Best strategies for dealing with unpaid invoices and business policies

I’ve recently had three clients vanish after project delivery. One’s $2,400 outstanding and it’s been six weeks.

It’s clear I need to establish better policies upfront rather than always hunting for payments. This cycle is draining and hurting my cash flow.

I just ask for half up front now.

I had this exact problem three years ago. Lost $3,800 to two clients who just disappeared. Really hurt at the time.

What changed everything for me was switching to milestone payments instead of the usual deposit plus final payment. I break projects into 3-4 chunks and get paid before moving to the next phase.

For your $2,400 situation, try calling instead of emailing. I know it’s awkward but I got payments from two “vanished” clients just by picking up the phone. Sometimes their email is buried or they’re avoiding written replies.

Also started using contracts that let me charge for collection costs. Never had to use it but clients take it more seriously when they see that clause.

The milestone thing really works though. Smaller amounts are easier for clients to pay and you’re never too deep if someone bails.

Send a demand letter for the $2,400 with a 10 day deadline. Most clients pay up when they see you’re serious about collecting.

After that, file in small claims court. It’s usually under $100 to file and you can add that to what they owe you.

Going forward, get at least 30% upfront and never start work without it. I also put payment terms right in my contract so there’s no confusion later.

Stop all work the minute payment goes past due. That $2,400 client knows exactly what they’re doing. Send one final invoice marked FINAL NOTICE with a hard deadline, then move straight to collections or small claims if they ignore it. The key is never getting that deep again. I invoice weekly now on bigger jobs instead of waiting until the end. Keeps the amounts smaller and catches problems early before you’re out thousands.

Small claims court isn’t that scary. Filed twice and won both times for unpaid work.

That’s rough. Six weeks for $2,400 would stress me out too.

Here’s what worked for me after getting burned a few times:

Payment terms that actually stick:

  • 50% upfront before any work starts
  • Net 15 days (not 30)
  • Late fees spelled out clearly
  • Kill switch clause if payment is 10+ days late

During the project:

  • Send progress updates with remaining balance reminders
  • Don’t deliver final files until full payment
  • Use cloud storage you control, not email attachments

For your current situation:

  • Send a firm but professional final notice
  • Give them 7 days to respond
  • After that, consider small claims court for the $2,400

I learned the hard way that being too nice about payment just attracts clients who take advantage. The good clients actually respect clear boundaries and pay on time.