In this article, we’re going to let you know a few ideal ways to deal with late payments.
So it is up to you and the client to find a reasonable timeframe that works for both of you. If you can’t negotiate that with a client, there are a couple of ways to make long term payments hurt less.
1. Prevention is better than solving
Preventing a problem is oftentimes better than trying to solve it once it has already occurred. This is also true when dealing with late payments. The best way to do this is by setting up a good contract.
Getting money upfront, once you have completed your work or having milestones across the project if it’s longer, are all sensible decisions. It might take some work to see which works best for you and to convince your clients, but it’s well worth it.
Secondly, make sure that you don’t shoot yourself in the foot. A common mistake with freelance writers is to have a clause that says you get paid when your work is published. But imagine you submitted an article six months ago and the client is just now including it in their newsletter – that’s neither your fault nor is it your job to place your content. Be wary of those tricks.
2. Try to negotiate a reasonable timeframe (e.g. 7 calendar days)
Explain to your client why a timeframe of one month doesn’t work for you and what your concerns might be. Believe it or not, there are times when clients just include the 30 days in the contract because that’s how they’ve always done business with other companies. But you can often convince them to change that. Seven days are a reasonable time you can aim for.
3. Have an up-front or step-by-step fee
One of the ways to minimize the losses of long term payments is to split up the amount of money your client has to pay you. There are generally two ways to do this. The first one is establishing a lump sum up-front – as soon as you start working on the project you get 20 to 50 percent of the payment immediately. Depending on whether or not the client trusts you, that can be a good way to handle the situation.
Another strategy a lot of freelancers love is splitting up the project in different steps. Let’s say you’re writing a ten page tutorial for a software product. The first step might be the general structure and a few sentences for each chapter. The second could be the initial draft, the third the finished product. If you make sure to get a third of your payment for each step, long-term payments will be easier to manage.
4. Request full payment upon delivery
To avoid any confusion about when you’re getting paid, you should always establish what “finishing the project” actually means. As a rule of thumb, always go for full payment upon delivery. Going back to the example of building a website, you’re done as soon as your part of the job is ready.
If the client wants to engage writers to fill it with content or do an internal test run for a couple of weeks, they’re free to do it. But you’ve done your job and are entitled to your money.
5. Have a late payment fee
If nothing else helps, late fees can be a good incentive for a client to pay on time. You might want to give people the benefit of the doubt by establishing some wiggle room. In your contract, that might look something like this: “Should the payment not be received in three days after the initially established date, a late fee of X is due.”
6. Always have a safety cushion
Sometimes, clients won’t budge, regardless of late payment fees or any other precautions you might have set in place. In that case, you have to ask yourself the following question: “What is this client worth to me?” If this is a client you’ve had a long business relationship with or the project is especially lucrative, you might want to swallow down and still take the terms.
But if that’s not the case, don’t be afraid to say no (here is how to do it the right way) – that’s a lesson many freelancers have had to learn the hard way.
7. Send payment reminders
Sometimes, clients won’t budge, regardless of late payment fees or any other precautions you might have set in place. In that case, it’s time for you to follow up with payment reminders to your client until you receive your payment.
At the end of the day, you should be able to communicate effectively with your client on your payment schedules and try to avoid late payments. We hope that this article has helped you out in your freelancing journey.
If you’re still not sure where to start your freelancing journey, why not check out Rtist? We have one of the biggest creative talent communities in Malaysia that matches you with your clients.
