As is the case with just about everything I write, my advice today needs to be filtered through your own experiences, how comfortable you are dealing with client problems, and your specific needs when it comes to being paid on time. What works for me might not work for you and your situation.
One of my goals for this blog is to give you something to think about if you haven’t experienced certain aspects of freelancing yet. Or to give you a different spin on something that you previously thought about in another way.
Today’s topic fits into that mission.
It doesn’t take long as a freelancer to run into some sort of payment issue with a client. Sometimes the client is being dishonest, but more often than not I’ve found that these issues occurred because of circumstances the client never intended to be in. Unfortunately, that can still be a problem for you.
I’m really only interested in “late-paying” here… “non-paying” is a more serious matter and an entirely different topic. (And, frankly, one that’s probably better to discuss with a lawyer.)
And to fine-tune it further, let’s say “chronic late-paying.” Every client is going to have issues from time to time where payment is late. Try to give them some slack because chances are you’re going to need some slack at some point when a project ends up a little late or you make a mistake that causes the client a little pain.
We all make mistakes and we all have bad days. You want to look at the big picture with the client. Solid clients are worth keeping and they’re worth the benefit of the doubt when problems creep up from time to time.
However, when those problems seem to be the norm and not the exception…
1. Discuss the problem
I always like to assume the best. As I mentioned, this problem could be occurring because of things the client can’t control. But it’s still worthwhile to explain your position.
Sometimes, I’ll address the issue like this: “I’ve noticed that recent payments are coming later than expected. I know you’re slammed on your end, but is there anything I can do to help make the process a little easier for both of us? Like you, I’ve got financial obligations on my end and once I get the final project into your hands, I’d like to clear the account so we can move on to the next project and keep things rolling efficiently.”
OK… you come up with something similar in your own words. My point here is to keep things positive and try to be helpful. And I’m hoping you actually have payment terms outlined in your client agreement or at least on your invoice. That prevents the client from saying, “Oh… I didn’t know I had to get payment to you by _________.”
2. Charge a late fee
I know late fees are common, but I hate them and never do it. It’s probably just me, but my feeling is that if the client doesn’t respect your “payment due” date on a regular basis, how likely are they to respect the late fee? And if you’re having to charge the late fee on a regular basis, maybe you don’t want them as a client.
I’m not convinced a late fee is worth the stress of having to confront the client over it and waste more of your time to collect. Again, that’s just me.
3. Require full-payment upfront
I’ve had clients who started out as “prompt payers”, then started getting a bit lazy. For some, I had not been requiring a partial payment up-front, so late-payment on top of that wasn’t sitting well with me. I was feeling a bit taken-advantage of after being the nice guy and not requiring the partial up-front payment. (This issue of not requiring a partial up-front payment is something I’ll tackle on its own another time.)
If ideas #1 and #2 don’t work for you, consider requiring full payment up-front. The risk? Losing the client.
But I didn’t care if I lost the client. You might not be in that position, so take this step after considering the worst-case scenario.
Believe it or not, some clients don’t mind paying up-front. They know they have a habit of not doing things on time and feel bad about it. So not starting their project until you get paid is something they can understand.
4. Fire the client
Despite your best efforts to solve the problem and give the client all the help you can, nothing changes… payments are going to be late. There are two things you can do and the first is to simply part company with the client.
You don’t have to be mean about it. When the next project comes in, say, “I’m sorry, but I’m not going to be able to work on your projects any longer. Like you and your business, I need to be paid promptly for my services and that hasn’t been happening. I enjoy working with you on your projects, but I need to put my time into projects where I’m being paid promptly.”
Hopefully, the client snaps out of it and starts paying you on time. In the worst-case scenario, you get cussed out and the client tells everyone he knows that you’re a dishonest business person. Hey, it’s rare, but it happens.
What might happen, instead, is that the client is ticked off, but moves on to some other unsuspecting freelancer and treats him/her the same way. But at least he’s out of your life.
5. Choose not to worry about it
This is the other side of the coin to idea #4.
There are some clients who will never be on time or prompt about anything. Why they are that way is a mystery. But I have had clients who see the “payment due” date on the invoice as unintelligible black ink and pay you when they get to it… usually about a month after you were expecting it.
These people are often solo operations where they’re doing everything that should probably be done by a team of people. It’s not that he wants to cause you stress, it’s just the world he’s in day in and day out.
If you eventually get paid for your projects, you enjoy the work, and the slow payment isn’t causing you financial stress, you might simply decide not to worry about it as long as the check eventually gets to you.
To be honest, I can’t say I recommend that. You deserve to be treated with respect and prompt payment is part of that. But it’s a valid way to deal with the problem. If you’re the non-confrontational type, this is something that probably appeals to you.
We could brainstorm and come up with more than five methods for dealing with this issue. But this is enough for now.
The main thing I don’t want you to do is to get stressed when this happens. It’s really easy to run it over and over in your mind, getting more and more worked up, but not taking any concrete, thoughtful steps to solve the problem. This is especially true with beginning freelancers who are hesitant to rock the boat and potentially lose a client.
But if you let clients take advantage of you, you suddenly find yourself with a calendar full of clients like that. It’s just not worth the aggravation. Coming to some sort of final resolution, whatever it might be, allows you to move on and focus on building a successful career with high-quality clients.
