Dealing With Clients Who Consistently Pay Late
If you spend some time talking with other freelancers or just hanging around on freelance forums you’ll find that one of the top complaints among freelancers is the amount of calling and reminding it takes to get certain clients to pay. In reality, most clients are pretty good about getting contractors paid, but anyone who freelances for long enough will inevitably come across a slippery client or three.
Here are a few tips for getting paid faster in the future. We stop short of discussing debt collectors, because by that stage it’s likely you’re chasing the last payment from a client you won’t work with again. These are tips for making gentle changes to get paid faster by a client you want to continue working with in the future.
Send smaller bills more frequently.
Sometimes smaller businesses balk when you send a bigger bill all at once given the effect it might have on cash flow. Instead of sending one monthly bill, you could try sending four weekly bills or two fortnightly bills. In some cases, such as with larger organizations who depend on many contractors, this may just irritate your client.
Even if the time between invoice submission and payment remains the same, since you are sending in more invoices on a faster timetable, you’ll be funnelled small amounts of money constantly instead of freaking out about the rent while you wait for that big monthly payment.
Maintain your relationship with the client.
It’s important to maintain your relationship with the client and keep them up-to-date with what you’re doing for them. If they know you’ve been on the job and you’ve developed a rapport with your client you’re much more likely to get paid faster than if you’ve developed an air of distance. It also helps to figure out who the financial controller is in larger organizations and get to know them so you can bypass the bureaucracy when needed.
Have a contract.
There are numerous benefits to having a contract that go far beyond the issue of payment, but a contract’s most useful feature is that it sets expectations in terms of payment, how payment will be done and how promptly it should be made. It also provides validation of the financial agreement in the event you need to pursue legal remedies to missed payments.
A tried and true way to get your clients to pay before the deadline comes up is to include an interest charge in your terms. For each month the bill is late, you add a percentage on to the bill. Most of the time these rates are between 1 and 3 percent, but if you have a client who is perpetually late you could consider heftier penalties, though I’d not push it beyond 10%.
Give a specific deadline.
Don’t make the mistake of issuing an invoice that doesn’t have a deadline. “Please pay within 30 days” puts the reader of your invoice on a timer, whereas an invoice that’s simply payable on receipt doesn’t — even though it’s technically more urgent.
Use human terms.
Too many invoices use terms that sit somewhere between jargon and mathematical equations rather than personal communication. Remember that your bill will be paid by a human, not a robot. When you use readable sentences like “Please pay within 30 days” instead of “Net 30 + 3% interest/month overdue” you are more likely to get paid within 30 days.
It’s partially a connection thing — you empathize with other people, but not jargon, and it’s simply easier to read simpler sentences.
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