight to court. You’ll have to make your case that you completed the work to the agreed standard, and they’ll have to make their case for refusing to pay.

Find out more about these escalation options. Each one of these approaches will cost you, which is why it’s best to try and resolve the issue yourself first. And given the costs, you should only try and escalate things if the customer owes you a significant amount.

If you think the costs of pursuing payment will outstrip the payment itself, then it might be best to just let it go. Resolve to never work with that client again, and think about how you might avoid situations like this from ever happening again.

How to Avoid Late Invoice Payments

Here are three things that might help you either avoid these situations in future, or at least manage them effectively:

  • Put everything in writing. Make sure every customer signs a contract before you agree to work for them. This contract should put as much as possible into writing – the agreed payment dates, the timeframe of the work, and the steps you’ll take if the client’s unsatisfied with the work. Agreeing all this upfront might make it less likely that the client will simply refuse to pay. But if they do, and you have to escalate things, then your document will help you make your case in court.
  • Get an accountant or a financial advisor. Not only can they chase up invoices on your behalf, they can also help you set up a cashflow system to ensure that, even if a client refuses to pay, it won’t affect your bottom line too much.
  • Get insurance. We offer specialist insurance policies for freelancers and contractors which can cover many things, including your legal fees should you ever have to take a client to court.

If you’ve got any questions about insurance for self-employed freelancers and contractors, please contact the Tapoly team at, call our helpline on +44(0)2078 460 108 or try our chat on our website.