When Is Your Money Not Your Money?
We’ve all been there. You get a job, work for the money and wait to get paid. And wait … and wait … and wait. Even if you have done the sensible thing and got a portion of your money up front, there’s often no guarantee of when the last part will be coming. A couple of recent incidents brought that home to me.
The first one was entirely my fault. Remember when I reviewed GetAFreelancer? I said at the time that the only flaw was the strange extended process for your first withdrawal. What I should also have realised is that my gold membership was set up to automatically renew. So what happened? GAF took my membership renewal and when the time came for the funds to be transferred to Paypal, there wasn’t enough money in the account. So I’ve just had to start the process all over again. Lesson learned.
E-Checks Can Bounce Too
The second incident came when I had to chase a client for payment. This is a client who guarantees to pay within ten days of receiving the work. When I first chased, it had been 40 days or more. I heard nothing for a while, then a few days later I got notification of an e-check for the full amount. I relaxed, prematurely. As I’ve discovered, e-checks can bounce too. And they take a heck of a long time to do it. It took about 10 days for me to get the notification that the client hadn’t had enough funds to cover the e-check. So although I thought I had money, I didn’t – the client still had it and I had diddly.
I fired off an email and the client has just responded with a new payment, and this time it’s not a rubber check. However, he’s still interested in having me write for him. I’m wondering if it’s worth the hassle of having to chase for every payment. It’s not the first time a payment has been late, but it’s the first time a payment has bounced. I’m considering my options. The question is, how many chances do you give before it’s time to fire the client? I’d love to hear your thoughts.
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Get Paid To Write Online by Sharon Hurley Hall is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License. Copyright for posts written by guest authors remains with them.Useful info
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My advice is to not be so hasty in “firing” the client. The way I see it, this is an opportunity to change the terms of the relationship. I suggest telling the client that you will happily continue to work from him/her, but the terms are now full payment in advance. You only start work when the money is securely in your account. If the client does not agree, then they had no intention of being honest anyhow, and you won’t have to be the one to say, “No.” They will have eliminated themselves from your trusted client roster. If the client does agree, then that is the basis of the new relationship and should not be changed. I would not offer to ever go back to the “way things were.”
*ponders* In this particular case I’d probably give the client the benefit of doubt. I’m sure we’ve all been in a situation where the funds we thought we had just weren’t there. I’ve had to return a full shopping trolley when my card didn’t clear at the checkout before which amounts to the same kind of thing.
While the clients tardiness in paying is unacceptable you could have followed up sooner, sent reminder invoices, you can even get away with charging late payment fees (why not? other businesses do it all the time). The client has very little insentive to want to hand over his cash so sometimes it takes some serious prompting.
Since he is interested in hiring you for continued work I would evaluate how valuable the client is to you. Do you enjoy the work he sends your way? Does he pay a fair rate? Are you willing to follow up for payment and take action if he fails to pay again? How highly do you value your time? If he fails to pay would it really be the end of your world?
Althought tardy, the client did rectify the situation. If your business relationship is otherwise friendly perhaps he is worth a second chance?
@ Mark: Good suggestion, thanks. Sometimes it doesn’t pay to be too hasty.
@ Rebecca: This is the third time that I’ve had this situation with this client. The first couple of times I asked those questions and concluded that it made sense to stay. Now I’m wondering. Although non-payment is not the end of the world, it means that I have wasted my time in something unprofitable and I have to spend more time to earn that income elsewhere. I write because I love it, but it’s also how I earn a living. As someone once said to me, when the plumber comes to your home and fixes a leak, you don’t tell him (or her) to come back in 60 days for payment.
Third strike and he’s OUT! Give Mark’s great suggestion a go but if even that doesn’t seem to work then it really is more hassle then it’s worth. Cut your losses and make room in your business life for a new client.
Personally, I believe everyone deserves a second chance, so I would probably give him one more chance. However, I might Google the client first to see if this is something he does often, and if I discover it is… well, I’d let him go based on my research. If nothing came from my search and I did decide to give him a second chance, then I’d place a limit on how much work I’d do for him for a while. I’d do this to keep from running up a large tab that may not be paid or become a hassle again.
This, of course, is my two cents. You do what you feel you have to.
@ Rebecca: That’s my inclination, though I’ll still suggest the pay up front thing.
@ Misti: I’ve done that. After the first and second strikes, I started doing a job, then waiting to be paid before starting a new one, to reduce my exposure. But even that doesn’t seem to be working now.
Hi Sharon,
I think I know the client you’re speaking of as I have had similar problems and am currently wondering how much longer I will stick with it.
Clients who take too long to pay always make me so nervous because I’m afraid they won’t pay up at all. When they don’t . . . Well, I just hate that feeling. Like the suggestion above, I would tell the client I’d continue writing for him as long as payment was prompt/in advance for the rest of the relationship.
Sue, I suspect the company has a cash flow problem. Maybe their clients aren’t paying them. However, there’s a limit to how much leeway one can give.
@lornadoone: That seems to be the consensus. I will see what he says.
Repeated problems are definitely a sign of cash flow problems. I suspect that’s the problem here. Even if a client has the best of intentions, there does come a time when enough is enough. I wouldn’t blame you if you’d reached that point.
Well, I’ve emailed the client, Dana (and everyone) and I’m now waiting for a reply. We’ll see what happens.
I was surprised myself by a client who’s a millionaire and has great integrity and reputation in my town, but he never followed up on the book I wrote for him. It was a long-term project and he paid me a deposit up front, but no longer is interested in my assistance in publishing it. This really surprised me, since he was easy to communicate with during the writing process and understood if I encountered a delay due to other projects.
I have resolved in the future to work with more solid clients, especially government. These government agencies almost always pay on time.
The current economic downturn makes this an even more pressing issue for all us freelancers. I’d like to see more suggestions on how to deal with this, because it’s usually not worth taking someone to small claims court. That’s burning your bridges.
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