It’s easy to talk about the benefits of being a freelancer—setting your own hours, working on projects of your choosing, and being your own boss. But, freelancing isn’t always sunshine and rainbows. Sometimes, you may end up doing work you don’t get paid for, and that sucks.
In some cases, your clients aren’t paying due to a misunderstanding. Maybe your invoice got lost, or perhaps they’re out of town. Regardless of the reason, a client agreement can prevent missed payments, provided your clients are legitimate and intend to pay you in the first place.
How to Make a Simple Payment-Specific Client Agreement
One of the best ways to protect yourself from non-payment is by drafting a contract. Any client who refuses to sign one isn’t a person you want to conduct business with.
Having a signed contract isn’t enough. If you don’t write out your terms carefully, you won’t have recourse to seek legal action. You need to set turns that protect you from non-payment, clients that refuse to pay, and clients that aren’t moved by gentle reminders.
Tip: It’s a good idea to learn how to make fake pay stubs so that you can spot them a mile away. Some clients may give you a pay stub that has amounts that are perfectly rounded ($1000,00 instead of $957.06), contain odd formatting, or “o’s” instead of zeros. Stay vigilant!
Ways to Protect Yourself From Non-Payment
Here are 3 things you can do to protect yourself from late paying or non-payment clients.
Get a Deposit
The deposit doesn’t have to be the entire project amount; it just needs to be something small. Clients that pay your designated deposit are showing an act of good faith. Depending on your industry, you may need your clients to put down a deposit anyway to lock in their spot.
Don’t Pay Upfront
Some of your clients may need you to complete a special project that requires you to spend money. Never pay the expense upfront. Tell the client that they need to pay for the item first. It’s much harder to get your client to pay for an item after the fact.
Define Payment Schedule
A good freelance contract outlines when the freelancer will deliver what and at what point the client will pay. For longer projects, consider adding milestone payments. These partial payments are made when you’ve finished part of the job, giving you a steady source of income.
What to do If a Client Won’t Pay
If your clients won’t pay, it’s time to turn up the heat. Here’s what to do with a non-paying client.
Speak to the Client
Confronting a non-payer is never easy, but it’s a part of being a freelancer. Calmly ask your client why they aren’t paying and how the situation can be solved immediately.
There’s a possibility, however slim, that your invoice was overlooked or misplaced. Give the benefit of the doubt and resend the document stating that payment is due within a week.
Explain You Own Your Work
Until your client pays you in full, you own your work. Explain to the client that if they cease to pay you, they won’t be able to post, duplicate, or sell your work without your permission.
What to do If Reminders Don’t Work
Sometimes, even the kindest reminders don’t get a response. Now you’ll need to be forceful.
If you’ve included penalties as a term for non-payment, you can impose them. If you have an ongoing relationship with the company, state you’ll cease working for them in X number of days.
Be Prepared to Sue
You may have no choice but to sue if they don’t pay. Write a formal letter to your client stating you’ll take them to court in X number of days if they refuse to settle up their invoices.