Facing Payment Issues with a Freelance Client? Take Action with these 8 Effective Steps to Retrieve Your Unpaid Invoices.
Late payments from freelance clients can be challenging and frustrating, and I have personally experienced this situation. If you’re currently facing a non-paying freelance client and unsure of your next course of action, I’m here to assist. Discover effective solutions for dealing with clients who don’t pay on time.
Strategies for Managing Non-Paying Freelance Clients: What You Need to Know
Discover Practical Measures to Receive Your Outstanding Payment: Follow These Steps and Additional Tips to Ensure You Get Paid Your Due Amount.
Step 1: Set Clear Rules and Expectations from the Start
Having worked as a full-time freelance writer for several years, I know how crucial it is to build a financial buffer for lean periods or when clients fail to make payments on time. Although I was fortunate enough to have prepared for such circumstances, what if it had put me in a financial crisis?
Imagine every client you work with being late or unwilling to pay you at all. It would lead to a loss of work, and clients would treat you however they wanted. That is why it is crucial to teach your clients how to respect you as a professional.
Remember, as a freelancer, you are in charge of your business. Do not allow clients to take advantage of you, not pay for your services, or act unethically in any way.
Even if it means sacrificing some earnings, it is often critical to set professional boundaries for both yourself and your clients. Furthermore, do not continue to work for clients who have not yet paid you. If you do not pay your electricity bill, the service is cut off, right? The same principle applies in this situation.
Step 2: Identify the Reasons for Non-Payment
I understand that it’s easy to make mistakes, such as mixing up numbers, losing paperwork, or miscommunicating critical information. Sometimes, clients may not intentionally deceive you when they claim that the payment is on its way.
It’s possible that checks get misplaced, or the bank details were incorrectly entered, or they simply forgot about the payment. It’s crucial to identify whether the cause of non-payment is a legitimate issue or just a misunderstanding or technical problem.
Many businesses use payment processing services like WePay or Gusto, so the issue may be with the payment processor rather than the client. Your responsibility is to stay composed and determine the reason behind the non-payment, then take steps to address the issue.
Step 3: Explore All Possible Options
Have you exhausted all possible options to reach the people in charge or the accounting department?
You can try calling their office or reaching out to friends or colleagues who have worked with this client to inquire about their payment experience. You can also conduct an online search and locate the client’s Twitter handle to contact their social team.
Make sure that you have done thorough research and have explored all avenues of getting the client’s attention.
Some companies are so disorganized that they lack internal communication and have no idea what’s going on. For example, I once asked a friend who had recommended me to the same client if she received payment, and she confirmed that she had received full payment with no issues.
This made me realize that the issue was not the client’s unwillingness to pay, but rather technical problems and miscommunication within their company. Therefore, I followed up with the freelance client and addressed the root cause of the problem.
Step 4: Send a Formal Warning Email
If you have exhausted all other options and still have not received payment, consider sending a warning email to your non-paying client.
This will not only demonstrate that you are serious about resolving the issue, but it will also provide written evidence that you have given them sufficient time to address the matter.
In your email, be sure to detail all of the methods you have used to contact them, the specific dates, their initial promise to pay when you began the project, any relevant information from your contract, and a notice that further legal action may be taken if the matter is not resolved.
Interestingly enough, after I sent an email like this, I received a response from my contact within three hours and the money was in my bank account within four days. Imagine that!
Step 5: Send a letter of demand through the mail
At times, it’s necessary to demonstrate your commitment to receiving payment to your clients.
One effective course of action is to send a letter of demand, which serves as an official document of your request for payment. It’s important to send the letter via mail with a return receipt requested.
Receiving a letter of demand that outlines the legal consequences can be sufficient in motivating a client to make the payment.
However, if this approach proves unsuccessful, it may be necessary to seek legal assistance from a lawyer.
Step 6: Engage the services of a lawyer to provide assistance
By now, you may have taken the initial steps to get your client to pay your invoice. If you have been successful, congratulations! However, if you haven’t received payment yet, it may be time to consider seeking legal assistance.
While hiring a lawyer can be costly, it may be worth it if you are owed a significant amount of money from a big freelance job.
To begin, you can have a lawyer draft a letter on your behalf. The letter should state that you intend to escalate the matter and impose an X% late-payment fee on the invoice each month. If your freelance contract does not already include a late-payment fee, you should add it.
Once the letter is written, mail it through traditional mail with a return receipt requested. This will ensure that the recipient receives the letter, and you will have proof of delivery. In the letter, notify the recipient that they are [number] days overdue on their payment, and as per the contract, they owe you [amount due]. Additionally, let them know that if you do not receive payment within [a certain amount of time], you will take further legal action.
Remember to keep the receipt once the recipient signs for the letter. This will serve as evidence that they have received your notice.
Step 7: Demonstrate to the client that you are serious and committed
Are you having trouble getting a client to pay up? It may be time to follow through with your threats. Not only will it provide a cathartic release for your frustration, but it’s also your responsibility to protect your fellow freelancers from being taken advantage of by this client.
In my case, this means utilizing social media platforms like Twitter, Facebook groups, and my blog to alert my community. I call out the client or company by name and advise other freelancers to avoid working with them or using their services.
Keep in mind that this isn’t about being vindictive, and you should still be professional with your language. However, it’s important to let clients know that mistreating business owners is unacceptable.
Step 8: One option to explore is to take the matter to Small Claims Court
It’s important to recognize that there may come a point where you must decide between giving up on receiving payment or pursuing the matter through small claims court.
If the amount of money in question is small, it may not be worth your time to pursue legal action. Instead, you could focus your efforts on working with clients who are willing to pay you for your services.
However, it’s essential to consider the principle of the matter, as well as the potential amount of payment and any legal fees that may be incurred. In some cases, it may be worthwhile to use the experience to educate both yourself and your client on proper business practices in freelancing.
The specifics of representing yourself, the amount of recoverable funds, and the length of the lawsuit will vary depending on your location. Therefore, it’s crucial to research the small claims court policies in your area and consult your state’s official government website for more information.
You may want to read: Effective Follow-Up Strategies: 5 Ways to Stay in Touch Without Being Overbearing