Client Payment Delays: How Should Consultants Handle 11 Months of Non-Payment?

Hi all,

Please suggest what a consultant should do when a client is not ready to make payment even after 11 months, despite numerous follow-ups and reminders on a daily basis, or when they do not respond to emails. The senior management is also copied in the correspondence.

Thank you.

Dear Tajom,

Before providing your consulting services, did you acquire a Purchase Order (PO) from the client? Secondly, do you have evidence of providing your consulting services?

If you have a proper PO and records of providing your services, then you may send the lawyer's notice. If the client fails to pay you, then you may file a police complaint or take action as advised by your lawyer.

Thanks,

Dinesh Divekar

Thank you, Dinesh, for your valuable suggestions. I have the proper agreement signed by both parties. Additionally, I have the email in which the client sent the list of selected candidates. All discussions have been documented over email until the invoice was raised by both parties.

Regards,
Trapti
RM Global Consulting

Dear RM Consulting,

The case involves a breach of contract. As per the Contract Act of 1872, you are entitled to the agreed-upon consideration (the price) for your services, along with damages (compensation) and interest. First, review what your agreement stipulates as this will determine what you can claim. If the agreement is silent on this matter, the Contract Act will apply, and a competent lawyer can assist you in understanding your options. Regardless, your course of action would be to seek recourse in the civil court with jurisdiction.

Thank you.

Dear Trapti,

In the above matter, Mr. Divakar has rightly suggested the future course of action. However, always keep in mind that before taking legal action, it is important to ensure that nothing is amiss on your part. Have you checked why your client is not making the payment? Have they responded to any queries regarding the release of payment?

You should follow up with the nearest consumer redressal forum to see if they can address the matter.

Thank you.

Approaching Non-Payment Issues with Clients

The best way possible is to initiate a dialogue through third parties. If no impeccable solution is found, then the best alternative is to seek help from the local police station. Legal notices will only drag the matter, and the money and time spent will be valuable factors here.

The police station can be helpful if you have a good relationship with the authorities, and a small gesture of gifts might help to have matters of concern in your favor. In fact, we have enough experience of this sort to provide this answer. We have sorted the following if we ever sense trouble with a client:

- Sort out the matter with a dialogue
- Split the amount into installments for easy payment

We learned the hard way not to flare or trigger the anger of the client in the process. Good luck.

Dear All,

This is a problem that I am facing too. Bangalore Secretary, can you explain what you mean by Third Party? How will the police help? I am in Kolkata and I need help to recover payment from a client in Bangalore.