Maintaining a steady cash flow while going from gig to gig is challenging enough, but having to deal with clients who don’t pay up on time, or worse, at all, makes this doubly difficult.
Following up payments is notoriously difficult for us freelancers. Back when I was still writing for a local blog, I had to wait four months before collecting my salary. It was bad enough that we were practically getting paid next to nothing, but the person in charge of our compensation seemed to shun modern conveniences like direct deposits and electronic bank transfers, so us writers would have to trek on over to some out-of-the-way office to pick up our measly paychecks.
Four months was simply the happy medium for accumulating a not-so-depressing amount and ensuring that the earliest check issued didn’t go stale. Yeesh.
If you're already in this situation, check out this video for best practices for collection when your clients aren't paying.
Informative, right? But why go through all that trouble when you can ensure that you’ll get compensated for your labors from the very beginning? Here’s how:
Before you even apply for a gig, sniff around for reviews on the client. There are plenty of freelancer fora online that could help you find feedback on potential customers, so be sure to make use of these.
You can also try asking around, assuming you also have friends and colleagues in the remote work industry. If you find reviews or testimonials vouching for a potential customers’ compensatory behavior, then by all means, go right for it. Otherwise, steer clear of the project lest you get nothing more than a shout-out for your efforts.
The rules might be a bit more relaxed in the freelancing world, but it’s always advisable to have things in writing. Whether the client is a corporate entity who found you online or a personal friend who has commissioned you for a special project, they should understand that your work is your business and should thus be taken seriously.
Your contract should outline your role in the project, its duration, the output that is expected of you and any standards it might be held up to, crucial timelines, and of course, the terms of your compensation, which brings us to…..
Cover all your bases from the very beginning so that you’re protected in case the client turns out to be a dud. Generally, it would be wise to ask for a certain percentage up front, half of the remaining balance midway through the project, and the rest to be rendered prior to completion.
Some freelancers also include late fees in their compensation contracts, which make sense since having to pay an additional percentage on top of the agreed-upon charges can get even the most tightfisted customers to open up their check books.
Be open to bargaining, but be firm about your floor rates and when they should be paid, regardless of whether you know your client personally or not.
Assuming you’ve made your own invoice template by now, it would be best to send an updated invoice at least 24 hours before the next payment is due. Send it via email or even through snail mail if possible, and call/message your client to let them know it’s en route for good measure.
Sometimes, there’s nothing like a written reminder to eliminate the possibility of your paycheck slipping through the cracks.
Having a direct line to whoever handles the company payroll can pay off in the long run. Repeatedly pestering your primary work contact for payment might not leave the best impression (even if they do deserve it), so having someone from accounting try to handle things first can remove the need for any further escalation.
If the invoice date has come and gone and you have yet to hear from your client about the payment for such, don’t be afraid to send a reminder by email. Keep the tone friendly, but firm. The goal is not to antagonize the customer, but to come up with a solution to the issue at hand in the quickest way possible.
In some cases, delays might be caused by technical difficulties from your client’s end. They might still be using some rather prehistoric methods (as mentioned in my introductory paragraph, for instance), their banks might be undergoing technical difficulties, and so on.
You can be proactive by suggesting effective and efficient forms of payment, such as PayStaff. Our platform ensures that you and your remote colleagues receive your compensation on time, all without your client or employer having to pay additional processing fees. *wink*wink*
Now, let’s say you did all that and your client is still stalling. There are about three things you can do to move things along:
What happens when you keep neglecting to pay your electric bill on time? The company cuts off your power, right?
You can do the same with delinquent clients. Let’s say you’ve already agreed that your client should have rendered down payment by a certain date, and the day passes without a peep from them. Reach out and see if there has been any problems from their end. Should they be encountering any unforeseen difficulties that they have no control over, you both can work out an alternative payment schedule.
On the other hand, should they prove uncooperative or persistent in delaying their payments, get them moving by informing them that you won’t be forwarding any output until the pending payables have been settled.
This is basically a not-so-subtle way of reminding a wayward client that you can sue them for breach of contract if they persist. Most of the time, it’s enough to force them to cough up the payment.
If this proves insufficient, there’s the third and final option.
This is the venue for resolving disputes over relatively small amounts of money. Taking a client to the small claims court doesn’t really cost much, but do provide overestimates at the beginning to ascertain if whatever they owe you is worth the extra effort and expense that this method would entail.
Getting paid for your talents, time, and efforts should be a given, and for many office-based workers, that is the case. It might be a whole different reality for those of us who freelance and/or work from home, but that doesn’t mean we can’t try to change that.
Who knows? If enough of us start to really compel our clients to be more prompt and professional in settling their payables, perhaps we can even start to reverse the ridiculous notion that compensating your freelancers shouldn’t be a priority.