How To Make Sure You Get Paid (Part 1)You've completed a client project. And now you're waiting… waiting… and waiting to get paid.
Not a great feeling.
But you can avoid payment delays (and the lost sleep that goes with it) by taking the proper steps up front to ensure that your invoices to clients get paid promptly.
Here are some ideas:
1. Set Clear Expectations Up Front
In your fee agreement, make it clear exactly when your invoice will be sent and when payment is due.
In my agreements, I explain that my invoice is sent one week after I submit the copy and that payment is due in 30 days.
2. Get the Name of the "Accounts Payable" Contact
Ask your client who in the accounting department takes care of "accounts payable". This is the person responsible for vetting and paying invoices.
You want to make friends with the accounts payable person! He or she will be able to give you the status of your invoice and tell you when to expect payment. In certain circumstances, he or she can speed things up for you, too.
3. Ask For Part of Your Fee Up Front
It's standard practice in the creative freelancing world to get some of your fee up front; usually 50%.
Now I admit, for clients that I trust and have dealt with for years, I waive that requirement. But for new clients, I always ask for that 50% payment. You should, too.
A simple way to word it in your agreement is: "The payment schedule is 50% now and 50% upon completion of the project."
If a new client balks at paying part of your fee up front, that's a red flag. Think twice about taking on that project!
4. Try the 10% Technique
I learned this technique in Alan Wiess' book, Million Dollar Consulting. And it's amazing how often it works!
You simply put a clause in your agreement that states, "A 10% discount can be obtained when paying the full quoted project fee in advance."
I've had many clients pay my entire fee up front to get that 10% savings. In fact, some corporate accounting departments are required to take advantage of all discount opportunities from vendors.
5. Trust Your Gut
If you get a sense that a potential new client is going to stiff you for payment, don't take the project!
Early in my career, I had a meeting with a potential new client. Just as I was about to take on the project, he said, "Don't worry about being paid. I wouldn't think of not paying a freelancer if I was 100% satisfied with his work."
Oh-oh. I didn't like the sound of that. At the time, I needed the work. But I walked away. And I'm glad I did.
6. Look Like a Real Business
If a company sees you as a fly-by-night freelancer, it may not pay you as promptly as it would a real business. That's not fair, but does happen.
So make the right impression by making your invoices look "Fortune 500 professional".
There are plenty of excellent invoice templates, software and online invoicing services that will enable you to do this. I've heard that FreshBooks is very good. QuickBooks, too.
7. Make It Easy For Clients To Pay You
Send your invoices promptly. (Remarkably, some freelancers don't!) Make sure your invoice includes all the information the client needs, such as the project name, reference number, purchase order numbers, etc.
Also, accept PayPal and credit cards. You can do that simply by setting up a PayPal merchant account -- which is free.
8. Follow Up the First Day Your Invoice Is Overdue
As soon as your invoice is due -- say, 31 days after you've sent it -- call your client or the accounts payable contact. Ask about the status of the invoice and when you can expect to receive payment. Don't settle for vague assurances like, "A check will be cut in a couple of weeks." Get an exact date. Then follow up again a few days before that date to make sure your check gets processed and mailed.
9. Hold Back Creative Rights
In your agreement, state that the creative rights to your work automatically goes to the client once the project fee is paid.
So… if your project fee is not paid, you still own the rights. And, technically, the client can't use your copy without your permission.
This technique doesn't guarantee you'll get paid. But it is something you can use as leverage when an invoice become long overdue.
Years ago, my invoice to an ad agency client went more than six months overdue. I finally reminded them that I still owned the creative rights to the copy and may have to notify their client to stop using my material. (A series of brochures.) It was hardball. But it worked. A few days later, I got my check.
So those are some ideas on how to get paid promptly. But what if the worst happens? You call, email, call again, but don't get your check? In Part 2 of this series, I'll explain a step-by-step strategy that works well.
How To Make Sure You Get Paid (Part 2)By Steve Slaunwhite
In part 1 of this series, I explained what to do upfront to make sure you get paid promptly for the freelance work you do. If you follow those tips, you'll find that your check will be "in the mail" (or the digital equivalent of that happy event) much more often.
But no matter how careful you are, there may instances when a client is frustratingly slow to pay your invoice or, worse, refuses to pay at all.
Not a pleasant experience.
So, in those circumstances, how do you get your money?
Here are some tips that will help.
1. Follow Up the First Day Your Invoice Is Overdue
This is a repeat from part 1 of this article, but it's worth mentioning again here…
As soon as your invoice is due -- say, 31 days after you've sent it -- call your client or the accounts payable contact. Ask about the status of the invoice and when you can expect to receive payment.
And don't settle for vague assurances like, "A check will be cut in a couple of weeks." Get an exact date.
2. Don't Settle for Excuses.
When you follow-up on an overdue invoice, your client may cite an internal problem as the reason why payment has not been sent. For example:
"We're having a temporary cash flow problem."
"We can't pay you yet because our client hasn't paid us."
"We've installed a new accounting software and are experiencing some technical glitches."
The excuse may be valid. Or it may be a stalling tactic. Regardless, you have a right to know when your invoice will be paid. So don't reply meekly with, "Oh, I'm sorry to hear that. I'll call back in a couple of weeks." Instead say confidently, "I understand how that might delay payment a few days. Can I expect to receive a check by next Tuesday?"
3. Collect the Check in Person
When an invoice is seriously overdue, arrange to pick up the check in person. That sends two important messages to your client. One, that you're serious about getting paid. And, two, that they need to have your check ready when you arrive.
You can put it to your client this way: "The check will be cut next Friday? That's great. I'll stop by and pick it up. 3:00 p.m. okay with you?"
Or use this variation if the client is not local: "The check will be cut next Friday? That's great. I'll arrange for FedEx to pick it up that afternoon after 3:00 p.m. Okay with you?"
4. When the Client Doesn't Respond
In some cases, you might find that your calls and emails are ignored by your client. Not a good sign.
If your client is local, drop by and enquire about the overdue invoice personally. This tactic almost always gets a response. It's difficult to ignore you when you're standing in the lobby.
If the client is not local, send a letter by courier or registered mail.
Either way, ask politely but firmly exactly when your overdue invoice will be paid. Then arrange to pick up the check on that day.
5. When All Else Fails
What do you do when the worse happens? Months and months go by and, despite your best efforts, the client still hasn't paid your invoice?
You have a couple of options: A collections agency, or small claims court.
A collections agency will attempt to collect on the overdue invoice on your behalf -- usually for a 50% fee. So the most you can expect to get is half the money you were owed. But that's infinitely better than nothing.
Another option is small claims court. It's designed for the do-it-yourselfer, so you can usually file a claim without a lawyer. The process, however, can be long and time-consuming. Still, it's satisfying to get your "day in court" and, if your claim is justified, you stand a good chance of getting a judgment against your client for the full amount owed.
So those are some good ideas for collecting on an overdue invoice. But your best strategy for getting paid is to make sure you do the right things upfront, as described in part 1 of this series. You'll save yourself a lot of grief. And you'll sleep better, too.
1. Make of list of 3 things you can do to ensure you get paid promptly by your clients.
(Ex. "I'll start a policy of requiring new clients to pay 50% of my quoted project fee upfront.")
2. Create a template by writing a friendly but firm email requesting the status of an outstanding invoice.
Steve Slaunwhite coaches freelancers in how to find a niche, attract great clients, and build a dream business. For more information, visit www.greatclientsonly.com
Source: International Freelancers Academy