While economic cutbacks may have benefited many freelancers there is one consequence that is not so welcome — when your client has a cash flow crunch and can’t pay you. What do you do in a case like this? Here are some ways to work out your next course of action.
Need to chase payment from your writing client?
Are you sure the client can’t pay?
Make sure that it really is a case of inability to pay. Some clients are just forgetful and your invoice may be languishing in an inbox or in-tray somewhere. A friendly e-mail reminder ought to do the trick if your invoice has slipped off the radar, and it’s the first option to try before moving to tougher measures.
Is the client new?
If a new client fails to pay up, then you can cut your losses without too many regrets. Freelancers should always take a deposit from new clients. This is part of establishing a relationship of trust and will make sure that your client won’t disappear and leave you out of pocket.
How much are you owed?
If the amount is a small one, you might be able to let it ride for a while. If there’s no chance of you ever receiving payment, then perhaps it’s best to write it off and move on. This is not an option that I like as my view is that if I work for the money I should get paid. However, sometimes the amount you are chasing is less than the amount you would make if you took on a new client instead. Do a cost-benefit analysis and work out whether chasing payment is worth your while.
Is the client established?
If you have had a relationship with a client for a while, then that’s where it gets tough. One option is to continue to work while hoping that things will improve. The downside of this option is that within a short time you could be out by thousands of dollars and the prospect of getting paid may be no nearer.
Another option is to explain to the client that you can’t continue to work until at least some of the balance owed is paid. If your client is holding out on you, this might work, but if the client really has no money, then this option won’t help you get paid. In fact, depending on the business your client is in, your failure to deliver content could kill any chance the client has of making money and being able to pay you.
Set up a payment plan
Perhaps your client will be open to staging payments so that you get some of what you are owed. An initial payment as a show of good faith might help you feel better about continuing to work. This is a good option when you want to retain the client relationship and the client has always paid up on time in the past.
Legal options
If you are completely ready to write off the client relationship then you can consider suing the client for the amount owed. This means burning your bridges, as there won’t be any trust after taking this step. You may not even get paid, though you might get a legal judgment that says the client has to pay you once money comes in. And don’t forget that a protracted legal battle may cost more than you are owed. As a first step, consider naming and shaming in a bid to get the money owed to you.
What I’ve tried
In the past my solution has been to stop work on the client’s project until I receive payment. That worked well when I had a lot of clients paying small amounts. However, now that I have fewer clients who pay larger amounts, that’s not such a great option. In some cases, it might be better to take a long view and keep the client relationship going. The only trouble with that is that if you have more than one client like that, your own financial stability is seriously threatened.
Another option I’ve tried has been to reduce the work I take from any one client, so that my client portfolio is better balanced. Unless I have very bad luck, I should get paid on time most of the time.
Which option is right?
To be honest, no option is exactly right. The choice you make will depend on the client’s history with you (if the client has always paid on time but is having a temporary difficulty then you can afford to be understanding provided there is an end date), and how much money is owed.
How have you handled this situation in the past?
(Photo: shaghaghi)
Article by Sharon Hurley Hall
Sharon Hurley Hall has been mentoring writers here at Get Paid To Write Online since 2005 to help them improve and build sustainable and successful writing careers. Check me out on sharonhh.com. Feel free to connect with me online on Google+.
Sharon has written 653 awesome articles for us at Get Paid to Write Online
Twitter: @SHurleyHall | Facebook | Google+ | Blog → Writing Portfolio
{ 11 comments }
I think that the route you should take in respect of non-paying clients depends heavily upon how much money you are owed and how much you trust the client.
For example, I have a client that pays me a small amount on a regular basis. On occasion, they do not pay within the agreed timescale of the work being completed. Do I moan or kick up a fuss? Nope – a short, polite e-mail usually does the trick.
Similarly, I have been working with a small business for several years and they always pay well within the agreed timescale after the invoice has been sent. There has been one or two instances when payment hasn’t been made straight away, but again, a short e-mail was all that was required.
It must be noted that I trust these clients a lot, purely for the fact that I have worked with them both for a long time. If they were new, however, I feel I would probably react differently (at least if the initial e-mail didn’t yield any progress).
.-= Dan Smith´s last blog ..Make A Living Writing with one easy blog =-.
Twitter: shurleyhall
February 21, 2010 at 19:16
You’re right, Dan; trust is a key factor. Most of the time, with an established client, friendly reminders do the trick. I have had a couple of cases where people I’d been dealing with for years suddenly went AWOL because of their personal issues, and I had to resort to stronger measures to get paid. I prefer not to go that route if I can avoid it.
Excellent post, Sharon.
I have been in your shoes, for sure. In fact I have a scenario at the moment where a client has owed money for months but previously had been an excellent and on-time payer for 2 years. I wholeheartedly agree with your approach of analysing each situation.
I had one client where I had to simply move to pre-paid only because of the risk and frustration. The client I’m dealing with now I’m being more understanding with because of the circumstances and their past track record.
Taking deposits for new clients is definitely the smart way to go.
.-= Dana´s last blog ..5 Steps to Help Writers to Develop An Online Presence (And Attract Clients) =-.
Twitter: shurleyhall
February 22, 2010 at 09:12
Thanks for sharing your experience, Dana. I also had one client where I moved to asking for payment up front, and occasionally I have clients who pay up front in order to be sure they secure my writing services. Most clients, though, fall right in the middle.
I hate these kinds of scenarios, but it come with the freelance territory. I now even charge potential clients for initial consultation, since I was eating up a lot of my time explaining what I could do for them and then they were taking that information to a cheaper provider. It’s only a small fee, but they get great value and I get to know how serious they are about paying for quality work.
.-= Angela´s last blog ..Interview with Margaret Atwood =-.
Twitter: shurleyhall
February 22, 2010 at 09:15
Deposits and consultation fees are great ways to assess a potential client relationship, Angela. I don’t tend to ask for consultation fees unless potential clients need to take up a lot of my time. However, if a client wants me to do trial work, I charge for it.
As difficult as it can be to take “stronger measures”, I think it’s important to remember that as long as you keep records of the work carried out, how much you were / are expecting to be paid and the timescales, there are legal processes in place to help you receive any monies owed.
I’m not too savvy on US law, but over in the UK we have the Small Claims Court, where anything under £500 (I believe) can be settled without having to go through any major court battle.
Hopefully it will never be needed, but it’s there should the need arise.
.-= Dan Smith´s last blog ..Make A Living Writing with one easy blog =-.
Twitter: shurleyhall
February 22, 2010 at 09:16
I’m not too sure of the procedure in the US and Canada either, Dan. I was in fact thinking of the Small Claims Court when I wrote that, though of course, you then have to make sure you don’t let outstanding sums ride for too long (otherwise it won’t be a small claim any more).
Exactly.
I’d actually be interested to hear from anyone who has took a client to court and received the money owed to them, particularly those that couldn’t be settled in a Small Claims Court (or the US / Canadian equivalent).
It’s not a scenario any of us want to be involved in, but it’s a very interesting subject!
.-= Dan Smith´s last blog ..Make A Living Writing with one easy blog =-.
I have a client who has not paid for service completed ($4,600) and has now decided to go with another designer and stop payment on the one check that he has sent me. I have noticed that the slider images being used on the new site are ones that I had created. Would I have an legal options as far as getting my money? We did not have an official contract per se, but did have an agreement outlined via our email communications.
Thanks for your help!
Lilly,
Generally speaking, if one person has requested a service and the service provider has agreed to provide it to them, irrelevant of whether it’s been scribbled down on a napkin, drafted up in a traditional paper contract or via e-mail, it’s legally binding.
Although there are some instances where a paper contract is a must – accompanied by a signature – I’m pretty certain that a work contract isn’t one of them.
If I were you, I’d first contact the client and explain that as you both exchanged e-mails, a legally binding contract was drawn up. However, you understand that the work wasn’t completed in full (correct me if I’m wrong here) and therefore that the full amount – $4,600 – would not be a true representation of the final amount due.
I’d then work out the value of the work you actually carried out and requesting this amount of money, asking for a reply from them within 7 days.
Once the 7 days has passed – assuming you’ve had no reply – I would send another e-mail explaining the situation once more and giving them a final opportunity to provide the settlement figure. Make it clear that if no reply is had within 7 days, you’ll be taking legal action.
From here, if no reply is received, I’d speak to a local lawyer. Most won’t charge for the first hour’s consultation, so it shouldn’t be overly expensive (and if it does go past the first hour, chances are it means that there’s a case worth following, so although you’ll pay extra to the lawyer, you’re likely to recoup a few thousand dollars back from your client).
Please note that I’m not a legal advisor in any way, shape or form. All of the information I’ve provided is from personal experience or can simply be found on the internet.
I hope this helps, Lilly. If I can help out in any other way, please just let me know.
Dan Smith wants you to read What Made You Want To Go Freelance