What to Do When a Client Doesn't Pay

Most late invoices are not refusals. They are invoices that went to the wrong inbox, arrived without a purchase order number, or landed in a payment run that had already closed. Treating the first stage as a collections problem damages a relationship that was never actually in trouble — so the sequence below starts gently and hardens only as it needs to.

Days 1–7 past due: assume it is an accident

Send a short, neutral reminder that re-attaches the invoice. No apology, no accusation. The goal is to make paying easier than replying.

Days 8–30: make it a conversation

Move from email to a phone call. Email is easy to defer; a person asking a direct question is not. What you want from the call is a specific commitment — a date, and the name of whoever approves it.

If cash flow is genuinely the problem, a payment plan you both write down beats an invoice that stays unpaid indefinitely. Partial payment also restarts the clock on the debt being acknowledged.

Day 30 and beyond: put it in writing

A formal demand letter is the last step before a claim, and its value is as much evidential as persuasive — it establishes that you asked clearly and gave a deadline. Include:

• The invoice number, date and amount outstanding
• A summary of previous attempts to collect, with dates
• A firm deadline, typically 14 days
• What happens if the deadline passes

Send it so that delivery is verifiable. Keep every reply.

Small claims court

Small claims court is designed to be used without a lawyer, with simplified procedure and lower filing fees. Whether your claim fits depends on your province's monetary ceiling, and those ceilings differ enormously — from the low tens of thousands to six figures.

If your claim exceeds the limit, you generally have two options: abandon the excess and stay in small claims, or file in the superior court, where procedure is more complex and costs are higher.

There is also a limitation period — a deadline after which the claim can no longer be brought at all, regardless of merit. It is commonly two years from the date the debt became due, but it differs by province, so confirm yours early. A claim that is time-barred is not recoverable through any court.

Writing it off

At some point the cost of pursuing a debt exceeds the debt. When you write one off, do it properly in your books rather than deleting the invoice: the invoice was real, the revenue was recognised, and the write-off is what reverses it. Deleting the record instead leaves your income overstated and your paper trail with a hole in it.

If you had already remitted GST/HST on that invoice, there is a mechanism for recovering tax on bad debts. The calculation depends on how much was paid and when — worth asking your accountant to handle in the period you write it off.

Making it less likely next time

• Invoice immediately. Recovery rates fall with every week between the work and the bill.
• State terms on every invoice. "Net 30" and any late-payment interest need to be visible before the work starts, not after.
• Take a deposit on larger work. A client who has paid something is materially more likely to pay the rest.
• Send automatic reminders. Most late payments resolve at the first nudge, and a system that nudges on schedule spares you the awkwardness of deciding to.
• Give them an easy way to pay. Every extra step between reading the invoice and paying it is a place the payment stops.