Client Not Paying? Freelancers Can Still Take Action
Freelancers and home business-owners do have options when it comes to non-payment by clients. Here are the professional ways to deal with the problem and try to get your earnings back.
First of all, do you have a written contract and is it signed by the client? This should detail your payment structure listing how and when you are to be paid. It should also mention your late fees. If you haven’t already done so, invoice your client a second time and refer to the terms and conditions in the contract. You can use an online accounting tool to send automatic payment reminders to your customers when invoices are due. Facing late fees may prompt the client into paying.
Having a contract can help protect you if you decide to take legal action against the client. But you may not even get as far as the small claims court. Sometimes merely filing a claim can spur the client into paying.
The softly-softly approach might not be your style but try to remain civil with your client. Staying on good term means you don’t risk jeopardising any future contracts. This may just be a blip and they may be having a hard time with their own business. If you know your client well, assess if this seems to be a short-term problem.
Have a little patience and try to negotiate with them. Are you financially comfortable enough that you can offer the client a payment plan? If it seems to be a deep-rooted problem, then you need to explore other options.
Send your client a detailed outline of the work you’ve completed along with the invoice. Keeping a timeline of completed projects will provide you with back-up if you need evidence of the work involved. If you feel confident enough, send your client a polite notice 7-10 days before payment is due and ask them to acknowledge this.
Make sure you’ve established a well-defined process to chase clients. Have templates ready to send reminders at set intervals. This saves precious time, enabling you to focus on what’s important to you and your business. Stay focused – your client may just be trying to stall the payment or even be testing your firepower. Check your company insurance so you’re sure of your legal cover level if things go wrong.
You can choose to withhold your services until you receive what you’re owed, depending on your payment terms. If the client is refusing the final payment, then you can refuse to deliver. Withholding the service should hopefully prompt the client into action.
Depending on the nature of your work, you could transfer files only once payment has been received. Explain what you’re doing to the client so they are fully aware of the consequences of late payment.