Freelancers: How to Deal With Slow-Paying Clients
Slow-Paying Clients – Advice and Options for Freelancers
Unedited Guest Article by Brian Bass
It’s the freelance circle of life — you pitch the job, you get the job, you do the job, you bill the job, and you get paid for the job. Right? If only it worked that easily. When any one piece of the circle comes apart, everything after it suffers. But when the last part of the circle, getting paid, comes apart, the rest of your life suffers.
So how do you collect from a slow-paying client? According to a January 22, 2009 article in the Wall Street Journal, some companies are using a sweet-talk approach, which ranges from personal phone calls to gift baskets. When things get really bad, some companies turn to a strong-arm approach. But hiring a collection company or an attorney can backfire by alienating them and destroying the relationship.
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According to the WSJ article, you can increase your chances of being paid by taking several relatively easy steps:
- Develop multiple contacts within your client’s organization, and build good relationships with those contacts, so you have more people to approach when a payment becomes late.
- Expand clients’ payment options, such as accepting credit cards, which may be more convenient.
- Email invoices instead of mailing them, so they arrive sooner.
- Follow up within a day or two of payment becoming late.
Slow payment can hit small businesses hard. That goes particularly for freelance businesses, for which there is a direct link between money in the bank and food on the table. But what can you do when collection goes from bad to worse?
Lots of people on freelance list serves say they’d love to call their clients out on the carpet in some public way to shame them into paying up, and there’s quite an active ethical and legal debate swirling around this subject. According to a December 15, 2008 article in The Star Ledger, one person has done just that. He started a website called “The Deadbeat List.” Posting a deadbeat client on the website costs $9.99, which includes a postcard that is sent to the deadbeat client informing them that they’ve been listed and directing them to visit the website to find out why.
Federal law protects the owner of the interactive website from being responsible for the information that is posted by others, but the poster is not similarly protected. Government officials recommend other options for vetting such complaints, such as filing a complaint under the Consumer Fraud Act with your state Division of Consumer Affairs. Forms are usually available online, and some states, including New Jersey, offers Alternative Dispute Resolution to help avoid going to court.
Depending upon how much money you are owed, filing a claim in Small Claims Court is also an option, but be aware of money limits. In New Jersey, you can only file in Small Claims Court for up to $3,000. Cases up to $15,000 must be filed in the Special Civil Part, and amounts larger than $15,000 must be filed in the Law Division of the Superior Court.
In The Accidental Medical Writer’s opinion, the best defense against slow-paying clients begins with a good offense. Start by developing a solid relationship with your client built on mutual trust, respect, and understanding. Send progress invoices for larger projects to limit your financial exposure. Invoice promptly, and follow up quickly if payment becomes overdue. Avoid the temptation to drag your clients through the mud. It may feel good at the time, but vengeance is a bitter pill. Besides, it’s even less likely to get you paid. Quite often, slow payment is the result of an unintentional loss of paperwork, and your client will be happy to expedite the process to keep your relationship on track.
Brian Bass is co-author of The Accidental Medical Writer, a site with information, inspiration, strategies, lessons and tips to help you become a successful freelance medical writer.
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