One of the biggest drags of being a freelancer is on time payments, if not getting payed at all. How to deal with unreliable clients reluctant to fulfill their obligations? Let’s take a look at some effective strategies.
You get contacted, you work for your client, you get p… Hey, where’s my money? This might sound familiar, more than you’d probably like to admit, and there is no need to tell you how it works: you know better than I do! Unfortunately this is a common situation, especially with you are dealing with clients as a freelancer or self-employed.
If you already are in this unpleasant situation when a client won’t pay, I’m going to suggest some strategies you can follow to speed up the payment and make sure the money reaches your bank account.
Let’s outline the case: you have previously agreed with your client on your fees, you’ve finished your work and the payment deadline went by without receiving any transaction. The first thing you need to do is quite obvious but still necessary. Just make sure you have previously sent your invoice to your client with all the correct information. If it’s a green light, it’s time to move on to the next step and start claiming whats yours.
1. Send that email!
First of all we have to give him the benefit of the doubt, a missed payment could just be due to a mistake or an oversight. So turn on your computer, get your fingertips ready and write a friendly email: manners are important, even though you might be mad at your client always keep the tone friendly and pleasant. Make sure you use ‘please, ‘thank you’ and other polite forms. Don’t overdo it though, you don’t want to sound submissive or flattering.
Something like this could do:
I hope you are doing well.
I’m writing to you about the XXX project we’ve worked on. According to my calendar, payment was due yesterday. I have sent you the invoice XXXX days ago, could you please confirm you have received it?
Please let me know if you have any questions and if there is any additional information you may need from me in order to proceed with the payment.
Once you’ve pressed the ‘send’ button it’s time to wait. How long? That’s up to you. You are to the one who knows the client and his response time. A few hours, one or two days or even a week: there is no strict time frame. Choice is yours, just set a reminder and write another email if you haven’t got a reply by then.
One important tip here: automate the process and keep your work!
I personally have the tendency to classify and keep all the work I’ve done, no matter what it is. Sometimes it’s just useless obsession, but in many cases it has proven to be quite useful, and this is one of them. Saving emails you have been sending to your clients and making templates out of them that you will be able to reuse in the future is something you will be glad to have done.
You can have 2, 3 or even 5 email templates: one reminding the payment is due in a week, one for the day after the due date, another one for the week after that, the last friendly reminder and the getting-nasty email. It can be also in
To help you with this tasks there are a couple of tools I would recommend you to use:
- Free Agent is a great tool that can help you out in the whole billing process. Among other things, it lets you automate billing emails, you write them and then it sends them according to the schedule you have set.
- If you use Gmail, Right Inbox is a useful plugin that can speed up recurring emails.
- A Google Spreadsheet (or Excel file in Onedrive) where you can collect all the email templates.
2. Is there anybody out there?
You’ve sent a couple of emails but still no signs of the transaction you were waiting for. It’s time to speak directly to your client and give him a phone call. Talking to someone is often just what it takes to get a direct answer to what you were looking for. If he’s willing to pay he/her will probably apologize for the delay and promise to fix it straight away, or might give you an excuse and a new due date: in any case, you will get a clearer understanding of what’s going on and you can start planning your next action.
It might even happen what it happened to me, when I got hanged up on and even blocked: I immediately knew I had to move forward and undertake some more effective actions.
3. Time to set up a calendar and not give in
Do you remember that kid at school who was always moaning, asking for more, and most of the time got what he wanted? That’s the key.
Many of us aren’t like that – me first – but if you want to get what’s yours, sometimes you need to force yourself into someone you naturally aren’t, because being persistent is essential here. There’s no need to write an email or call every day, but be dedicated and don’t let your self down. Don’t stop. Use a calendar you can sync on your mobile and computer (something like Google Calendar should do), set reminders and periodically call or send an email. If your emails don’t get a reply, write a new one. If your phone calls don’t get through, call again. Try changing to a different address or phone number if you can.
But don’t give up, on the other side they’re just waiting for you to stop insisting. That would equal giving in, but it’s your right to get paid, you owe your self this.
4. Late fees apply
Another tactic you can use in your emails is billing a late fee. According to the European Union’s directive “enterprises have to pay their invoices within 60 days, unless they expressly agree otherwise and provided it is not grossly unfair”, while in the UK payment is late after 30 days, as the Government Digital Service states. However, both agree that the interest you should charge another business for paying late is at least 8% plus the current central’s bank base rate (0.5% at the moment). On top of that, the European Union adds a minimum of €40 as compensation for recovery costs.
Time to do your maths.
Being honest, it’s very rare that someone will actually pay the extra money you are asking him for the delay. But, a part from being in your rights, that’s not our main goal: we just want to get payed and charging an interest can help us achieve our objective. Increasing the bill could have the effect of projecting in our client’s mind what a 6-months-late-fee could look like and spur him to pay his debt.
You might want to look at this from your perspective. Which invoices are you most likely to pay first, the ones that have interests depending on their due date or bills that don’t have any consequences if not settled on time? Adding a late fee gives priority to your invoices and adds a sense of urgency.
5. Time to threaten and use legal reinforcement
Suing is the last resort, and never recommended, we all know that. However, the keywords legal action and court could be sound strong enough in our clients head to stop procrastinating payment. Here it’s a matter of knowing how far you want to go or of knowing how to bluff, just like a poker hand.
If you are willing to go all the way through the legal action, then just go for it. Write an email (or even better, a letter) letting them know that you have already spoken to a lawyer and that your next step will be suing them. If not, this might be your last chance, so think it through before using it: if this doesn’t reach the desired effect, you could then lose all credibility. So make sure you have gone through all the other possibilities first, even number 6.
There is only one more step you can take once you have threatened legal action and didn’t get any answer. If you know any copyright patent lawyer, or are willing to pay one, you can get him to write a letter you can send to the debtor, like Darlena Cunha explains in this article.
6. Go social!
Why social go after threatening legal action? For many companies social shaming and bad reviews can be even worse than legal action. Most of the time the first are public and available to anyone, while the second will stay within the two parts. Most social interactions are available to anyone, and depending on how insistent and frequent in posting you are, they can be a real pain for their reputation. So yes, shaming the company on social networks can be much worse from their perspective as it can damage their future business.
This is why you can consider looking for their social accounts and start writing on them. The first step I recommend is a Twitter mention as it’s a measure ‘less public’ than others. You could write something like this to start with ‘@companyname payment for the video (link) I made for you was due more than 30 days ago, when can I expect it?’.
Next step can be posting directly on their Facebook wall asking the same question or writing comments on their updates. In case they don’t have any social accounts, or they are hardly reachable, there is always the Google Maps review option.
Just remember to keep it professional as your goal is still to get payed. Plus, there is your name attached to those comments, so you don’t want to sound to shaming and compromise you future working possibilities.
7. To sue or not to sue?
This is your call, as we were saying above. Still, it’s something I would personally not recommend unless we are talking about an important sum of money. But that’s me, and I understand that when you suffer wrong you might want to make things right, and a lawsuit can seem a right choice.
In any case, look at the bright side. You can take this as a life experience that will certainly help you recognize trustful clients in the future. Even better: next time you reach an agreement with a client you can prepare in advance for this situation by following our tips on how make sure your client pays his bills.