What Should You Do If a Client Doesn’t Pay?
Because of the lack of a formal employment relationship, freelancers are exposed to greater risk of non-payment for work than traditional employees. A client refusing to pay for completed work is an unfortunate and frustrating experience. Knowing what to do when faced with the challenge of a non-paying client is helpful. The following are some…
Advanced Preparation Strategies
Before discussing strategies to deal with non-payment, consider things you can do ahead of time to minimize your risk and to allow options when faced with this situation. When possible, research potential clients to assess the risk. Project-based sites that match clients with freelancers typically have review features that allow users to rate clients. Use them. Look at customer reviews of the business as well. If a company is unfair to its customers, there is a good chance it won’t treat freelancers fairly. A standard contract that outlines client and freelancer commitments is also beneficial to provide some legal footing if non-payment occurs.Cease Ongoing Work
Another preventative measure is to require some or all of the payment up front. Some contracts outline an installment plan that includes payment for deliverables during a long or ongoing project. If a client fails to meet his or her prescribed payment requirement, discontinue your work for them until that payment is received. When it is, communicate necessary adjustments to your work timeline.Send Multiple Invoices
In some cases, non-payment results from a client overlooking an invoice. Clients can get distracted by impending deadlines and other important matters. By sending invoices through email and postal mail, and following up with a phone call, you minimize the risk of oversight. Furthermore, you reduce a client’s ability to disregard payment or to suggest an invoice was never sent.Follow-up First
Before getting aggressive with your tone, assume first that the non-payment was an oversight or mistake. Follow up with professional communication and send a second round of invoices after a few days. By maintaining a professional attitude, you leave the door open for future work. Getting aggressive or unprofessional will likely put an end to future opportunities.Take Legal Action
If you have communicated multiple times and come to the conclusion that payment is not coming, there are a couple legal actions you can take. One is to have an attorney draft a letter indicating your intent to take legal measures to recover payment. This move may prompt payment as the client wants to avoid the costs, time and hassle of a legal defense. You can turn the matter over to a collection agency, depending on the amount of money you are owed. With this approach, you would get around half of what is recovered.Conclusion
These are steps freelancers can take to prepare for and respond to non-payment from a client. Regardless of the outcome of a pending matter, use non-payments as an opportunity to review and revise your contract and payment terms to avoid similar issues in the future!Related resources
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