How to deal with defaulters in a decisive and customer-focused manner
December 2025 - As an entrepreneur, sooner or later you will have to deal with customers who do not pay their invoices on time or, worse still, do not pay at all. How do you handle such cases professionally and consistently?
Often, non-payment starts with an innocent excuse: the invoice got lost in the mailbox, the person responsible is on vacation, or they are waiting for another payment. As frustrating as such excuses may be, it is not worth confronting the customer immediately. If you handle this firmly, you will not only avoid cash flow problems, but you will also maintain a good customer relationship.
The first reminder: friendly but clear
As soon as the payment deadline has passed, it is best to take action. A first payment reminder by email or post shows that you are serious about following up. Keep the tone friendly, but leave no room for doubt. For example, you could write that the invoice has “probably been overlooked” and ask for payment within seven days.
Always state the outstanding amount, the invoice number, and the due date, and indicate the consequences if payment is not made again—for example, that administrative costs or late payment interest will be charged.
Please note that in the case of a private customer, the law does not allow you to charge additional costs with the first reminder. The consumer then has fourteen days to pay the amount due free of charge. Such a letter must contain certain mandatory elements, such as the outstanding balance, your company details, and a description of the products or services provided.
Calling often works faster
If you don't receive a response within a few days of sending your reminder, a phone call is often more effective. Prepare for the call carefully: make a note of the invoice number, amount, and due date, and think in advance about what you want to achieve.
Call calmly, show understanding if the customer gives a reason, but stick to your position. After all, the responsibility to pay lies with the customer. If immediate payment is not possible, draw up a concrete payment plan, preferably with something in return, such as a small compensation for the extra administration.
After the conversation, always confirm the agreements made in writing—by email or registered letter. This will help you avoid misunderstandings and provide proof of what was agreed upon.
Persevere without giving in
If your initial reminders and telephone calls do not yield any results, send a second—and if necessary—a third reminder. In these letters, refer to your previous attempts and clearly state the consequences of further delay.
In the third letter, you may use stronger language. State that this is the final warning and that you will transfer the file to a collection agency if payment is not made within the specified period. This will make it clear to the customer that you are serious, while maintaining professional communication.
Legal action as a last resort
If that doesn't work either, you can hand over the collection to a debt collection agency or lawyer. They will ensure that the customer pays via legal channels, including interest and legal costs. This is obviously a last resort, as it almost always damages the relationship with the customer.
Prevention remains the best strategy
A clear credit policy and consistent follow-up on your invoices are the best protection against defaulters. Make clear agreements about payment terms from the outset and communicate them clearly. And if it does come to that, remain professional, consistent, and calm. This will not only increase the likelihood of payment, but also the likelihood that the customer will continue to trust you in the future.
