FFN #21: Client Not Paid? Here’s What to Do Next

👩🏼‍⚖️ Contracts Come in Clutch

First things first, standardize your business practices. No matter what, draw up a contract, every job, every client, every time. Your contract should include a description of the work you’re being asked to do, your payment details, late payment fees and payment schedule. Having a contract that includes all of these details helps clients feel confident that you will produce the work they need, as poor behaviour can go both ways. When writing out your contract decide how you would like to take payment, majority of freelancers ask for at least 50% as a down payment before starting a project or collecting the balance before handing over services to the client. If you haven’t yet got a contract, you can find templates at The Freelance Shop.

🎬 Don’t Hesitate to Follow Up  

Be sure to invoice your clients on time and don’t be afraid to follow up on any non-payments immediately. If you get no reply to your follow-up, send another late payment notice detailed with your late payment fees and a date that you will be following up with legal action. In your area’s statutory limits, pursue non-payment in small claims court, or work with a collection agency or mediator. You don’t have to have a lawyer on the books, but it’s a good idea to have a referral on hand just in case. Try to find lawyers who specialize in business contracts, local lawyers are especially useful as they will understand your rights in your local area.

👑 Preparation is Queen

Hindsight is a wonderful thing - when some clients don’t pay, you can often look back and see the sea of red flags. Before you begin working with someone it’s a good idea to do a little research, just as you would your friend’s latest partner. How established is the business? If it is a small new business, adjust your payment terms so that you receive the full payment upfront or at least 50% of the invoice before starting the work. If it is a more established business, how are there reviews? Have they worked with independent contractors before? Put your business hat on, are they bringing in revenue to sustain paying you for the project? Do they have an accountant or software in place? If you’re wary you can implement payment as you complete stages of your work, this will help you test the waters and get a feel for how well they meet payment deadlines. As you begin to build trust you can change your payment deadlines or keep them the same to protect yourself. Remember, having a chunky savings buffer can help you alleviate the stress of deadbeat clients not paying you on time. Protecting your peace and minimising stress is crucial while operating your small business.

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