How To Get Back Money You're Owed (Without Breaking Any Kneecaps)

Whether it's regular clients, some freelance work you did on the side, an item you sold or just money that your mates borrowed from you, it's a pain trying to get people to pay you the money they owe you. With Christmas just around the corner, it's a good idea to start chasing down that money that is owed before everybody goes off on their holidays. You could probably use the cash to buy Christmas presents as well. Here are four ways to increase your chances of recovering the money.

Woman who wants her money back image from Shutterstock

Clayton Howes is the CEO of digital consumer finance firm MoneyMe

Of course you may have bills to pay yourself and face a cash crunch if the money doesn’t come in. One option could be a quick cash loan to tide you over. But with presents to buy and parties to go to, it makes sense to get your money in now.

So here are four tips from MoneyMe on how to increase your chances of getting paid:

#1 Ask for your money

It sounds obvious, but if you don’t actually ask for your cash, most people won’t repay you. Maybe they genuinely forgot but the chances are they’re taking advantage of your silence or simply can’t be bothered. So remember to actually email people, text them and send invoices.

If you are sending invoices, there are a few tricks you can try to speed up payment. First: set tighter terms. There’s no need to set 30 days, you can set 15 or even 7 if you want. Try sending your invoice from software that makes it look professional and even follows up with reminders. According to some research, simply putting "thank you" on a payment request or invoice can increase your chances of getting paid by over 5%.

#2 Make it easy to pay

Whether business clients, family or friends, don’t let people use the excuse of "got no cash on me right now". Send them your bank account details, set up PayPal, even look at accepting credit cards.

There are also apps like QPay which make it easy for people to split bills and even pay someone via their mobile phone number.

#3 Use a carrot or stick

One way to incentivise people to get their wallets out is to offer them a discount if they pay early. Or be sneaky and increase your rates by five per cent, then offer a five per cent discount to those that pay on time — then you’re actually getting a bonus.

On the flip side, demand a penalty for late payers. This may not wash with your mates, but if you’re providing commercial services it’s a good clause to have in the agreement up front.

#4 Don’t let it go

Too many people rely on other people’s apathy or unwillingness to cause drama and simply don’t pay. They may figure it’s not worth your while to chase the money up formally. Try to get hold of people face to face: it’s much easier to brush someone off or ignore them over email.

In fact it can be worth your while referring debts as low as $50 to a debt collection agency. Some of them offer "no recovery, no fee" so you won’t be any more out of pocket, even if you don’t get your original money back. Beyond that your options are legal action in the small claims court, but hopefully it won’t get that far.

At the end of the day, you do have to consider whether your mate or client can actually pay. You could also be in a long line of creditors - they may have more urgent priorities such as their own bills.

But if they're completely broke or bankrupt, you may have to cut your losses and chalk it up to experience: being more careful whom you lend to next time. As they say, the best way to lose a friend is to lend them fifty bucks.


    With Christmas just around the corner, it's a good idea to start chasing down that money that is owed before everybody goes off on their holidays. 

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