From what I see you need the customers, but paying customers, we can all do without those who delay payments for months if not years. I've now come up with a new procedure of the cut-off point.
I would only add that, if termination is inevitable, be sure to do it in a polite and professional way - and one that leaves the door open for a possible re-engagement in the future. If the client had a change of staff, for example, that might be an opportunity to start afresh, so don't burn all your bridges too soon.
Basically 30-days from invoicing their account will be in suspension. 15-days after this their account will be terminated with an option to return.In other words they would have 45-days to pay their dues. Only upon arrangement can this be bent a little. I must stress I have one client who never answers his phone or emails, so how would you communicate to a person like this? In either case his account is now suspended and pending termination.
Clients can return, but they must pay for my time to re-instate their account and re-install everything back on the server as they've been terminated.
I now make my money from the hosting, domain, support and management. This is covered in the monthly retainer. For the moment this is around 15 GBP. per month. If a client does not pay this, then they must leave, and this is how I see things. I really can't carry dead weight any more.
Initially I did, but now it's passed. After looking back at it I really don't think I made a bad decision. If the clients play tune to my music it's worth working. If the clients don't play tune and delay payments months on end, then there is no two-ways about it. I can't make money and survive, and they aren't helping me run my business, so they really must go.
Apart from all what was said above. I personally find that non-paying clients drag your business down. You somehow feel demotivated to work as everything is working against you. Why on earth would somebody want to keep somebody like this on? It's when we don't know what to do with those clients that we have an issue. This is why knowing a procedure for problem clients is the best way to go.
So when do you know when to cut them off?