This post is part of Business Mechanics — structured strategy and operational insight for serious small business builders. Read more about Business Mechanics HERE >>>
I close about one client account every single month. Not a lot, not catastrophic, not business ending, but consistent. Consistent enough that I have a process for it. Consistent enough that I don’t really get emotional about it anymore. Consistent enough that I can usually predict exactly how it’s going to play out before it actually does.
And it almost never starts with some dramatic blow up. It starts with silence.
I think this is where people misunderstand the situation, so let me be very clear about this upfront. I am actually very easy to work with when it comes to payments. I am not rigid. I am not sitting here waiting to slap you with late fees the second your invoice is one day overdue. If you tell me ahead of time that you get paid on a certain day and you will take care of the invoice then, that is completely fine. If you communicate with me before I have to come chasing you, I will almost always work with you. I waive late fees all the time. I give grace all the time. I understand that cash flow in small business is not always predictable because I live in that world too.
But there is a very real difference between having timing issues with cash flow and pretending the bill does not exist. There is a very real difference between communicating like an adult and ghosting like this is optional. That difference is exactly where accounts start heading toward closure.
Around the 10th of the month, if your invoice has not been paid, you are going to get a message from me. It is not aggressive. It is not emotional. It is simply a notice that your account is past due and that a late fee may apply per your agreement. From there, I retry your card on file multiple times throughout the month. I send follow up emails. I text. Sometimes I call. Payments hit randomly sometimes. Cards fail and then suddenly work later in the month. ACH payments can clear late. Money moves around. If your card goes through at any point, great. We move on and I do not think twice about it.
But if your card does not work, you are not responding, and the balance just sits there, I am no longer managing a payment. I am managing you. And that is where the problem starts.
Most of the accounts I end up closing are not large office clients. They are virtual clients. Mailing address plans that range from $39 to $89 per month. On paper, those accounts sound simple. Low cost, low effort, easy to maintain. In reality, they can become some of the most time consuming accounts if someone is not paying. I am manually applying late fees. I am sending multiple follow ups. I am checking accounts repeatedly. I am keeping track of who has responded and who has not.
At some point, I have to step back and ask a very simple question. Why am I spending this much time chasing $89? My time is worth more than $89. If I am sending you five emails a month, manually managing your account, and getting no response, you are no longer a client. You are a drain.
The most recent account I closed was not a one time situation. It was seven months of the exact same pattern. Seven months of never paying on time, always having a past due balance, always saying you will take care of it, and then not taking care of it. We emailed, we texted, we followed up. Every single month, it was the same cycle.
At some point, this stops being a misunderstanding and becomes a pattern. And I do not run a business that accommodates that kind of pattern. So I gave him 30 days. Not as a punishment, but as a boundary. And when nothing changed, I closed the account.
Closing an account is not dramatic. It is administrative. I send a closure email. I archive the account so it can no longer be accessed. I revoke access to the online portal. I restrict login. I remove open invoices as bad debt and write them off. I flag the account internally so other locations are aware not to re engage. That is it. No collections, no legal threats, no theatrics.
The honest truth is that if you cannot pay a $39 to $89 monthly bill, there is nothing to collect. It is on me as a business owner to make sure that balance does not turn into hundreds of dollars. So I do not let it. I stop it early and we move on.
What was actually comical about this situation was the response I received after the account had already been closed. After months of follow ups, after the final email clearly stating that we would not be offering further services, he responded with, “Oh my God, it is not that serious. I have never had an account closed for being delinquent for such a short time.”
That told me everything I needed to know. This was not a one off situation. This is how he operates. He is late everywhere. He does not prioritize paying vendors. He assumes that eventually, people will just keep working with him anyway.
Real businesses do not operate like that. Real businesses pay their bills and communicate when they cannot. Real businesses respect other people’s time and understand that services are not optional. I take paying my mortgage seriously. I take paying my vendors seriously. I take my time seriously. These are real obligations, not suggestions.
In reality, if you are not paying your bills, it is usually not because of some complicated situation. It is usually because you do not have the money. And if you do not have the money, then you do not have a business yet. You have an idea. You have a hobby. You have something you are testing out. And that is completely fine. But what is not fine is expecting real businesses to carry that for you.
Realize that when you are approaching real businesses with your side hustle energy, do not be surprised if they do not want to work with you. Real businesses need to be treated seriously and with appreciation for other people’s time. Just because your business is a hobby to you does not mean my business is a hobby to me.
I do not close accounts because I am angry. I close accounts because I am not going to spend my time chasing people who have already shown me how they operate. I do not have the bandwidth for that. I do not have the interest in that. And I certainly do not have the obligation to continue that relationship.
The standard is not that high. You do not need to be perfect. You do not need flawless cash flow. You do not need to never be late. You just need to communicate, follow through, and respect that there is another business on the other side of your invoice.
That's it. That is the bar.
And if that bar feels high, then you are not ready for paid services yet.
You can say it is not that serious. You can think it is just $39. You can assume people will keep working with you anyway. But on this side of the table, it is time, effort, and attention and those are the most expensive things I have.
So no, I am not going to keep giving them to someone who has shown me, month after month, that they do not value them.
We close the account.
And we move on.