Last Updated on October 11, 2018
You just hustled to complete a project be the deadline that you’re given. You’re proud of the work and promptly send-out the invoice for your much-deserved compensation. As each day passes, you get more restless, irritated, stressed, and defeated. It’s probably one of the worst experiences that a freelancer can experience.
Instead of letting that happen in the first place, put matters in your hands by take the following nine steps in preventing clients from stiffing you.
1. Investigate Your Client(s)
Thanks to the wonderful world of search engines, you can do a search query on your perspective clients without having to hire a PI – not that any of us would go to that extreme. If you spot any red flags, like if the client doesn’t have a website or any social media accounts – then it’s probably in your best interest not to get involved with them.
Besides verifying that they’re an actual person or organization, see if any other freelancers have left them reviews, that they have contact information, and if they’ve have ever been featured in any legit publications.
2. Never Work For Free
I know when you’re starting out as a freelancer that you want to get your name out there. And, sometimes that involves giving a client a free sample of your work.
Let me see this one time, and one time only, never work for a client for free.
If they request a free smale, then provide them a link to a piece of work that you’ve already done or point them in the direction of your website that contains a portfolio. Legit clients appreciate the hard work that freelancers do and would never take advantage of you like this.
3. Get Everything in Writing
Once you’re certain that the client is on the up-and-up, both of you should agree to the following prior to the start of a project; scope of work, milestones, deadlines, revisions, your rates rates, accepted forms of payment, and when payments are due.
After these terms have been agreed-on, have them put in writing so that there aren’t any misunderstandings when it’s time to bill the client. It also may come in useful if you have to settle any nonpayment issues in court.
4. Require a Deposit
If a client argues about paying you upfront is probably someone you don’t want to do business with since that’s a pretty good indication that they won’t pay even after you’ve complete your work. It’s not uncommon for freelancer to require 50% upfront and 50% at the end of project. You could also ask for 1/3, 1/3, ?.
How much you require upfront depends on your specific industry and how you’ve set-up your rates, such as by the hour or project.
5. Use Invoicing Software
What’s not to love about invoicing software? For starters, you can send out a professional looking invoice and get paid in just a matter of minutes. That’s one of the best ways to ensure that you always have a positive cash flow.
Secondly, you can easily track the invoices that are pending and have been paid, as well as establish recurring payments and send-out automatic reminders when a payment is approaching. Depending on the software that you select, there are also features like adding your brand’s logo and time tracking to keep tabs on the hours that you spent on a project.
6. Itemize Your Invoices
As a writer, you wouldn’t send an invoice to your client simply saying “20 Blog Articles.” you would want to create an invoice that listed each article you have written in the billing period, the date that the article was completed, and how long the article took your to write.
Itemizing your invoices prevents the client from questioning the work that you should be compensated for so that you can be paid promptly.
7. Establish Incentives and Penalties
Some clients sometimes need a little nudge to pay your invoice. One technique would be to incentive your clients by offering discounts if they pay the invoice ahead of the due date, such as 2% off the invoice if paid within 10 days.
If incentives don’t work, then don’t hesitate to tack-on late fees. Some freelancers, for example, charge 1.5% of interest per month after the payment due date. You can keep re-submitting the bill with the late fee attached.
Don’t passively sit back and wait for the client to pay your invoice after the due date has come and gone. Follow-up with the client by sending them a friendly email reminding them that the invoice is either approaching or past due. If that doesn’t work you should pick-up the phone and give them a call. Believe it or not, people aren’t as evasive if their phone is ringing.
If you’re able to the client on the phone, find out why the bill hasn’t been paid. Maybe they’re having financial problems or it just slipped their minds. Regardless of the situation, ask the client when you can expect some sort of payment.
9. Have a Plan For When All Else Fails
What happens when the client still hasn’t paid their bill?
You could hire a lawyer to compose a not-so-friendly letter demanding payment. Other options including hiring a collections agency, taking the client to smalls claim court, or publicly calling them out on social media by simply asking where your payment is.
If you want to avoid getting stiffed on a payment, make sure that you take steps listed above. Sometimes, unfortunately, that may not be enough to secure a payment and you may just have to cut your loses. However, it’s better to have a plan-of-action to prevent getting stiffed in the first place then just waiting for the worst case scenario.
What tricks have you used to ensure that clients pay your invoices? For more tips on how you can be a better freelancer, check out this epic guide to freelancing!