Working as a freelancer offers a lot of freedom and flexibility, but it comes with its share of hardships. You might get to go to work in your pajamas, but unlike your friends working for corporations, you have to hunt down every paycheck you earn. The worst part? Some clients may be late paying you, or they may not pay you at all.
Talk About Payment First
When a client wants to hire you for freelance work, one of the first things you need to talk about with that client is payment. You should discuss payment while you’re discussing the scope of the client’s project, because the two things are directly related. Let the client know how much each aspect of the project will cost, and how much the cost will be if the project grows larger.
Have the client sign a contract detailing the terms of the project, the payment expected, and the payment dates. Many bloggers or creatives ask for some amount of money up front. If you’re new and don’t have much of a portfolio, you may not feel comfortable asking for money before you’ve provided work. In this case, complete part of the project, and then send an invoice for that percentage of the price. That means if the client turns out to be hard to collect payment from, you haven’t devoted a week’s worth of effort on work you won’t be paid for.
Create an Upfront Invoicing Policy
Every freelance blogger needs to create clear, direct invoices. Many things need to show up on your invoice, some of which you may not currently be including. These are:
- Your logo
- Your address and contact information
- The invoice due date
- The time frame in which late fees start accruing
- The work that has been completed
- How you receive payment
You can develop a template with some of this information on it, either via a payment site like PayPal or by making your own. Being specific with how much each part of a project costs is helpful, too. If you spell this out for the client at the start of the project and then show them on the invoice, they’re less likely to quibble with you over costs.
Charge Late Fees
You’re a small business, and chances are it’s very inconvenient when you don’t get paid on time. So, charge late fees, and don’t feel bad about it. Plenty of businesses charge late fees. As long as you let clients know off the bat what your late fees are and how long you wait before you start charging, you’ve got nothing to lose. Plus, this lets clients know you’re serious about getting payment on time and that they shouldn’t try to take advantage of you.
Stop Doing the Work
Have you ever stopped paying your utility bills? The utility companies eventually cut off your services. If a client hasn’t paid you, and you still have outstanding work to send, don’t send it. Don’t do any more work for that client. If the lack of payment puts you in a bind, you can always look into payment options like factoring, which at least gets some of that money into your hands.
Send the client a firm message that you will cease working on projects until you receive payment for the work already completed. That way, at least you don’t waste additional time on an account that’s never going to pay you.
Send Invoices in a Timely Manner
Some businesses send out invoices on a certain day of the month, or every two weeks. This is a mistake for several reasons. First, you deprive yourself of payment for days before even sending out the invoice. Second, it gives the client time to forget about paying you between when you deliver the project and when you send the invoice. Third, if you’re only invoicing for part of a project, you’ll probably start the next piece before invoicing for the completed portion. So, send invoices within 24 hours of project completion, while it’s fresh in both your and the client’s mind.
Send Reminders Before and After Invoicing
Friendly reminders help you get paid faster without annoying clients too much. If a client hasn’t paid within a week, it might be because he or she handles bills on a certain day, or something similar. A reminder will put your bill back to the forefront of their thoughts, especially if late fees are on the horizon. By the way, keep sending those reminders. One might not cut it. Increase the frequency if the payment continues to be late.
Before you send a new invoice containing late fees, notify the client that he or she has 24 or 48 hours to pay the current invoice without the late fees. If this is someone’s first time with a late payment, be kind in your reminder. Assume the person isn’t intentionally forgetting to pay you.
Some freelancers who do ongoing work for clients send reminders before invoices show up. That gives clients time to get payments together or to put invoices on their payment calendars. This tactic doesn’t work with every client or every type of client, but it can be helpful if you’re dealing with someone on a long-term basis.
Set Credit Limits
Credit cards don’t enable just anyone to charge unlimited amounts of money. You have to build up to that spot, and many people never get past a very low credit limit. Adapt that strategy to your payment policy. When taking on new clients, let them know that you only do a certain amount of work before you ask for payment. This is their “credit” with you. The longer someone works with you, the more credit you can allow them to build up.
It’s tempting to get angry with clients who don’t pay, but remember that you must stay professional. Yelling at someone isn’t going to make him or her pay you any faster, no matter how satisfying. Keep sending those reminders, and keep a list of the clients who pay on time every time so you can work with them more in the future.