Getting Paid: How To Prevent Clients From Paying You Late
Freelancers have the most unusual type of obstacles when it comes to getting their clients to pay them. Beyond customers going M.I.A. or claiming they forgot, sometimes freelancers find clients refusing payment because they are unsatisfied with the work or not sure if it’s what they wanted. Yet, the work was done, so you deserve to be paid. End of story.
As a freelancer, you need to take proper and effective precautions to make sure you don’t find yourself in a position where a customer is paying you late or not even paying you at all.
1. Do Your Research
Get to know as much as you can about a client before you agree to do business with them. Get references from people who have worked with them and even pull a business credit report on a client if necessary. You must find a way to verify their financial behavior. You don’t want to bother wasting your time with someone who is notoriously a deadbeat.
2. It’s About the Contract
Never do any work on a freelance basis without having a well-structured, detailed contract. Although this takes time to prepare, it can end up saving you time (and huge amounts of money) in the end. Verbal agreements, handshakes, etc., these kind of agreements will never be enough. You need it ALL in writing.
You need to make the customer sign to the fact that, basically, they won’t be wishy-washy.
Be sure the contract specifies exactly what the payment terms are. Do they owe you money up front? When is the exact due date of the payment? And of what amount? Don’t leave any room for questions. Make sure a customer knows exactly when and how much they have to pay and signs to acknowledge this.
Include in the contract that “opinionated oppositions” will not be accepted. Specify that customers are paying for the service provided regardless of final reactions and that you are promising to deliver the service to the best of your ability in line with everything they ask.
Include in a note that if a customer decides that the original service was not what they had intended, or if they’ve changed their mind, that is to be considered a separate process and transaction. You need to make the customer sign to the fact that, basically, they won’t be wishy-washy. This video provided by the “Don’t Get Screwed Over” campaign highlights exactly what I mean by “wishy-washy”.
3. Utilize the Invoice
Just as with the contract, don’t let your customers have any questions after receiving the invoice. Provide every detail a customer would need to make a payment: how far away the payment due date is, when the exact payment due date is, how you accept payment, and how to contact you with payment details.
Don’t include other unnecessary language in the invoice; get right down to the point. Also, use some well known tricks when invoicing your customers. For example, if you have a please and thank you in your invoice, you’re more likely to be paid. Take advantage and craft the most effective invoice that you can.
4. Constant Communication
Sometimes customers just forget. It really can be that simple. Make sure this doesn’t happen with your customers. Keep in touch with them so you stay on their minds (and their payment priority list).
If it is a week before the due date and you still haven’t received your payment, send your customer a friendly reminder letter that their due date is one week away. This can be a huge help for your more absent-minded clients. Also, if customers see how closely you watch your books, they’ll be sure to always make your payment a priority.
5. Make It Easy
Let’s face it: the easier it is to do something, the more likely someone will. Use this philosophy when it comes to clients. If paying you is more convenient, it’s more likely they will. Don’t just accept checks. Look at the many options out there that allow you to accept credit card payments or direct debit. This allows them to pay immediately when receiving your invoice and cuts out the time you have to wait for it to be mailed. Check out Stripe as a great way to process payments.
Although sometimes it seems like it might be more simple just to ask for everything up front, not operating on credit can lose you customers. It just takes a little attention to details initially, but if you focus on streamlining your process, you can make invoicing customers and getting paid as seamless and simple as can be.
You should always seek independent financial advice and thoroughly read terms and conditions relating to any insurance, tax, legal, or financial issue, service, or product. This article is intended as a guide only.