We have been getting a great deal of questions about how to deal with conflict, non-paying clients and what are the legal steps involved.

We will be dedicating a 2 part blog series to the topics of:

1. Dealing with non-paying clients; and

2. The Legal Steps to follow when dealing with non-paying clients


How to Deal with a Non-paying Client:

Any small business owner has to deal with this at one point or another…unfortunately. Becoming business-streetwise is not just a skill you learn within 24 hours, and takes some time. Hopefully this blog can share some light on how to deal with these difficult situations.

If you are reading this and feel stupid because at some point you allowed your client to pay after the product has been delivered (because they had the world’s worth of reasons why they couldn’t pay today), or trusted someone to go on a handshake and in neither of these cases the client ended up paying. Don’t feel bad! The hard truth is that we have all been through these situations as small business owners and learn that the real world made up of all kinds of people, including those that don’t pay. You will have to become savvy in the ways of legal steps and conflict in order to survive as a small business owner.

The main theme of all of our blogs is basically to HAVE A CONTRACT! It makes life so much easier when having to deal with difficult clients or non-paying clients. Because it enables you to have a leg to stand on.

The steps when dealing with a conflict situation with your client are:


Start with the contract. What was the client supposed to do and what did he/she not do? Which payment was it?

You need to know your own contract, because this is what you and the client have agreed to about what needs to happen, when and how.

If you don’t have a contract to go on, then you are going to have to simulate the verbal terms that you and your client agreed to. Perhaps an email here and there or a whatsapp that can indicate what the agreed terms were.


Either you have a conflict situation on email or need to make a telephone call to your client. Both your email and your telephone conversation can follow the same trend. It is sometimes better to man-up and make the phone call first:

  • State the terms of the agreement. In your email you can refer to the actual clauses ie. Clause 2.1 etc. and then you can quote the terms of the agreement.
  • Again refer to your agreement and state the terms of the breach clause. You can quote the terms stating that if the client fails to meet his/her obligations then they will be paying damages or whatever your contract refers to.
  • Apply the facts (don’t get emotional). Just simply state that the client for argument’s sake instructed you on this date, the deposit was paid, the balance was due on this That is all, don’t get personal or emotional. Make this part as short as possible, a one-liner.
  • A good legal phrase that you can use would be to say: You have failed or neglected to make payment of the balance payable in terms of the agreement.
  • And then end off by saying, it has become due and you give them a certain amount of days (days as per your contract) to make payment.

STEP 2.1

If you are uncertain about dealing with your client telephonically, a handy tip is to write down what you want to say and keep the paper with you while you talk to them. Don’t be scared to be prepared before having this conversation.

It takes time to become fluent in dealing with dealing difficult clients.

MORE IMPORTANTLY after having had your conversation with the client, you absolutely MUST send a follow-up email confirming your conversation. Your email can follow the trend of STEP 2. Or if you and your client have agreed telephonically to a later payment date then put that in writing.


Diarize this matter for the period that you have stated in your email or you have had the telephone conversation about. The most important part of this step is to deal with everything emotionally: you need to place this at the back of your mind.


On expiry of the period that you have given your client. (This is not a made up date, it is the date in your breach clause or if you don’t have a contract it would be a reasonable time, normally 7 – 10 days).

If your client has not paid within this time then you are going to send your follow up email. Refer to your initial email and state that you they have not complied with the conditions of the agreement as highlighted in your agreement and as a result you will be proceeding with legal action.

Even if you are not going to proceed with formal legal action, state it. It is your decision whether you want to proceed or not.


Follow our PART 2 of this blog for the legal side and the next steps to follow.