What Do You Do When Your Client Won’t Pay?

“punch him if I ever see him in the street!” — lol, hilarious! Did s/he literally say that!?

In my own experience, I work with some long-term clients, but none of them actually “refused” to pay. Some delayed payments, yeah, but thankfully, nothing too bad (yet!).

Interesting stories, Collis! And Cyan’s “billed for time not their perception” is very well said!

The first story seems dead on to a few clients I’ve had in the past. I’m glad (well, not glad, but relieved) that I’m not the only one who goes through this.

I had (have rather) a client who detailed exactly how many pixels each line of text should be spaced apart – different for bullet points and other ’special cases’. It was daunting at first, but with a little bit of care they turned out to be fairly good to deal with.

Another one started getting abusive so we had to end the relationship. One of the best decisions I’ve ever made.

Good luck avoiding any more like them

I had a client that didn’t pay me £700, despite persist reminders. Then, when his site had a bug a year later, he rings me up demanding that I fix it. Sorry buddy, it doesn’t work like that.

Get your clients to pay in installments after stages of work, that way you will always get paid something and if they don’t pay up at a certain stage, don’t do any more work on the project … simple really. but yeah, clients don’t like paying up!

A friend of mine relates a situation where after much hassle and many attempts, he finally went to the local police department and swore out a statement for the man’s arrest. Then he and the sheriff went down to the man’s place of business and, guess what, they wrote him a check right there and then.

Sadly, this doesn’t help as much if you’re not physically near your client, but maybe you can figure out a way.

Frankly, unless you’ve signed a non-disclosure, I think blogging about the company that isn’t paying (carefully! No libel!) might work out.

I had a client with a friend of mine who didn’t want to pay us. The project was huge (a video game) and we were working for the agency who was dealing with the client. The project died after a few months, so the client paid the agency but the agency didn’t really to pay us everything. We had to manage for months, and finally make a discount to get paid. A few weeks later, the agency came and ask us to work for them. Sorry guys.

A friend of mine had to go to a non-paying client physically after months and months of non-payement. He came in their office and said “ok I can’t get Mister X on the phone, so I’ll just wait for him and for my check.”. After a while he get paid. Not easy to do when you work with far away clients but a good solution sometimes.

@Paolo
They will all need something in the future. Unfortunately, some of them will rather turn to another developer then to you and this one will make more mess then fixes.

Clients never benefit for non-payments, but some of them are quite IQ-limited to know that.

I did some basic brochure design and stationary work for a client which also involved an illustration. The whole thing went well up until the point the client demanded I knock off £65 off the invoice because she could not print the brochures ( I had supplied all the relevant files at this point which I tested thoroughly. I also briefed the client on how to use them for printing, and she had told me all was fine…) and had had to pay another “designer” to knock up some temporary brochures in publisher! (for the said discounted price off the invoice).

On top of all that the invoice was more than 90 days overdue and every time I had asked her about paying she had a sob story or an excuse. I even did the whole thing for a discounted rate as she was a friend. I have no intention of working with the client again, far too stressful, and I think I lost a friend as well as she hasn’t talked to me since the check eventually cleared. Almost put me off the whole freelance thing to be honest.

I’ve noticed that the clients that are the most positive about payments, saying things like, “oh yeah you’ll get paid for sure, don’t worry about it, you’re quote was reasonable, there won’t be a problem i’ll get you a check soon” are usually the ones that go incommunicado.

I’ve only ever had one client who was a total nightmare with regards to payment. They consistently changed the spec of the project and when I refused to do additional work without additional pay they refused to make the final payment. Fortunately I’d already taken 75% of the payment through the course of the project so it was easy just to let it go.

I did go and see a solicitor because they were constantly asking for the previous payments to be refunded because I wouldn’t do the additional work (even though I’d already done all the work agreed and then some).

The solicitor basically said that the amount in dispute was so small that neither party wouldn’t be able to ask for my legal costs back if I successfully sued them and the legal costs would be higher than the amount in dispute.

After that experience I really tightened up my contract and payment terms and produce a much more detailed spec for the client and I’ve never had the same situation since.

One client owes me, $55 for an update I did 2 years ago. I still call them up once a month to remind, and they keep asking me to call ‘tomorrow’. I know, I’m not after the money, just training myself on ‘perseverance’.

Fortunately I haven’t had any issues like that (yet). I guess there has to be a first for everything though!

I have one client that I have to dun on every project. I still work with them because once I start bugging them they always come through, but payment is delayed every single time. Anyway, one time my bookkeeping got messed up. I still don’t know how it happened, but I thought they had paid me for a project and they hadn’t. Four months after the project was completed and the report turned in, I got a check from them. This is how long it would go if I didn’t start bugging them at 30 days. I learned.

I’ve been lucky in that I’ve never been totally stiffed, however. *keeps fingers crossed*

We could not avoid this kind of situation as a freelancer, Some clients are sincere and some are not.:(

My previous agency used the technique of threatening to take the site down if payment wasn’t made. In every case it worked. I’d hope not to get to that stage but you’ll find they pay pretty quickly if they are facing a blank website.

You guys are really lucky. 3 clients?
Here in Italy the situation is really a bit different.
You have to work harder and harder only to have the chance of prey for our money

It’s not evre like this, but clients wants quality, short time, cheap costs and keep long long time to pay.

I think i’ve to take a plane to US.

Bye, Alessio

I had experience it once.. he told me to finish 50pages of the webpages and then he will pay me, after 5days I email him that the request he requested is being done… suddenly he replied my email on the 3rd day after I emailed him, what kind of client is that I though his not like that, be ashame of yourself, and now he keeps on emailing me to add new pages in his website, did I reply him? NOh,… This is my personal experience and that would serve as a lesson to all freeelancers. Thanks. nice article Collis.

I had a client whose checks *ALWAYS* got “lost in the mail.” I’d send the invoice, wait a few days, his accountant would email that the check had been sent. Six to eight weeks later — still no payment. I’d call up and they’d swear up and down that they’d sent it, give me a check number, etc., then casually suggest that perhaps my mail was being stolen from my (locked) mailbox. Perhaps a believable argument if any of my other mail had ever turned up missing, but the “thieves” tended to target ONLY his checks for some reason. This happened to 4 of the 9 invoices I sent to him during our working relationship. The last invoice I sent took 6 months to be paid in full. He claimed he needed to pay in installments since an employee royally screwed up and he’d been dumped by a major client. And the three installments? Yup, one was “lost in the mail.”

Needless to say, I don’t accept assignments from him anymore.

In fact, i’ve never had an issue like that, with a client, but I already got one with a company for who I worked as a freelancer. Even if they are a big company well established in my city (and running on big money), they always paid me 2 or 3 months later, saying that they “lost” my bill. (And it was the same for little or big bill). And when they were calling me, the contract has to be finished for yesterday. Fortunately for me, one day, I “lost” all the time I had to work for them…

One of my clients still owes me close to $500 and they refuse to pay for no apparent reason. Just did not want to pay I guess, must be nice. I should try that with my mortgage company.

This is a really good one. One of my past clients kept putting off the payment when ever it was time to pay up. Every time I would got to pick up the ‘check’ that apparently never existed, he kept adding to the job thinking that it wouldn’t cost him more money than what we originally agreed on. So the day before I leave for Germany I stop by one last time to try to get my money. Once I got their he started going over the website again and adding to the list of revisions. When it was time to leave I asked for the check and his words were, “I can’t give it to you today. The printer is broken.” At this point I was ticked, and decided that I was done, money or no money. I wouldn’t try to contact him in the future, take it to small claims, I was just done. Unfortunately I learned a bit later that you don’t even need an actual printed check to get your money. Your client can simply write all of the information on a piece of paper, and sign it. Most banks will take it. There’s a little tip for those of you who happen to run into clients with broken printers. =)

When I started freelancing I had this problem a lot. I would always get an excuse that money is tight or they try to find something wrong with the work to delay the payment. I started to do credit checks on the client to make sure that payment may not be a problem but that cost a fee and 8 times out of 10 the client just wants to know a fee and no work is even started.

What I eventually started doing (and I don’t think it’s a simple solution) was I started a partnership with a bank. When I get a new project what ever I charge the client the bank pays me in full but the client pays the bank a monthly fee based on their credit history. The client pays similar to how you would pay a credit card bill or a loan. The bank also gets a kill-switch that allows them to temporarily shut down the website if the client is delinquent of payment. I’ve never had to worry about background check fees or late payments ever again… but… sometimes it’s harder to get the job because the client may not be cool with the idea of paying a bank. Now I deal more with major brands and they pay immediately without a hassle but the problems that accrue from that is a whole other animal.

GenoBaby, that sounds like a really cool idea – what did you have to do to get it set up like that?

I too have had this problem in the past, luckily it was always with a web project. As a form of payment insurance I never let clients know their own login credentials to their websites until I have received final payment. In situations where they do withhold payment I just turn off their site (sometimes with a little note about how they should pay their vendors ). This usually gets them to send a payment over rather quick. Unfortunately with print projects this is not usually quite as easy.

However, this is also why you should get a sizeable amount of the money up front. This can really help eliminate the people who do not intend on paying you.

I had a client who told me over a two month period
(1) the check is in the mail
(2) the check must have got lost in the mail I’ll resend it
(3) I never got around to resending it, the check is in my home mailbox waiting for you, just come and grab it
(4) My husband forgot to put the check in the mailbox for me, it will be there tomorrow.
(5) Later that day, I called the client later and asked if she had time to talk about the payment challenge. She told me she was actually not at work and at home. I told her that was ok and I was driving by her house and would come for a quick visit. I finally received the full payment by standing in her kitchen for 15 minutes while she looked for her checkbook which she must have been “misplaced”. The check was for the full amount of $400.

This makes me fell good…
http://www.spamyourenemies.com/

Early in my freelance career, I had a string of clients in a row who didn’t pay or were severely late with payments. In one case, the client kept telling me that he had already sent the money, and it must be my fault that I was too “irresponsible” to keep track of the payments. It was only after I provided him with partial bank records of mine (which of course didn’t reflect having received the money, because I hadn’t) and basically opened up all my record keeping procedures for his review that he realized that it was an “accounting error” on his firm’s part and remedied the problem (the firm, a marketing company, went out of business a few months later, so I suspect this guy had more than one “accounting error” on his hands).

I decided after those incidents that I was going to maintain a zero-tolerance policy regarding payments. I’m lucky enough to have a lawyer friend who helped me work through some of this stuff. Here’s what I do now:

1. Always work on a contract. In that contact, make the deadline for payment ABSOLUTELY clear (mine is 30 days from the date of invoice, which, according to my lawyer friend, is quite generous — he suggests 10 business days or two weeks, but I’ve found that some of my clients just can’t hack that).

Include a clause to the effect that interest will be charged on late payments. Make the interest rate high enough to incentiveize clients not to mess with you — I do 10 percent of the outstanding amount, compounded weekly for every week the payment is late, starting the day after the due date (meaning if payment is postmarked one day after its due date, you’re already up 10 percent). Make no exceptions. One nice thing about this arrangement is that it makes you less worried about receiving payments late, because hey, if they can’t get it together to pay you on time, free money for you

2. This one should be obvious, but I made this mistake early on, so maybe its worth saying. Don’t do ANY work until you have the contract signed and returned to you. I had a client tell me that he had signed my contract and that it was “in the mail,” so I did probably $500 worth of work for him before realizing that he had no intention of signing the document, and that he was essentially intending on stealing my labor. Luckily in this situation I was able to document (from e-mail exchanges) that I was working on good faith that the contract was on its way, so a quick call from a lawyer got me my money before I parted ways with the client.

3. If you sense a problem on the horizon, log the date and time and take notes on every phone conversation with every person you speak to at the firm you’re working with. This includes assistants and secretaries and so forth.

4. Someone already said this, but if you’re working on the Web, guard any passwords and login information with your life. If your client has already established Web hosting and so forth (meaning they already have the passwords), you can always resort to cheap-ish tricks like using .htaccess to password protect their site until they pay. Remember: you know more about technology than most people

5. Have legal representation at your disposal (but never use it unnecessarily!). Like I said, I’m lucky enough to have a lawyer friend who has helped me out for free in the past, but a lot of lawyers will charge a minimal amount of money to call your client on your behalf and throw a lot of legalese in his/her direction. You can threaten to sue on your own all you want, but a phone call from a REAL lawyer scares the pants off of people. I’ve never had to take any real legal action against any clients; but I have used lawyers to contact my clients for me. In a pinch, I’ve also had my accountant call on my behalf to collect. Make arrangements with a lawyer in advance for these services, so you don’t end up blowing a bunch of money on representation you don’t need.

Hope this helps all… this is one of the most frustrating things for a freelancer.

Great advice from Jeff (especially including the past due fees in the contract)!

My technique before I have legal step in is to send a certified letter return receipt with the invoice enclosed (and a big OVERDUE on the invoice). Clients get nervous at looking at all of the stamps and stickers on certified letters and usually will sign for them! In case of deadbeats (which I had one classic deadbeat who called me about the letter and then refused to sign for it — nice — threats of legal action and collections often due the trick.

I’ve been stung badly a number of times. Sub Contracting to companies that have gone bankrupt and another that had it’s Government contract canceled after an ICAC inquiry which left me with a massive debt. But I came out even in the end, when StateRail paid me, and sixty other subs, for three months to do nothing.

In the web boom days I was freelancing for a studio that was paying stupid money for all sorts of unnecessary waste, until they went bust when two big Telstra type clients refused to pay.

I’ve had clients drip-feed me payments over extended periods. Other clients that drill you down to get the best possible price and then demand gold plated service, micro managing jobs until 3am Monday morning and then show up on your doorstep five hours later.

I had another US client that hired ten separate freelancers to do the same job. It was a US based studio that was pitching to Universal and they wanted the best possible pitch. Needless to say that went pear shaped. Then 18 months later they came through with another job, which they fully expected me to take-on despite the previous non-payment. Luckily I was in a position to demand payment before taking on the new job and of course I dumped them just as soon as the payment cleared. But I did have some fun first, it was interesting to see how far I could push it before they snapped.

I think when you start freelancing there are a number of traps, you can easily fall into. But once you’ve been stung a few times, you begin to recognize them.

Hey i know this is the wrong post but does anyone know how the calling card competition is going?

I’ve not lost out yet, but I have one client who seems incapable of printing out my invoices which are sent via email and requests that an invoice is sent in the post, delaying things that little bit more.

As mentioned above, a contract should be signed before doing any work…….. I REALLY need to start doing this, after 2 years of freelancing, I suppose I’ve just been lucky and not lost out. Hosting, which I also, seems to be the area that I could get stiffed on the most as again I have no contract in place.

Anyone know of a good UK focussed contract template for freelancing and hosting?

Kinda the same but different.

this actually just happened to me this weekend. had a rush job contracted through a freelance writer/project manager that was ok money, wasn’t anything i would put in my portfolio but thought Christmas is coming so i could use the easy money. finished the job up as quick as i could, and submitted an invoice. contractor i was dealing through got paid right away and cashed the cheque, taking out my cut and setting it aside for me to pick up a couple days later when i was in the area. picked it up a couple days later, didn’t count in front of him (didn’t want to be rude) but noticed a rip in the side of the envelope when i got to the bank machine. did a quick count before i put it in the machine, and notice the envelope was $300 dollars short! was about to phone the contractor right then and there, but though it best to wait til i got home and cool down a bit. phoned the contractor, who was stunned silent on the other end of the phone. after a moment of thought, he told me he would get right back to me and hung up. about an hour later i get a call back from him, and can hear his wife yelling up a storm in the background. turn out that one of his 3 young(ish) sons had happened across the money and didn’t think that anyone would notice, although they won’t admit to it yet. still waiting for the money (don’t want to pry, and still within 30 days so all is still good) but thinking with the treat of no Christmas the 3 nuts should crack any day now!

btw, i’ll be insisting on cheques from now on from this contractor.

I’ve been burned a number of times starting out. (Never do work for someone you’re dating.) Now, I give my clients estimates, then request 50% upfront before starting any creative work, and if I’m brokering the print job too – 100% of printing before delivery. Strictly a business decision if they ask. Not only does it get me motivated to start working on the project, but it keeps the client from being lazy. I’ve also put in a clause on the invoice for late payment penalty of 8% or $50 after 2 weeks, which I have invoked and been paid a few times. So far, so good. The bottom line is you need to relate to your clients that you are a business and expect to be treated like one.

I dont start any work without a deposit. That way if the refuse to pay or leave half way through the project I at least make some money for my time. Once they have decided on a finished project I send them an invoice for the remaining amount and dont send them the finished files until its done.

Im sure this is the way many of you do it. Im just pointing it because so many new freelancers do work on spec or send a bill at the end of the project.

I dont do enough freelance work to use something like freshbooks, but that seems like a good option.

Early in my career I had problems with this, but fortunately I’ve gotten wiser. That doesn’t stop some people from trying to rip me off, though! My favorite was when a well-known musician asked me to do some web work for him. Payment was to be arranged through his manager, and every time I talked to the manager I got some form of runaround. They were trying to “good cop, bad cop” me – the manager doing the dirty work while the artist always acted all eager and confused about why things couldn’t move forward. Of course, I didn’t do the work, and when it became 100% clear to me that they were obviously just trying to suck me into doing free work for them, I politely told the musician that I was sorry, but it didn’t look like things were going to work out. Bye.

The icing on the cake was his response to me. He told me knew I liked his music and admitted he was hoping I would want to “support him” by doing this work for free. I suggested he find a student or a young groupie to do his site, but that he’d get what he pays for, and if he wanted a professional site he would have to pay what it costs to do the work. In the end I saw that he’d gone with a boring template from the label. *sigh*

I agree that a deposit is essential, especially for new clients. Deposits (1) improve your cash flow, (2) commit your client to project so they’ll give you valuable feedback instead of giving up anything less than perfection on the first try, (3) encourage the client to treat you professionally, and (4) help you cut your losses in case of non-payment.

My problem is I break my own rules. As a writer, I’ll sometimes get a small proofreading project or a print ad with a few days turnaround time, not enough time to receive a deposit in the mail.

I’ll tell the client I’ll get started as long as they pay the deposit when the agreement is made, but my mailbox remains empty longer than it should. Any suggestions?

(I suppose I could use PayPal, but I hate their high fees.)

Unfortunately I have been through this problem too.

I have done a job for a client and another but as a bonus on RAC. And he said hes clients stopped working for him but he kept asking for the PSD.

I have realized he was trying to fool me so I contacted the site administrators. Things worked out eventually but unfortunately my resume had to suffer because of his greed.

Now I have learned my lesson and I don’t make or at least I will try not to make any mistakes anymore.

Awesome comments here!! This post is really comment-encouraging (or something)…

I happen to be in the middle of a situation with a client. I started freelancing recently (a month ago) and this was my first client.. The client asked me to do some web application job for them and I cleverly send them the cost specifying deposit fee (50% – 50%) it was a 7-day job so I tought that was more than enough to settle down professional-roles in there.. Anyway, I then uncleverly accepted to start the job without the deposit because my client’s japanese clients ’screwed up with their payments and they were quite tight with money’… I’m very young and in the precise moment I came up with nothing to reply with I know i don’t have to hear excuses of my client’s lack of money or willing to pay up but this was the first time

I really needed the money in that starting project, but now things are getting along quite smoothly by themselves regarding cash and work, so I think i will catalog this client within the ‘Bad-Paying Breed of client’ and start working with contracts…

BTW Really cool tips Jeff

Greets from Mexico and keep up the good work!!!
PS: (Can I offer my services around here?? hehe)

Deposit (50%) is due upon signing a contract and no work is started until any checks have cleared. I also host the project on MY server until it is completed and final payment is received. Once the final payment is received and cleared with my bank I will upload it to THEIR server, and not before then.

@Henry- Why not mark-up your costs enough to include the fees PayPal charges? Just be sure to tell your client that a 3% fee (or whatever PayPal charges) will be added to cover the processing fees.

We had this happen a few times. There was one group of people, everyone knew everyone else, and all we ever did for them turned out being a pain to get paid for. One of the biggest of those was a nightclub… surprise, surprise.

They approved the site again and again all along the process and then would not put it live. (Putting it live constitutes payment of the 2nd half for us.) We were patient, but when their contractual year was up to decide we called them a final time and asked if they were ready to go live. “We’re not happy with the site,” they said. “News to me!” I thought.

We did get some creditors after them, and finally decided to just let it go. It’s not worth all the hassle. We deleted all the files we’d done for them from their servers and chalked it up as a learning experience. It was just that too.

Just like MAVE said, the longer we’ve been in this the better we get at knowing when to simply turn down a potential client before we start. In fact, the “10 Signs You Should Drop a Client Like a Bad Habit” on this site is a good reference for even BEFORE you sign a client.

I’ll never have another client again without legal documents to back me up. My first client screwed me over by telling me I wasn’t doing the work I said I would. It was early in my career (I am still in college and it was during my first internship) and I told the client this was a learning experience for me. He agreed and the first project went well. The second one didn’t go the way I had planned, but it was the fault of the graphic designer not me (I had promised a newsletter, but I needed the graphic designer to design the layout and art, as we had agreed upon going in). All I got was the condescending partner of the project and no money. The partner said something about having to sell cookies at Wal-Mart to make-up for lost profit. Still not sure how the her little bake sale went.

ZM

If you’re a programmer, there are easy ways to safe guard yourself against this kind of thing, of course some may question your moral integrity. When building a web-site back-end with PHP, or some other scripting language, try including a key piece of back-end logic in an encrypted serialized file from your own server. If you run into an HR issue, the key to this file can magically disappear, along with a functional site you had left them with. This will get their attention really fast, but don’t expect them to trust you any more!
Phil

I’ve run into this problem before. The first time was early in my career and I won a judgement in small claims court that was eventually collected in full through a collection agency (interest made up the difference of the agency’s charge).

I’ve also had a problem with very large corporations (who don’t pay deposits on “small” projects). I had been doing contract work for a couple of years for a VERY LARGE corporation when the people at the very top decided to start messing with money (withholding outgoing cash to vendors) to look good for shareholders at the end of the year.

It was never a question of IF I was going to get paid, but rather WHEN that would happen. And the client was good to work with and contributed a large percentage of my work, so I had no option but to keep working and waiting to be paid. I didn’t have any leverage with anyone. The people in charge of the department, accounts payable, legal, etc. didn’t have any leverage with anyone… It was all very tight-lipped, behind-the-scenes and unethical, if not illegal…

Three to five months later (according to project end dates), I got paid. Just in time, too. Since then they’ve been on and off with payments and I’ve stopped working with them.

@Henry I use ppcalc.com to figure out the exact paypal fees – it’s fantastic! I write in my contract that payment with paypal will include the fee, so it’s up to the client how they want to pay.

I agree with everyone else – don’t start without a deposit. For flat fee projects I require 50% to start. For hourly projects I require a nominal deposit at least for first-time clients.

Yup, it’s happened to me too. Luckily only once in three years, which seems like a stroke of luck compared to some folks I’ve heard from.

The one time it did happen to me, I saw it coming but stupidly continued to work anyway. It was the early days and I was hungry! My client’s emails started getting shorter and shorter. His spelling got worse, and the grammar was so awful I almost couldn’t decipher it by the end of the project.

Up until that time we’d been trading screenshots of his desired logos pretty frequently. But on the last set of logos I sent him, because I was feeling suspicious about the whole thing, I covered the final logos with a watermark. I think maybe he figured I was on to him at that point because I never heard from him again. So I learned my lessons too. I’d list them but they can all be found in the other comments.

Thanks, everyone!

I’m still dealing with a client who won’t pay. I think I’m on year 2. They don’t owe me much anymore, but they keep telling me they will pay it. It’s become a game. I have my yahoo.com calendar sending me a text message every monday to call the client and ask him to pay. I email them at least once a week, and my latest tactic is using a picture of my daughter looking all sad and pathetic pulling out her empty pockets. Check it out:

http://jorgegoyco.blogspot.com/2007/11/how-to-get-your-clients-to-pay-on-time.html

It didn’t work, but I’ve got more kids. I’ll be sending picture number 2 this week.

Be that squeaky wheel.

jorge

I always take 50% before I start. So that keeps clients who are intended not paying you at all at bay. On larger projects I also write small invoices for every full 500€ during a project. If the cash flow is interrupted, the design process is as well. Also its

Anyway, I had troubles with a client delaying payment, here is what I wrote… (got my money though after eight weeks!!!)

Dear Lorem Ipsum,

refering to our skype-chat last monday we decided to wait if the invoice gets booked to my account within this week. Unfortunately the transaction did not happen until this friday morning. The invoice is now out for 4 weeks already.

Please take yourself a moment to realize, that freelancers are generally very dependent on the quick and reliable payment from their clients. There is a rent to pay, a fridge to fill, monthly leasingrates for the computer and software, health-insurance, phone bills and electricity costs. All the stuff that it takes, to make a living of this business. By delaying or refusing payment, you accept the fact that you put your freelancers existence at stake. Thats not the nicest way to say “thank your for your good work!”.

I really enjoyed working with you, but a good work relationship is always based on trust. You trust in me that I will always have a bright idea when one is needed and that I deliver in time and budget, and I trust in your company, that I will get my invoices paid within two weeks.

Dear Lorem Ipsum, I kindly but promptly call you to please seriously start investigating wheater the transaction started from your companies accounting. I know that the delay is propably not your fault personally, but since you were the projectmanager who hired me, you have to understand, that I turn on you with this issue. Attached to this mail you find a copy of the invoice.

Luckily I have managed to avoid clients that simply refuse to pay, but I have had a whole bunch of late payers, and it annoys the hell out of me. A couple days over due is fine, because that usually just means they payed the bill the day it was due and it took a day or two to transfer the money from their bank to mine.

But, in my part of the world there’s a law saying that I have to wait two weeks (after the payment was due) before I’m allowed to send a payment reminder with an added reminder fee of about $10, to compensate me for the trouble. This, also, is fine. I wouldn’t want to be allowed to add the fee the second it goes over due, but it seems some of my clients are fully aware of this and deliberately wait as long as possible, right up until the point where I’m getting ready to send them the reminder, and hey presto, there comes my payment. One week and six days too late.

When I just started freelancing, I used to do a lot of work for family-friends. One of them owned a limo company. They insisted that they pay a deposit. Being close family friends, I said no its fine. I built them a beautiful website (and charged only $250 – I was in the ninth grade). After I presented the website to them, they asked for a weeks time. I gave them a week, then two, then three. I found out later that they went with some cheap ugly website from Discover Cards (i guess Discover offers ugly websites to businesses for about $50/month). To this day, I see them at random family get-togethers and they never bring it up. I don’t even think their website is up anymore (Thank God, that site was uuuuuuuuuuuuuugly)

I had a client who hesitated to pay me and her excuses were really funny. At one point she told me she has a complaint — she couldn’t open her web with PowerPoint and wanted me to make the web openable in at least 5 most used programs…;)

There will be always late payments and people that won’t pay, clients that think of their selves art directors and when the job is finished they think they did the whole thing.

I personally had some problems during my freelance career (thank God i am not a freelancer anymore).
One of my most interesting stories was when client stressed me and my mate weeks with small edits and weird excuses to consider the project done and at some point, he just disappeared. No emails, no phone calls … and we said … this is this … let’s go on with another project instead of waiting money from this client.After about 3 month, the site we did, was online and fully functional, so he was actually using what we worked on … and the some crazy idea we had, let’s see if he changed his CMS password. The rat bastard did not … and then we deleted all the content on the website and uploaded gay porn content and sent an email to all his customers, via CMS, and let them know he is in honeymoon and if anyone interested can see pictures from honeymoon on the website.

The site was running this way about a couple of weeks and the he uploaded his old website back.

I think this client will now pay freelancers from that moment … or at least change the CMS password he received from the freelancer.

Or some other thing that can happen, on freelance sites such as rentacoder.com Since the client accepted the project, there is no turning back. if the project is finished the money will automatically get into your account. If there is something wrong during the project, sure, he can put that into arbitration and get his money…but other bad experience I got via rentacoder.com was that client had to option to not pay me, since he accepted the project as completed, but he gave me a bad rating for no reason. All was ok during project. Strange.

So, take care and wish you success and luck to all freelancers out there.

I had two clients who didnt pay.
One didnt pay a dime,
And the one paid half. Trying to get the remainnning half (been more than 3 months, already)

Most of these comments are just war stories, not solutions. This includes the original post. I’m sure every single freelancer in every single career field has similar stories. I was hoping to see solutions… not just read a bunch of “me too” posts. There are few gems in the list of comments though.

What I do….
1) Always get a non-refundable deposit of 30-50% up front. Always. Even if the quote is $50.
2) Invoice immediately after a project is finished so it’s still fresh in the clients mind.
3) Always follow up on past due invoices the DAY they are past due.
4) Be certain you’ve built in an average of 20% loss in your rate schedule since you’ll always be dealing with it.
5) For print work, never supply all necessary files until a job is paid for in full.
6) Web work. For site building follow #5, for web updates be prepared to remove your updates and restore a backup if payment is not received. I can’t tell you the number f times I’ve gotten a check immediately once I restore a site back to how it was prior to my working on it. Backups rule.
7) Keep accurate records and detail on every invoice and past due notice exactly when invoices were sent and for how much.
With each past due notice, add late fees so the invoices increase. These increases will often spur on payment when the client realizes the more they ignore it, the costlier it gets.
9) NEVER do one moment of work for a client once something is past due.

With these posted, I do still have similar war stories regarding payment delinquencies. It’s unfortunately unavoidable with some clients.

Please don’t go for the following website. As he doesn’t pay for the work and also give out bad services to his clients too.

http://www.charleswinters.com

Learned this lesson hard and very long ago (9 years to be precise) – unfortunately it was with our very first international client, the client paid via card to our account and then reverted the transaction after we delivered the goods. After this we started asking for advance and wire transfer directly to our bank – this worked but was cumbersome for long projects. Since then have shifted to a pure hourly billing and the clients are sent invoices on Saturday evening. Payment is expected to be made within next working week or the work stops. This has worked very well over the years and limits our exposure to a maximum of two weeks.

That said – we have never had a problem since our first one

That is funny i should read this post today, i do a little freelance work to help buy some extrsa treats for myself and a few others. I have just inncountered a SEO company that asked for my help, with SEO.

I didnt know that they were a ceo company untill they refused to pay. I gane fore than 10 reasons why they were not getting good ranks in google and they said no no no! We know of these problems they arent contributinbg. THEY STATED they knew the problem existed they should have told me that its no “bla bla bla”instead of me doing so much work to find out they knew! so after i found a few more easons they said that is not what we want to here, basically and refused to pay!

This has been dragging on for over 3 weeks now and its all over $20!
The site i get my freelance work from is now taken action!

I’ve had unfortunately many times that I have not gotten paid One was actually an employer and even if i sued i wouldn’t get anything for a long time cause a) he’s a con man and b) he declared bankruptcy so that definitely sucks. The other was a client I’ve had off and on and this most recent time that he contacted me for work, he contacted me every single day asking how the project is coming along, then I get it to the point where its 90% done and he’s gone no word since. Boooo!

After a few months I sent him a christmas card, then he paid.

Its annoying to do and feels awkward but as a last resort I found that “breaking up” with the client inspires the client to pay. “Its not working out between us”.. “you would be happier with someone else”… “Its not you, its me?” ohh that one has nothing to do with design…opps! Nobody likes to be broken up with and the naughty client tends to show up with payment and asks to “work things out”.

Wow, looks like a great discussion going here, I’ll have to print this all out to read it

One thing I would say about deposits actually is that we did used to take deposits … most of the time. There are just some times when its really hard, for example if you are doing say the fourth job in a row for a client and it’s a big rush job, it’s really hard to stop and go ‘we won’t start on this until you’ve paid us a deposit’ because they will say something like, ‘but we’ve been working together for months now and we really need this now, we don’t have time, lets just start and then we’ll sort the invoice out as we go…’ I never really figured out a solution to that problem!

I’ve had many interesting stories of non-paying clients. As a photographer and designer. I find it humorous when people think that they can use the work I’ve done for them without paying me. I will share a few of my favorites…

1. A friend I worked with was planning to do an art project with body painting (calligraphy text on parts of people’s bodies, etc) and asked if I would photograph it for him. After ranting for 20 minutes straight about how angry he was that people don’t pay him what he thinks is fair value for his work, he told me he wasn’t going to be able to pay me the rate I wanted to shoot his project. When I told him he wouldn’t see the photos unless he paid me – he wrote a check on the spot.

2. Through another friend, I booked a photography job for a very large company taking “headshots” of their executives. After sending them an invoice for this very large job for a deposit, they said that they don’t pay deposits. While a red flag, I knew other people who worked for the same company and they told me they usually paid very quickly upon completion. So I went ahead with the job. After submitting the invoice, I was told the payment would be sent out in 30-40 days. I acquiesced and mentioned that in the contract that any late payments would be subject to fees (10% of the total amount billed immediately the day the payment was late, and every subsequent business week the full balance was not paid). Well, 40 days go by (after reminding them at 29 days, 35 days, and 39 days that the payment was coming due) – I sent them an invoice for the late fee. I was asked what the invoice was in reference to. When I reminded them, they said they would look into it. Another week went by, another late payment invoice. This went on for two months. The original $2000 job was now more than double just because of the late fees. Everytime I tried to call, I would get the run-around. So, I decided to take matters to the next level. I drafted a letter notifying the company that since they had been using my photos without paying me for two months, they had been violating my copyright – and since I could sue them for every instance of copyright violation (and there were hundreds of photos) – we were talking about a rather large lawsuit. A check arrived for the full amount, including late fees, within two days.

3. My absolute favorite story of non/late-payment. A local bar I was a regular at asked if I would create and maintain a website for them. I gave them an extremely fair price based on what they wanted ($500 for the site – including flash and hosting, $50 per update). They paid the deposit, I set up the site and did about half a dozen updates in the first two months (flyers for events, specials, new menu, etc). When I came to them with the invoice for the balance and the updates, they mentioned that business was very slow and they couldn’t really afford to pay at that time (it was during the summer shortly after the anti-smoking bill went through in NYC so it seemed like a legitimate claim) – but they said once football season rolled around they expected larger crowds and would pay me and have me start doing updates again.

Well, football season rolls around – and 5 new large plasma screen TV’s show up at the bar. Still no payment. I ask the owners when they plan on paying and they say “Soon.” A couple weeks go by and a friend tells me that they want to “talk” to me. I figure its about getting things started up again. They tell me they want a copy of the paperwork – I assume they mean the invoice (perhaps it got lost) and I send them another copy. The response? The next time I come into the bar, one of the owners approaches me and asks “What the hell am I supposed to do with an invoice?” My response, “Pay it?” He replies that he wants the passwords for the website. When I ask why he simply responds that he wants it.

After several attempts to contact both of the bar owners, there is no response. I send emails, l leave phone messages explaining that the balance has not been paid and that I still own the design and I would like to discuss why they want the passwords. A couple weeks go by and the only information I get from them is that they want the passwords – ASAP!

So I write them a letter detailing that I am taking the site down, keeping the files until payment is made but they can have the passwords in case they want to go in a new direction. If they want me to continue using my design or having me do updates, they need to pay the balance.

The following week, I am in the bar watching the World Series and the waitress mentions that the owner would like to speak to me. I figure he wants to discuss things. When I am 8 feet away from him, he screams “You are no longer welcome here! Get the f**k out! Don’t ever come back!”

It’s been 4 years and the one time I went into the bar to help a drunken friend who needed help getting home (3 years following the incident) the owner threatened to have me thrown out.

RULE #1 – always get a deposit (even from your friends)
RULE #2 – always make sure your client is aware they will be billed additional fees for late payments
RULE #3 – don’t be afraid to threaten legal action

This happened to me as a nice surprise on Christmas. I did a project through getafreelancer.com in which I had to take a PSD file and convert it into a wordpress document. No instructions were given such as spacing, font sizing, or anything of that nature, just ‘here is the psd get to work’. Well needless to say after 30+ hours of work and being mico managed to hell with moving everything into precise pixel placement or the client’s head would explode I get an email saying that they would like to cancel the project and not continue because it has taken over a month. Well what do you expect when you are so darn precise. I am still in the middle of this, already threatening legal action and contacting GAF about this non paying buyer, so I have no end result to share yet.

For the future here are some safeguards I intend to do.

1) Only develop on my server (if applicable)

2) If not able to develop on my own server ensure some sort of safe guard ‘back door’ entry into hosting account in the event the client decides to go rogue and lock me out of the files I created.

3) Use contracts for jobs over 100 dollars

4) Use an e-signature service such as docusgn or echosign to have these documents signed legally with an electronic signature making the contracts binding.

I just signed up with both docusign and echosign, i like echosign better, its a bit easier IMO but doesn’t seem as indepth. Can anyone else recommend any good electronic signature services?

Regarding the above post.
We always pay our employees.
In fact we are now hiring data entry operators and web design teams.
We had a bad experience with Dave (Vinnyak).
He worked on a shopping cart for one of our clients.
He lost all of the products and the navigation no longer worked and then wanted payment?
I had to recreate the entire site for the client.

Take a look at our site and you decide if we do good work.
We welcome working with anyone and look forward to hearing from you.
Charles

I am having this problem with a client as we speak…she keeps telling me the check is in the mail but it mysteriously never arrives, even after we’ve threatened to take her site down. My question is– is it legal to take someone’s site down (by removing the files from the server) if they have secured their own hosting? I just want to make sure she can’t sue me for removing her site files from her host. I created the entire site and did all updates, if that’s important. She just signed up for her own hosting.

Good to find some tips and solutions but I find it very useful listening all the different experiences of “me too”. I learned a lot of various excuses client(s) can come up with when they want to avoid payment and it’s good to learn these signs so it can be spotted from 100 yards away the next time.

I’m also having a problem with a client who at the end of the project (after his project manager left the company — it wasn’t clear whether he was fired or he quit) said that the e-newsletter I designed was not “of designer quality” (which I found out through the writer/editor who brought me on board for the project). The Client & I agreed to preserve the current branding (even if it didn’t look good because the project manager said that they wanted to re-brand). When I spoke to the CEO, he said that the project was not delivered on time and he didn’t like the design. I asked him to specify what he wanted changed – never seen any emails specifying requested revisions and I was maxed out on the estimated budget. A week after sending the final drafted revisions that the writer & I thought could help make it look better, the new project manager told me that “he’s moved on”. So, I sent them an email pointing to the contract’s cancellation fees and that late fees would be subject to 5% monthly interest as well as notifying them that I would take action if they decide to not pay me at all. They replied quite promptly saying that they’ve sent the cheque last Friday. I haven’t seen any cheque to date but I’m giving them the benefit of the doubt — despite the avoidance behaviour — to see the cheque in my mailbox this Friday. But I won’t believe anything they say till I am able to cash the cheque. This is all for the amount of $440.

Lessons I reaped:
1. Always do a contract up front and never start working till the 50% deposit is in the account and the cheque clears. Set proper milestones for payments to coincide with the schedule as well. No more work in good faith for new clients – you never know.
2. Demand proper creative briefs and clear direction before work starts.
3. Do reference checks on clients just like a potential employers would when they’re going through the hiring process – ask for fellow creative references (writer, editor, copywriter, photographer, illustrator, web designer, graphic designer). Ask around the community to see if they’ve heard anything. “He’s a nice guy” doesn’t cut it.
4. Persistence and assertiveness.
5. Thanks for the other tips — as long as the contract is there, threatening legal action can always get the client’s attention.

@Robert Gordon, developing on your own server is definitely the way to go in my opinion. We develop all of our sites on a live development server that the client can access at any time. Even for the larger project’s we’ve handled with clients such as Toyota and others, they were happy to accept our terms. Make it part of your TOS and if they’re not willing to accept these, let them go elsewhere. Sometimes its just not worth the hassle.

Just my two cents if nothing else! Thanks to everyone else for posting their lessons/rules. It’s always good to hear what lessons others have learnt when it comes to such a subject.

Rgds,
JB

Beware of the following conversations prior to accepting a client:

1. You can trust me. I am a Christian/Pastor/Rabbi/good guy/mother/whatever.

2. After this little project, there will be a LOT more work in the future.

3. I need a deal because I’ve been burned before/lost $3,000 on prior person/previous person just didn’t do what I asked/previous person disappeared – no I can’t tell you who that was.

4. I’ve been burned before so I must insist on paying half up front and half after delivery. No, I won’t use an escrow service.

5. How about I give you a percentage of sales? This is gonna be huge!

6. I’ve got 2 other consultants who have quoted lower, but I want to use you because xxxxxx. Can you lower your quote?

7. Can I get the quote broken down into an exact hourly breakdown of each task?

8. I speak not good English.

The hardest thing in the beginning is to turn away deals. It might be worth the risk to have something to put in a portfolio if you don’t have anything else to do with your time. But, once you’re up and going, it pays to listen for indicators that the person is a liar, and walk away before getting too deep.

Sounds like my current situation. I have been working with a Jewelry Company Since October. Thought I would have the cash by Christmas and be happy. But they changed colors on my 3 or 4 times…. Now they went and re-shot 100’s of pictures and want me to upload them. I sent them an initial invoice for my work through the 1st of the year. Now they don’t email me back and won’t even give me the pictures… Hopefully soon…. but there is hope being I currently have their passwords for their hosting company. I have since changed them and until they pay their site is going to be a very nice design with 100% white space. I am sure it will be featured on Smashing Mag’s site soon. Haha

In my history as a freelance videographer, I’ve only had two clients refuse to pay. What’s sort of mind-boggling about them both is that they have been good clients in the past. After sending second and third notices, I just sort of got the idea that the economy was pinching them too – and if they were ever going to pay me, it wasn’t going to be because of my asking them to. I left it to karma in both cases. Legal action would just cost me money and cast a bad stain over everything.

I now have a rule. Clients have two options.
1. They pay 25% upfront, the balance on completion, and any outsourcing e.g. photography, printing, hosting – they pay upfront before I proceed.
2. They pay the entire quote upfront and get a 20% discount.

I make really sure that in my design brief I state “any work outside this design scope is charged at ….” and inform them immediately when they do (as they often will).
At the very worst I at least get SOME payment or they do not pay for the extra work. In which case if they ask me to do more for them, I always resend the invoice and say “work will commence on after the previous invoice has been paid”

You gotta be tough these days.

I seem to have had my fair share of collection issues.

Scenario #1:
Obtained client through Guru who asked me to create multi level surveys for her. I accessed her account to create and then make all the changes she requested. I had required a deposit up front for 1/3 the quoted cost. When the surveys were finished and still on her site, she accused me of not knowing anything about surveys and refused to pay the remainder. At the time, I didn’t dispute her non-payment and chalked it up to experience as I figured it would be impossible to pursue it with Guru. (Further note: she created a site to “dis” every freelancer she had hired, including me, saying we all were stealing her money and we (the freelancers) professed to be experienced but were not. I wouldn’t have known about it except I happened to Google search my name and Company Name, and didn’t the link to her comments on freelancers come up 2nd in the search. At that point, I wondered if any of the other freelancers she had hired were aware of her scathing comments and I called Guru to report it. Upon checking her account, apparently she had caused so much trouble Guru had cancelled her account with them.)

Scenrio #2:
A local client left all the bookkeeping work for me in her outside office and was never around when I came to pick it all up. When I returned, once again to bring back the paperwork and electronic QB files, she was never there. We always made “appointments” which I adhered to but she was never there for the appointments. When I dropped in without an appointment, she became flustered and said I must leave all the work there and she would call me when the cheque was cut. She never called. I returned to her office to find that she had vacated the premises and her Company “disappeared”.

Scenario #3:
I did a full year of bookkeeping for a medium sized company. Her paperwork was disorganized or entirely missing. Many times I had to re-install the QB program on her computer and restore the back-up files because she had virus’s. She was also “not there” when I was working on the premises and then she set up a remote account so I could do the data entry from my home office. One day she called me in and asked me to bring the paperwork because she had questions. She asked for the Reports to be run and when she saw the bottom line, she said she was losing money and couldn’t afford to pay me. I had asked for a deposit up front and she paid that, but I never saw a payment after that. She was never available by phone or at her place of business. I SHOULD have delivered invoices each month and waited for a cheque but I didn’t. I was working in good faith and with a signed contract. I am presently taking her to small claims court to collect.

Lesson to myself: Always collect a deposit. Always get a signed contract stating exactly what the client requires and what work is to be done. Submit invoices at each month end and do not continue work until invoices are paid in full. Do not do work “remotely” unless I keep a back-up of their Company QB file on my computer as evidence that the work WAS done.

Lesson learned.

Courtney: As far as I’m concerned, they’re not her files if she has not paid for them and I would think she wouldn’t have a leg to stand on legally. We have had to take a client’s site down for non-payment. Thankfully, that was 3 years ago when we first started the business and quickly learned that you should develop on test servers and NEVER launch before cleared payment has been received.

I think it’s good practice to request a percentage up front for any work valued at over $100. It shows that the client is serious about the work by having them make a financial commitment to the project. I’ve found it also helps clients pay – it’s easier for them to pay in installments throughout the project than a huge amount at the end.

Chuck: Heard so many of those before. I don’t buy any of them.

My rules:

* Have good T&C’s in place and don’t bend them for any client, no matter how big, how small or how long they’ve been with you. If they ask you to bend them, they are not respecting you as a professional.

* Always require a deposit up front equal to a percentage of the total costs. Make it clear at the beginning of the project that work will not start until payment has cleared.

* Never send files or launch a site without receiving final payment, which should act as a confirmation they’re happy with the outcome of the project.

* Make sure you have a booking form or contract signed prior to beginning any work. I like to call it a booking form as it’s less scary than a contract and also tells the client that if they don’t sign it, their project isn’t booked in.

It’s nice to hear others ‘rules’ when it comes to projects.

Prepaid. Prepaid. Prepaid. I tell my clients money is like gasoline, the engine doesn’t run unless its filled up. If the clients won’t do it either you haven’t made your case for the quality of your service or you want different clients.

Without sounding like a gloat, I have never had this happen. I don’t see what the problem is with these types of client. I ask for %50 upfront non-refundable deposit on every single project, no negotiation. If they don’t like it, the door is shown.

Another tip that Ive used for years : When deposit is paid and you are still suspicious of said client.. use a compression software to create a passworded/encrypted archive of the final files (psd’s, html files etc). Email the files ONLY after payment is received and provide the archive password when the client asks. Im yet to have any problems using this pen and paper method.

Just because you are freelance doesnt mean you shouldnt have a tough side Be firm with clients, the ones who are worth keeping will understand.

I had a good friend in High School who started a very successfully business. About a year ago, he contacted me and asked if I would create a logo for him and do a website for him. Seeing as he was such a good friend I gave him the discount of discounts and he agreed up front as to what we were charging him. Needless to say, he LOVED the design. After the work was done, I noticed that he stopped responding to my emails. He now won’t answer my calls and has blocked me on Twitter, Facebook and I’m labeled as a spammer when I email him.

I have no idea what went wrong other than he just didn’t want to pay. It sucked to loose a friendship like that!

Now I ALWAYS charge my clients a % up front and don’t give them copies of the final work until they are paid in full. It sucks to be this way, but I feel I have no other choice. If a friend would do it to me, why wouldn’t someone I’d only just met.

A well-respected consulting firm referred a client to me for a quick-turnaround project that needed to be done in a week, so no time for my standard 50% up-front invoice. Long story made short… the client never paid me the $1,000 I earned, didn’t pay the consulting firm (they were totally chagrined for making the referral to me), and never responded to persistent emails and faxes. (I’m in Chicago and client is in NYC, so I couldn’t show up in his office.) At $1,000, the loss hurt but was not large enough to make small claims court worthwhile.

At one point, I decided to try a personal tactic, and sent an email and fax that read: “Since professional requests for you to pay your overdue invoice have failed, let me make a personal one. I am a single, self-employed mother of a four-year-old boy; I’m sure you can appreciate that every invoice matters to our family. Please send payment today. Thank you.”

No response. I can tell you that the guy is collecting some seriously bad karma.

I’ve been very fortunate up until this year. 2 Clients within weeks of each other created issues when it came to invoicing time because their clients had failed to pay them. I’m sorry, and I don’t want to sound insensitive here to the situations of the economy, but “I contracted with you, not your client”. I finally got pay by 1 of the 2 clients, and I’m “first on the list” for the other client. We’ll see. Definitely made me clarify a lot more for my next client.

I have had my share of bad experiences during my initial days of freelancing, and have learnt the lesson the hard way. I had a client who did not pay for my work, neither acknowldeged it. The project was sub-outsourced to me. I worked for a whole month (16+ hours daily) to realise later that I have been given the wrong specifications on the project by my client. I was told to rework, and I had to put in an other month working on the revised (original) specifications. After submitting my work, I did not hear anything from the client for 2 months. When I began to follow-up for my payment, I learnt that the entire team which had commissioned my project had been sacked, and the outsourcing contract was a failure. The client promised to get me some part payment for my efforts from the outsourcing client. This was just a promise and I had given up any hope to receive any money after 6 months.

But my experience just didn’t end there. During one of my web searches, I found that the outsourcing client had used my work (as-is) on their website, charging a premium of $2250 (per user). When I pointed this out to my client (sub-outsourcer), they claimed ignorance. My work was not covered under a proper contract and hence I couldn’t claim anything.

After this experience, I have become very careful about choosing my client. I found out that working on freelancing sites such as Rentacoder.com, Getafreelancer.com and Odesk help in protecting the interests of service providers. And, I work only through these sites.

There should be a service for freelancers (in various fields) where they can “black list” these buggers (Though I prefer the “go kick down some doors”)

Guess I’m having a dirty mind, but the internet is a very successful tool to diminish a person. Nobody want to know if his name get google’d, it’s there for anyone to see what cheating SOB he/she is!

Just tell your prospective client that your policy is to let them pay 50% up-front and 50% when it’s finished. Then give them the choice to get a 5 or 10% discount if they pay 100% up-front. Of course your normal rate is the one with the discount so if they don’t want to pay 100% up-front you will earn more, but if they do, you have the certainty to get fully paid. With this system you will be paid anyway.

And in case you are not getting paid, why not sending in the bailiffs? Your relation with that client is already damaged anyway because of themselves.

I am also stopping to give a rate per hour and am now using value based fees. you will earn more that way.
It’s stupid to work per hour as freelancer, because if you care about you clients you want to have things done faster and offer more value. The problem is that if you work faster and give more value in that shorter time, you will be rewarded with earning less and not more. So a rate per hour is totally working against you and will work demotivating. It just doesn’t work for freelancers.

I’m just starting out but I’ve encountered such clients already. So far I do get paid eventually…after a couple of emails.
A dear friend even made her own version of Adele’s Chasing Pavements and made it to “Chasing Payments” just for me (am also a jmusic fan!), for whenever I chase clients for payments… haha…sweet girl. Here’s her rough recording: http://www.mediafire.com/?ywyz1kmyitn . I hope you enjoy it as much as I did..~

Should I give up,
Or should I just keep chasing payments?
Even if it’s not enough?~

=) Let’s not give up.~

It was fascinating reading everyone elses experiences dealing with payment issues. With more than 10 years freelancing in film and tv with a bit of graphics on the side I’m sad to say i’ve heard many of the stories above. Fortunately most of my clients EVENTUALLY pay, but there has been one or two who couldn’t grasp the concept of fee-for-service.
I’d like to particularly point out Jeff’s comments as being particularly useful, I employ many of the measures he mentioned including the 10% per week late fees (which I rarely feel the frustration to enforce), and i’ll be reading this long thread again to refresh my memory.
Working in my industry, or at least for the clients I do (major Aust TV networks) everything is always immediate start, fast turnaround. The upside of this is that as major corporations I can be assured I will get paid, even if the invoice occasionally disappears into the black hole of the accounts dept. Speaking of which, is it just my bad luck or are all accounts payable clerks the most tight-fisted bastards on the face of the earth? There are 4-5 people paying invoices all day every day, so why can’t they ever pay an invoice EARLY instead of always late??!!
Another tip, if you work for the same large client continuously, build a phone relationship with the lovely accounts payable clerks, be polite, get them to remember your name, recognise you when you call. After all they hold the purse strings, they know when money has been deposited or if the account manager has in fact passed on your invoice for payment.

Those that use contracts prior to commencing a job, I think many people could benefit from seeing the wording, TOS etc that you present to your clients. I certainly would as this is something I don’t currently do but am considering.
In the spirit of sharing, the below T&C are on the bottom of my invoices. I don’t know how legally binding they are particularly as the client doesn’t see it until the job is completed, but it seems to work ok for me:

>>Invoices not finalised on or before due date may attract a 10% per week penalty on outstanding amount until paid in full. All work completed remains the intellectual property of [freelancer name] until full payment in received. [freelancer name] retains the right to reproduce and display all works for non commercial purposes.<<

For development work I have been lucky so far. My policy of getting 25% down before start, and then incremental payments based on completed milestones keeps clients’ attention in order.

My one bad experience was with hosting a (former) client’s website. They simply refused to pay the annual renewal once it was due, claiming that they should pay AFTER the year of hosting was complete. I explained to them that any other utility (gas, electric, cable, phone) charges you for the next month’s worth of service, and website hosting is no different. What would the electric company due if you refused to pay until each month was done?

After a few weeks the check came in, followed by a notice that they were taking their business elsewhere. I have talked with their new hosting provider and they said that their late with payments too. Oh well, I guess they didn’t learn.

Good to see some helpful tips and shared experiences in here. I’ve just been through my only major payment dispute in 15 years of working, and a few tips I found were helpful are:

* Keep emotion out of it. Keeping all communication to email gives you a record of what’s been said and also a way to check what you’ve said before sending it.

* Be patient to a defined point by setting an agreed deadline that the payment will be made by with the client. If they miss the deadline, they’re probably trying to play you or have no intention of paying, so that’s when the gloves need to come off.

* Use the law as a blunt instrument. If you need to resort to legal threats, the business relationship is effectively over anyway, so make sure what you threaten can be backed up.

* Don’t feel as though you need a lawyer – especially for smaller claims. Most countries have small business claims courts where you can lodge a “Statement of Claim” (or similar) as an individual with no legal representation. You simply follow a process of sending a final demand, lodging the claim and then, if it comes to that, defending your side of the story in front of a magistrate. It costs very little this way, and most clients will pay once they receive the “Statement of Claim”. Who’s got time to fight a losing battle in court?

* Make sure you have a “termination” and “non-disparagement” clause in your T&Cs in any contract. This way you can “fire” the client once they’ve finally paid and be safe in the knowledge that you can sue them for defamation if they start spreading misinformation about you.

* If you’re building websites, you have every right to remove files that haven’t been paid for. Don’t do anything that the client may use against you at a later date if it goes to court though – e.g. deleting their email accounts from hosting you don’t control.

* And finally – you can’t argue (or hope to win an argument) with liars or fools. Don’t waste your energy being drawn into drawn out arguments over whatever little issue. Hang up, walk away and revert to step one.

I’m going through this non-payment fiasco right now with two clients. Here are the scenarios:

Client 1: Signed a contract for a rather large project which involved around four months of development time. The client would frequently disappear for a week or more without any communication, come back, meet with me in person to review status, and the project finally finished three months ago. Since then I had not heard from the client in any way and I left voicemail messages, emails, and sent notices via snail mail. Yesterday I get an email from the guy saying he spoke with a friend of mine who said i was sincere and that he thought I delayed the project so I should just give him the files and he won’t pay me any more than the deposit.

Client 2: Two large simultaneous large projects with this client. They want stuff done for the web that you can only do in the print medium — and I’ve tried explaining this countless times. For this guy I’m billing hourly on one project (it was just a site maintenance type job which I didn’t think would need a contract) and I’ve got a contract for the other. Both projects have payments that are due and this guy isn’t responding to any of my calls, emails, faxes, or mails.

So what should I do in both cases?