During the last few years people in this industry have taken huge strides to make contracts important.
Good clients will always be willing to sign a contract. If they refuse, you can bet whatever they were going to pay you they would be a nightmare to work with.
Some time ago I had an established business refuse to sign a standard contract just before the start was scheduled, asking us to “make a start and see how it goes” first. We obviously refused, and just weeks later word got out that another local firm produced some work for this company but was never paid.
Get your contract signed. Don’t work with chancers
The best thing you can do is to avoid them altogether if you don’t deal with them you won’t have any issue.
This type of client is often quite easy to spot, offering you wages less than half of the market price or simply asking for the cheapest price.
To avoid non-paying clients, it’s best to research about them after they get in touch you for a possible commission. After doing due diligence, make sure there’s a contract (that protects both you and the clients) before you start on the project.
I take 50% upfront before you start, then take the final 50% before releasing the final project. Pretty much guarantees final payment as the client needs to pay to get the work. If they don’t pay up you at least have the original 50% in the bank, so not a total loss.
Clear communication in written form is the best way to avoid dealing with these situations. Having a signed contract outlining the terms means everyone is on the same page from the beginning. Also, requiring a deposit upfront is essential.
I ask clients to pay upfront once the final product is delivered. They have a 30 days maximum delay. Usually when I see a few days before the deadline that they haven’t paid me yet, I simply send them a kindly reminder, something like “Hello if I’m not mistaken the payment time is pretty close and I have not gotten any bank transfer or cheque from you yet. I’m sure this is a misunderstanding, so don’t hesitate to contact me if you need any help”.
I usually try to explain to them that if they have some kind of problems for paying, we can work on a schedule to split the invoice in smaller parts. Most of the time, it’s indeed just a misunderstanding, the accountant was on holiday and had so much work when he came back that he missed my invoice or the client was waiting for his end-client to pay him so that he can pay me.
After sending kind reminders most clients do pay. You could remind them that they need a transfer of ownership contract to be legally allowed to use the work.
Best Advice. Have a solid contract. In many cases, honest communication helps in those kind of situations
Ensuring you have the payment schedule is clearly communicated up-front in a contract. What both parties should expect and when and ensure you’re not leaving it all to the end.
Better to get paid at certain milestones along the way, which would include an up-front payment before getting started.
The best way to avoid situations in where clients are non-paying is to really evaluate them before signing up for the project. When I look back on challenges we’ve had related to collecting from clients in the past, almost every single one of them had red flags that I ignored. Those red flags might be: a shaky business model; low sales figures; general sketchiness; unwillingness to talk about payment terms up front; and more. And almost all of those red-flag-clients are ones we let in in times of desperation – times when the pipeline was empty, or there wasn’t a lot of work on the horizon. That’s when it’s the hardest to turn away work of any kind, but if we’re not going to get paid for it, it’s not worth it, right?
When we do get in those situations – where clients are extremely slow to pay – I basically start by kindly asking when we can expect payment. As time passes, I email them more & more frequently, and get more and more stern/short in my inquiries. There’s been instances where I’ve set up Harvest to automatically email client the same overdue invoice on a daily basis. At a certain point – usually 45 to 60 days late – I’ll start picking up the phone, offering to come pick up the cheque in person, and so on.
I turn into a giant, unavoidable pain-in-the-ass. And I do it without regret. We’ve held up our end of the bargain, and we deserve to get paid in a reasonable timeline. I’ve never really had to pull the contract card or threaten legal action, thankfully.
I’ve had plenty experience in not being paid on time in the past!
In the past I used to have issues with lots of clients not only not paying me, but spending up to 9 months gathering content for their site after I’ve finished building it, and holding off payment until they have finally got their act in gear.
For this reason I now use a contract and split my payments into 50-25-25. This way if for some reason, the last payment get delayed, it doesn’t hurt my pocket. I include ‘hold fees’ and ‘late fees’ into my contract which allows me to charge the client extra if they delay feedback, content or payment itself. I never enforce these, but once the client knows it’s in there, they tend to be a lot more responsive.
I was lucky enough so far to have to deal with a non-paying client only once years ago. After a couple attempts to remind them in a regular, friendly way I had to tell them that I’m going to send this to my lawyer next. Fortunately this must have been intimidating enough for them to pay a couple days later.
I trust my gut with new clients and if it doesn’t seem to fit I decline projects before even getting started. That’s of course not a guarantee, but it’s working quite well for me. Learning to say no is hard but crucial.
When I first started freelancing, trying to build my portfolio, I feel like I took on any client I could get, and it was horrible. I didn’t know how to handle non-paying clients who missed deadlines, but it was a true and necessary learning experience. After about a year and a half of doing so and some less-than-fun experiences I learned my rights as a freelance contractor and set myself up for success. From that moment on, I did two key things that changed the way I went through my freelance career:
Ensured my contract covered all of the fine details in a business-friendly manner—including what’s expected of me, them (the client), and how late payments are handled. Clients knew this would be a great experience and that I was easy going, but should late payments extend further than expected, they’d receive a warning, followed by a legal document from a lawyer. There are two things most companies dislike—lawsuits and bad press going viral.
I became really picky about who I took on. This may be a bit difficult when you’re first starting out, but I eventually only picked up clients I was comfortable working with—from the individuals down to the projects that really jived with me.
From there on out, my projects and client experiences were smooth sailing—for me and them.”
Try to get reputable clients that are trustworthy and professional, those types are least likely to flake on you, but if a client is willing to put their money where their mouth is then they are more likely to stick with the project and send you the rest when its completed. If they don’t agree to a deposit, RUN.
I send invoices that indicate clearly when the billing date and due dates are. I also include footnotes that indicate what would happen if they pay late (10% late fee, etc). I also send reminder emails every week if the client is more than 15 business days late.
One strategy for avoiding non-payment is to make serious efforts to prevent the situation from happening in the first place. Finding out about the company or individual you’re thinking about working with is a simple first step. Is their company reputable? How well-established are they in their industry? This isn’t bullet-proof of course, but it could significantly lower the chances of non-payment. When your gut tells you something’s off even before the project has kickstarted, then you should probably step back a bit and reconsider if the project’s really a good fit.