You finished the work, and it is time to ask your corporate client for payment. Suddenly, they begin to use various excuses to explain their delayed repayment. While this can seem valid at first, it is important to understand that these are tactics to protect your customer’s cash flow at your expense.
The pay-when-paid trap
Your client avoids payment with the pay-when-paid excuse. Be vigilant when they use this because such a provision is unenforceable in the California trade industry. Unless you signed a specific, legally binding clause, you are a creditor, not a silent partner in their financial struggles. Remember that their accounts receivable are not your concern.
The lost invoice ghosting
Lost invoices are a common excuse that debtors use. They can say that they did not receive an email, which can make you wonder what you did wrong. Instead of letting them win, check your communication thread to confirm whether you sent the invoice to the correct client. Then, send a reminder email with a note that addresses misunderstandings.
The shoddy work diversion
After fulfilling the core requirements of the contract, your client suddenly finds flaws in your goods and services only after the bill is 30 days late. They are likely using a quality dispute to trigger a discount. Under the substantial performance doctrine in California, your client cannot legally withhold 100% of your payment over minor details.
Putting your foot down to recover owed money
Polite reminders have a shelf life. If your follow-ups are being met with silence or more excuses, changing your strategy is a must. Seeking out the advice of an experienced collections attorney can provide valuable insights into your next steps for recovering owed money.