Oh, we’re so sorry to hear this. Non-payers are the pits.
That saying, “I’m rich in unpaid invoices, not in cash”, rings none truer than for self-employed freelancers working with cheeky clients. The first thing to do is to take a step back and breathe.
This situation isn’t great, but what can be learnt from it?
Contracts matter.
They protect us and give us remit in the event that clients don’t pay for the services we have provided them. So, if you have other clients on the go, make sure you prepare a proper service agreement, have it backdated to when you started work and issue it to them ASAP. Apologise for the lateness but remind them that it’s a prerequisite of working with you on an ongoing basis.
For the client in particular who is not paying, it’s always a good idea to give them the benefit of the doubt up front.
Have you spoken to them?
Could it be that the accounts manager is on leave? Perhaps there’s been some big news in your contact’s life, and your invoices have taken a backseat to that emergency? Send an email reminding them of the lateness, and pick up the phone to speak with them directly if there’s no response. You may be surprised at what they have to say and how quickly they’ll jump on it for you. Then – issue them a contract immediately too.
Now, assuming you’ve done all of this and still nothing, it’s in your best interests to stop working for them right there and then.
Follow up with another email politely explaining that they are three weeks behind on their invoices and that no further work can be completed until full payment is made and remittance advice emailed to show it. A paper trail is important here because if there’s no reply, debt collection may be your best bet.
Note: Without a signed contract that allows it, it’s illegal to threaten a late fee, so don’t do that.
Debt collection can be a very quick and hands-off way to recoup an outstanding payment. Many agencies will give you a relatively accurate idea of whether you have a chance of getting it back and will outline their fees in the case you do. Sometimes it can be hefty, so shop around, but seeing some of the cash over none of it is better if cash flow is a problem for you.
You may lose the client in this instance, but really, if they consider paying you for your work as an optional requirement – then do you really want them anyway?
Always send your naughty client a polite email before engaging a debt collector, letting them know of your plans to hire one in case this prompts them to avoid the hassle of having their financial records tarnished.
We’ve put together even more debt collection tips and templates for our members here.
If the debt collection route is unsuccessful for any reason, one final option is to find the brand manager for the organisation on LinkedIn and send them a polite email, with an overview of what has occurred. They are responsible for protecting the business’s reputation and may sign off on this invoice being paid in order to ensure this doesn’t pop up later as a bit of bad PR.
Always be respectful, factual and courteous – never threatening – in these communication attempts.
Always be respectful, factual and courteous – never threatening – in these communication attempts. If this doesn’t work either, then, unfortunately, bar bringing up a civil lawsuit, you will have to accept defeat, cut your losses (and them) and walk away.
One final thought – consider putting all clients (or at least those terrible at paying) on prepaid retainers. You can tell them that you’ve had a few new clients come on board and, to help you guarantee your availability, you’re moving to a weekly (or monthly) prepaid retainer arrangement effective from next month (give them warning, so they have time to prepare).
Good luck, and we hope your pockets are filled with the cash you are rightfully owed soon.