How to Avoid Getting Stiffed on Payment by Freelance Clients

Post Pic

According to the Freelancers Union, at least 44% of freelancers have reported issues with getting paid by their clients for completed work. Of these stiffed freelancers, the average owed to them by deadbeat clients was $10,000.

The reasons why freelancers don’t get paid on time, or sometimes at all, are several. In some cases, clients and businesses operate on very long billing cycles (up to 90 days) and feel no need to rush along their accounts payable department.

In some cases, clients know that freelancers are probably not going to take them to court over a few hundred or even thousand bucks, so why bother paying?

Even of those clients who understand the need to pay their freelancers, there are many who silently view them as mere vendors and thus of the last most concern for busy entrepreneurs/executives.

How can you avoid getting stiffed by deadbeat clients?

1. Always have a freelance contract.

In one example case highlighted by the Freelancers Union, a freelancer hounded her client for nine months until she finally received her payment. A contract between the two parties would’ve expedited the process significantly.

You don’t need an attorney to generate freelance contracts for you- a simple contract created through an online site like Docracy provides sufficient proof in case you end up in court. The Freelancers Union provides a handy contract creator.

Within your contract, have a paragraph or two stating your protocol and fees regarding late payment. Typically, payment is viewed as late at 30 days post-invoice. Once an invoice is deemed late, you can include a clause about accompanying interest charges, for example. You can also note that court and attorneys’ fees will be charged to the client’s bill if you end up in litigation over non-payment.

At the very least, an email between you and your client that states exactly how much you are going to be paid and for what kinds of services is sufficient proof in a court of law and can be used in place of a contract. However, it’s less likely to result in compensation for all your troubles, including court filing and possible attorneys’ fees.

2. Ask for up-front or milestone payment.

When working with a new client, or even a past client that has raised red flags with you, you are within your rights to ask for at least 50% up-front payment.

If the clients balks at this request, you can arrange your contract to include milestone payments for completed work. For example, if you need to write five blog posts for a client, you could arrange for payment after submission of each separate blog post. Having milestone payments expedites payment to you and helps you avoid getting stiffed for a larger project sum.

3. Send reminder emails and invoices.

What happens once you’ve completed your project and submitted your invoice only to hear back…nothing?

First of all, don’t wait until the obligatory 30 days pass. Send your client an email or call her to find out if she deems that the project is complete. Then, confirm that she received your invoice.

If a significant amount of time has passed. inquire if you sent your invoice to the correct party. Quite often, businesses have separate accounts payable personnel who deal with all bills.

Once the 30 days are up, send a second invoice and note that this bill is now overdue. You should repeat this action at 60 and 90 days post-invoice.

Keep in mind that some businesses have long payment cycles and may not pay you for three entire months.

When sending reminder invoices, include as many individuals as possible. This is not the time to be shy about announcing that someone at company X or business Y owes you money. Preferably, you want to go up the chain of command when sending reminders- for example, including the managing editor (or even the editor-in-chief) and the deadbeat editor on an email can really shake things up for you.

4. Recruit some third party muscle.

If it’s becoming evident that your client wants to brush off your work as a freebie, or you just don’t have the time/energy to be making endless phone calls and email inquiries, there are third party resources available. For example, Just Tell Julie will contact your client and send periodic letters and emails to key contacts in an effort to settle your invoice.

You could also contact your respective collection agency and have them pursue the money owed to you. Keep in mind, though, that a collection agency is not likely to recover the entire amount; in most cases, you will recover up to 60% of what is owed.

5. Engage in public shaming.

This is intended as a last resort action, but it can lead to quick results if you’re at your whit’s end and don’t want to go to court just yet.

Social media is a powerful tool, and most businesses have a Facebook/LinkedIn page or Twitter account. While keeping your emotions at bay, you could post a message such as this one on Twitter:

@companyX Still waiting on my $2,500 fee for article X. When can I expect payment?

Although it’s a low blow, it can often work wonders and result in quick payment- or at the very least, some kind of response.

6. Go to court.

While not the most pleasant scenario, you may be motivated enough by your deadbeat client to take him to court. According to the legal website Nolo, monetary amounts up to $25,000 still qualify for small claims court litigation in some states. Best of all, if you have your paperwork in order and a freelance contract that proves your client agreed to pay you, the legal process can be incredibly swift.

For a better understanding of how small claims litigation works, the Wisconsin court system provides a great flow chart that is filled with explanations and definitions of legal terms. Granted, this example is for Wisconsin specifically, but it does help you understand how a small claims procedure would generally unfold.

The Bottom Line

One of the unfortunate realities of the freelance world is deadbeat clients that don’t pay. Luckily, there are steps you can take to either avoid the situation altogether, or to compel your client to pay up.

If you’re a freelancer who got stuck with a non-paying client, how did you compel that client to pay? Please share your story in the comments below.

Leave a Reply