How I Recovered $145K Using Just Two Emails

Issue #3: What to Say When Your Clients Go Silent on Payments

Anil Gupta
October 05, 2024 • Reading Time: 7 minutes

Welcome to Peaceful Growth, where you will learn simple tips to grow your agency to $5M without working overtime.

In this issue, you'll learn:

How to handle non-paying clients
Effective email strategies to recover unpaid invoices
Key contract clauses to include for payment protection
Actionable steps to take if the emails don’t work
Pro tips for preventing payment issues in the future

What just happened?

It’s the worst feeling—having a great relationship with a client, almost like they’re a friend, and then suddenly... they delay paying an invoice, ignore your reminders, make empty promises, and finally, stop responding altogether.

You’re left wondering, “What just happened?”

If you’re an agency owner, chances are you’ve dealt with this before. If you haven’t (I hope you never do), you probably will at some point. Be prepared!

In 16 years of running my agency, I’ve had about six clients put us at risk of not getting paid for our hard work. Out of those, I managed to recover payment from 3 of them, totaling over $145,000. Unfortunately, the other 3 were a loss, costing us over $50,000.

Today, I’m going to share two email templates (plus a few tips) that helped me recover $145K from a few of those tricky situations.

Subject: Can you help me here, please? Anil from Multidots

Hey John,

It has been quite a while, and I wanted to connect with you personally. I wish it were under different circumstances.

My team informed me about a few invoices (around $xx,xxx) that have been significantly delayed.

I am reaching out to you directly because this situation is putting me and my business in a very uncomfortable position. As a fellow entrepreneur and founder, I’m sure you understand how critical timely payment (and cash flow) are for the health of the business and the morale of the team, especially given the time and number of attempts my team has made in following up on these invoices.

I’ll be honest with you, we usually don’t extend the flexibility in payment terms that my team has offered you. We have been bending our processes and policies in good faith to support your business.

I hope you understand my position and respect the relationship we have built. I kindly request that you help process these outstanding invoices at your earliest convenience or at least share a plan for paying these invoices.

I would really appreciate (as founder to founder) a clear and quick communication from you specially on when (and how) are you planning to pay this invoices.

Email #2

Subject: <Reply to the first email>

Hi John,

I reached out to you last week regarding the overdue invoices, but I haven’t received any response. It’s sad to assume that you may have no intention of settling these outstanding payments.

My team has invested significant time and effort into your projects, and we deserve to be compensated for the work.

Our contract clearly outlines the payment terms, which you've failed to honor despite multiple reminders. I've now shared our contract with my legal team, and they've confirmed that we have a strong case.

[Put the screenshoot of your payment terms from proposal or service agreement]

If we do not receive confirmation of payment within 24 hours of receiving this email, we will have no choice but to escalate this matter to our legal and recovery team. This will include taking all necessary steps to secure the payment through legal channels. This situation will impact both your business and personal credit scores, as it will be reported to the relevant credit agencies. I’m disappointed that our relationship has come to this point, as it could have been avoided (we still can if you pay in 24 hours) .

Effective immediately, we are removing all our developers from your projects and revoking your access to our systems.

I urge you to take this matter seriously and resolve the outstanding payments immediately.

How to Use These Email Templates

Before hitting send, make sure this really is a critical situation and that the client has shown little to no intention of paying up.
These emails should be sent directly by the founder/CEO of your company.
If you don’t hear back within a week after sending Email #1, go ahead and send Email #2.
You should also be prepared to lose the relationship entirely. After these emails (especially #2), it’s unlikely the client will want to continue working with you.
Take these actions after sending email #2:
- Block their access to your Project Management System.
- Block their access to project code.
- Inform your delivery team about these actions.
Have a Solid Agreement in Place: Make sure your contract includes these terms:
- The client covers attorney fees for any disputes related to non-payment.
- A 1.5% monthly interest fee (or the maximum allowed by law) will be applied to overdue payments.
- A 10% fee of the total project cost will be charged if the client pauses the project for more than 15 days.

What to Do If This Doesn’t Work?

If you still don’t get a response, consider the following options:

Consider Small Claims Court: Depending on your state, you might be able to file a case in small claims court without a lawyer. This step alone can sometimes create enough pressure for the client to pay up.
Hire a Recovery Agency: A recovery agency can help collect unpaid invoices on your behalf for a small fee. It’s worth exploring if the amount owed justifies the cost.

👋 Until next time, Anil / CEO and Co-Founder of Multidots, Multicollab, and Dotstore.

FYI…I also write about personal growth and Enterprise WordPress.

P.S. Are you keeping track of how clients are finding your agency? Funny enough, a few of ours said they found us through ChatGPT. I’m curious—are you getting any leads from AI tools? Shoot me a reply and let me know!

More Ways to Grow Your Agency

#1: I’ve interviewed founders who have scaled their businesses from $500K to $10M. Want to hear their secrets? Tune in to the Peaceful Growth Podcast for insights on how to grow your agency.

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