What to do when your client doesn’t pay

Clients who fail to pay when presented with an invoice are a hazard when you’re running a business – and one to which the interior design profession is not immune. It might be that the invoice has simply been overlooked and, in that case, obtaining the money owed is straightforward. However, non-payment can prove more awkward to resolve on other occasions, cause great stress, and take up the time and attention you need for other projects.

However, while designers cannot prevent late or non-payment of invoices by clients, you can ensure you have acted in such a way that you will more easily be able to recover the money you are owed. Equally, there are resources you can draw on if you need assistance in recovering your fees.

We asked BIID Past President, Gilly Craft, to discuss how frequent an issue failure to pay for interior design work is, the steps to follow if it happens to you, and what precautionary measures you can take.

How common is it for a client to not pay?

Sadly, very common. People will say it is recession, cost of living crisis, etc. but to be honest, most of the time clients do not want to pay and will do anything to find a loophole. The crucial thing is to have your terms and conditions correct and in place on all your paperwork. Make sure you have a contract that reflects the terms and conditions and payment terms. Have a due date on the invoice, together with a statement that you will collect a late payment fee and interest if the invoice is not paid. The key is to follow your own terms and conditions and not allow things to slide.

How time-consuming can it turn out to be when a client doesn’t pay?

Very, and this can put you off pursuing the debt, but you must remind yourself that you have earned this money – it is yours. Make sure you follow the terms of the contract (RIBA/BIID Domestic / Concise Professional Services Contract 2020 for Interior Designer Services) which has excellent clauses to cover this eventuality. If you don't already use these contracts, then I would suggest you do. They offer a lot of protection and cover late and / or non-payment of fees. For example, the client has to inform the designer within a set time that they are not going to pay and the reasons for this. If that is not done, then you just move forward.

What are the first steps you should take when an invoice becomes overdue?

Contact the client either by email or by phone. Send another copy of the invoice and just gently remind. People do forget and often this is enough, especially if you draw their attention to the late payment fees and interest.

What do you need to do next if the client still fails to pay?

Follow your terms and conditions, stick to them, and follow the processes you have set up. You need to keep the pressure on so that the client does not get the idea that you don't have the ability to stand firm. Stay polite and firm; let the client see that you will not be bulldozed.

When do you need to get solicitors involved?

If all the above fails, then a solicitor’s letter is next. If you belong to an association such as the Federation of Small Businesses, it has legal help and templates you can use. The next stage would be the County Court. The court will require both parties to mediate before any proceedings go ahead. This is advisable, as judges will expect the two parties to try every avenue before ending up in court.

What precautions should you take to ensure you can be most effective when a client fails to pay?

As I have said, your paperwork must be watertight. Be very clear on payment terms and make sure they appear in your contract, letters, and invoices.

Client failure to settle an invoice when it is due, or at all, is not a welcome event. Using the RIBA/BIID Professional Services Contract/s in your practice will ensure that the terms for payment are clear in the first place. Be prepared to be persistent, and follow the next steps if your efforts don’t yield what you are owed. 

BIID members can also use the BIID legal helpline. For more information, click here