How to chase a late payment in a crisis


I’ve spent a good chunk of this week chasing late payments. 

I’ve written before about the emotional toll asking for money takes on you, but that’s at the best of times. Talking about money in the middle of a global crisis is something else entirely. I nearly cried this week when I entered into a protracted conversation with a client about outstanding payments. But! I did have the conversation and the result was a (partially) paid invoice.

Here are some thoughts on how to chase a late payment right now. 

Get ahead of the problem 

I already live by the mantra of chasing payment as soon as it becomes late, not just when I need it. The current situation has shown me just how important that mindset is because every underpaid invoice I have is now a potential debt I may never recover. I’m not letting anything slide right now because if a business that owes me money goes under, it’s going to take my paycheque with it. Under normal circumstances, I do my bookkeeping once a week but now I’m doing it every day. I’m in my bank account and tracking payments every single morning and chasing clients regularly. It’s exhausting but necessary. 

Make a corona cashflow tracker 

I’ve started a dedicated corona finances spreadsheet to track my money right now. I use Wave Apps to do my invoicing and expenses but I’m finding it’s not giving me enough information about the real-time state of my finances. In my spreadsheet, I have a tab for each month in which I record the invoices due and the status of them in one column. Then in the next column, I have all my outgoings for that month. I did some formula wizardry that tells me whether there’s enough coming in to cover what needs to go out. I’m also recording the money I’ve lost in this spreadsheet. I have a tab detailing the work that’s been cancelled or put on hold and how much money I’ve lost as a result. It might not be pretty but at least it will give you the full picture of what’s actually happening to your money right now. 

Show empathy

It’s soul-destroying to check your bank account each morning only to see that invoice still hasn’t been paid. As tempting as it might be to go guns-blazing to a client about your late payments, try to approach the issue with as much empathy as you can muster. Every single person has been affected by this virus in some way and no one is operating as usual. Try to get the client to explain to you why a payment is late. If it’s a cashflow issue on their end, is there a compromise you can come to? Remember there’s a human at the other end of that email address. 

Know your rights

Some clients will always be weasels. Assess whether the person you’re dealing with can’t pay you because their business is genuinely suffering or if they’re actually just being jerks. The pandemic doesn’t mean we now live in a lawless society; know what your payment rights are and exercise them if you have to. 

Pick your battles

All of my invoices are late at this point. Some are for thousands of pounds, others are for hundreds. Under normal circumstances, I would be issuing late payment fees left, right and centre, but I’m choosing to waive those fees right now. I’m going after the big invoices first because the amounts of money on the line are significant; if I don’t have the energy left to chase the smallest sums, I may well just prioritise my mental wellbeing and write them off. Everyone has a different battle to face right now, pick the ones you have the strength to fight.