Many freelancers struggle to collect money that is owed to them. I shudder each time I read about a freelancer who can’t collect the thousands of dollars owed to them. I hate to hear about that happening.
I’ve been fortunate. In over 15 years of freelancing, there’s only been one time I couldn’t collect payment. That one time was from a long-time client that declared bankruptcy. The amount owed me was several hundred dollars.
In this post, I’ll discuss the tricky and important topic of getting clients to pay. There’s no method that is 100% effective at making delinquent clients pay your invoices. But there are some effective steps that I’ve adopted over the years to reduce nonpaying clients. I’ll share four of those steps in this post. I’ll also share an alternate way to get paid that reduces some of the worry.
This post is part of my series on What Is the Worst Problem Freelance Writers Face?
The sad truth is that if you’re already struggling with nonpayment, it may already be too late to fix. The best strategy to get clients to pay is an offensive strategy.
If you can avoid working with the type of client who tends to not pay you’re already ahead.
Step #1: Be Picky When Choosing Clients
For me, this is the most important step. You may think your client chooses you, and to some extent that’s true. But, as a freelancer, you also choose your client.
Before agreeing to work for a client, I always learn everything I can about their business. This serves two purposes:
- It helps me do a better a job for the client.
- It also helps me weed out disreputable clients before I agree to work for them.
Feedback from other freelancers is also important. Here is what else to look for:
- Number of years in business. A longer business history often means a more stable company.
- Size of company. Is the company large enough to afford your fees?
- Client testimonials. A lack of these could be a red flag. A company that treats customers badly may also treat a contractor badly.
- History with freelancers. Some companies have a reputation (good or bad) for working with freelancers. Pay attention to the chatter.
Find what you need to know from:
- Their company website
- Better Business Bureau
- GlassDoor (Companies that treat employees poorly often don’t treat contractors well)
Once you’ve gotten information, you’re not done. You also need to pay attention to how the client interacts with you. Do they seem overly aggressive? Confused? Desperate?
Communication problems in the initial stages of a project could be an early warning that this will not be a good client. Things probably won’t get better as the project continues. It may be a good idea to suggest they work with someone else.
Step #2: Always Use a Detailed Contract
Another important step to getting paid is to use a contract.
While a contract doesn’t guarantee that you’ll get paid, it does give you something to fall back upon if there are problems. Freelancers have asked me for advice on collecting payment. When I ask what the contract says about payment, the freelancer responds, “what contract?” Don’t be that guy.
As a freelance writer, you should have a standard contract that you can change slightly and use over and over. Once you’ve created a draft, have an attorney look at it. If the client provides you with a contract to sign, read it carefully before you sign it. If you have any questions, ask the client. If you still don’t understand, ask your attorney.
A basic contract should include at least:
- A detailed scope of work
- Payment terms (when and how you will be paid)
I use QuoteRoller to create proposals that become contracts when they are signed. Learn more by reading my review of QuoteRoller.
Step #3: Charge a Partial Fee Upfront
Another way to weed out nonpaying clients is to charge a partial fee before you start work. I’ve found that clients who don’t plan on paying for your services often resist partial advance payments.
On the flip side, in my experience those clients who are willing to make a partial advance payment seem to be more professional in their behavior and are more organized. Who doesn’t want more professional clients who are well-organized?
For a long time, I was timid about charging advance fees. That was before I realized it was the professional thing to do. That’s right, many other professions charge you at least a partial payment before they start work. You should treat yourself at least as well as those in other professions.
Here’s a partial list of professionals who often charge fees in advance:
- General contractor (for remodeling). When we made some upgrades to our home I learned that the contractor needed a partial payment before he would start. That was despite the fact that in our area contractors can place a lien on your property if you don’t pay for their services.
- Landlords. If you’ve ever rented a property, you know that most landlords require a deposit before you can move into a property. They also often require payment of the first and last month’s rent.
- Attorneys. Once in a while, you will find an attorney that will provide a single free consultation to provide you with an estimate, but many ask for a retainer to start working on your case.
These are just a few examples that I can think of. Other professionals take payment immediately after you receive their services. Examples include auto mechanics, restaurants, doctor’s offices, and more.
Note: This section is based on my personal experience. I am not an attorney and this post is not legal advice. Laws vary from place to place. Always consult your own attorney to determine the law in your area.
As a freelance writer, you’re a professional too. Establish a policy of requiring a partial payment before you begin work.
Step #4: Invoice Quickly and Repeat
The ideal time to invoice a client for a remaining balance is immediately after you complete the work. This is true even if your contract gives the client a time frame in which to pay.
One reason that billing quickly is important is because your work is fresh in your client’s mind. If you wait and it is a large company, there may be some confusion about what the bill is for. There may also be some confusion as to whether the bill has already been paid.
The one exception to this guideline is clients with a regular billing cycle. Businesses who hire a lot of freelancers may have a regular established billing cycle. For example, they may need all invoices to be turned in by the end of the month so that they can pay all invoices on the fifth of each month. In these instances, read the billing policy and follow it to the letter.
When should you send a reminder notice for a late payment? Send out reminders as soon as a payment becomes late. If a client has two weeks to pay your invoice, remind the client their payment is late at two weeks and one day. Often the first reminder is all that is needed.
My reminders start out gentle, but I use stronger wording in later reminders if the payment continues to be late. Hiring an attorney to help with collections is a last resort for getting nonpaying clients to pay.
Tip: Work through a Third Party
One way to reduce your chances of nonpayment is to let a third party handle billing and collection issues. Many freelancers choose to work through an agency or online marketplace such as Envato Studio. By doing so, they transfer the risk of nonpayment to the third party. (Note: I have done some work for Envato Studio and the Envato network. The link here is not an affiliate link.)
The key to working through a third party is to make sure the third party is reliable and trustworthy. Here are some things to consider if you are thinking about working through a third party:
- Reputation. Has the third party hired freelancers before? If so, what do those freelancers think about working for the third party? Are they happy?
- Rate. Is the third party willing to pay a professional rate for your services? If not, walk away. A good agency should be willing to pay at least a basic professional rate.
- Contract. Most third parties have their own contract for you to sign. Review it carefully. It is likely to favor them and not you.
- Terms. Understand the payment terms. Pay attention to any clauses that might result in you not being paid for your work.
Do you have problems getting paid? If so, how do you deal with those problems? Share your thoughts in the comments.