If you find yourself with a client who won’t pay, you have a pretty standard course of action.
Let’s go through the steps you need to take, if a client is blowing you off or continuing to delay payment.
Payment terms & Signed Contracts
When you agree to work as a contracted worker (w-9) you can run into problems with client payments if you’re not on the ball.
Every project must have : Payment terms and a Signed Contract.
In your contract you need to outline the work you will be providing, the amount you’ll be compensated for doing so and the terms of payment.
The most common payment terms are as follows :
- On Receipt (Due upon receiving invoice, within 5-7 business days)
- Net 15 (Within 15 days)
- Net 30 (Within 30 days)
Here are some additional resources and information on contracts:
- Elements of a Contract (understanding the essential components to a legal doc)
- Freelancers Union Contract Creator (template for creating a new document)
- 8 Clauses you should never freelance without (awesome post for freelancers)
- Zen Cash (app that follows up on invoice)
We had terms & signatures, but they still won’t pay
If you clearly outlined payment terms, and signed a document stating those terms, then your standing on strong legal footing.
However, I would also say, that threatening legal action should be a last resort.
Many situations can be worked out successfully through strong communication.
The order should looking something like this:
- 1 day late : A friendly email reminding the client about the terms and asking for a resolution
- 1 week late : A phone call and friendly reminder about payment.
- 1 Month late : A polite but clear communication that you’d like payment expedited or you’ll be forced to take legal council
- 2 Months late : Call a lawyer, have them send a letter on your behalf asking for payment
Don’t ever act rude or unprofessional
Many times, when clients have been late in paying me, it’s due to negligence rather than malice.
If I send rude or mean spirited correspondence, it’s only likely to grid lock the situation further.
Be a professional, and take the correct legal steps on the front end to avoid a bad situation.
If a client is late, try to be understanding and get a sense of why there is a delay.
If you think they are blowing you off all together then you might need legal council sooner than later.
I didn’t use a contract, now what?
Hope is not lost.
If you didn’t use a contract and the clients are refusing to compensate you, you could still have legal recourse.
A nice by product of digital communications (email) is that the record of your business dealings are recorded word for word.
(Disclaimer : You need to speak with a lawyer on your specific situation and the exact correspondence you had with this other party)
If there is a clear agreement of services render for a specific sum of money, and you can prove this via recorded correspondence, then you may have a path to getting paid.
However, this is likely to be a long and drawn out process, and your best bet is to attempt to get paid by the client by being patient and continuing to email and call.
Is there a legitimate mis-understanding?
I’d like to insert an example from a project I did in 2012.
It was for a big financial services firm and I was working with one member of their marketing team.
I was making animated content and getting notes and approval from her. It was a remote project and she was my only point of contact with the firm.
After the project, I sent an invoice for the work and didn’t hear back from her.
I continued to email and call for months, and no response.
Turns out, she had taken emergency maternity leave and had been spending time in the hospital.
Only after I started looking for another contact at the company did I get paid. They apologized and paid interest for the months that had passed.
The point is, if a client is blowing you off, do your best to find out if they’re truly blowing you off, or if there is some other explanation.
Do your best to protect yourself on the front end of jobs.
Be patient and understanding, but know your rights and where you stand legally.