These are some important questions you should answer before starting services;
- What services will you be providing?
- What is the expected timescale for delivery?
- When are payments expected?
We recommend you create a simple contract prior to commencement, which sets everything down in black and white. This will help to avoid any misunderstandings, and can also be used as a reference for disputes. We definitely recommend you do this for all your jobs. The Freelancer’s Union has a free online contract creator you can use to create an agreement.
Most clients will be willing to make some payments in advance. All you have to do is ask. So consider Asking For Payment In Advance (Or Use An Intermediary). The best way to mitigate non-payment issues? Get paid for your work upfront. We’ll be honest: that’s going to be tougher to do when you are starting out. But once you are established, then in many industries it’s common practice to ask for a partial (or even full) payment in advance. Setting the upfront payment at your “cost” is a good idea. That way if there are any issues with the balance, at least you won’t be out of pocket. If you’re a freelancer, another option is to use an intermediary such as Upwork.
A lot of freelancers lose money because they simply don’t chase up payment. Perhaps they’re afraid to lose future work from the client. Or maybe they just think chasing seems a little “desperate”.
But if you’re running behind on a project you can bet you’ll be getting emails and phone calls from your client. So if they’re late with payment shouldn’t you do the same?
You don’t have to be aggressive. Just a simple reminder email or letter once the invoice is a week or so behind can do the trick.
After all, your client might have genuinely forgotten to pay the bill. It happens.
We recommend that you keep track of when all your invoices are due.
Most invoicing software (including ours) will do that for you automatically. Or if you prefer, you could simply keep note of invoice due dates in a calendar or diary*.
What To Do If Your Client Still Won’t Pay.
Polite payment reminders not working?
Unfortunately, you’re going to have to choose whether to escalate.
The good news is: you have options.
The bad news is: most of those options are going to cost you some upfront cash.
So you’re going to have to weigh up whether it’s worth outlaying (and potentially losing) extra money to get what you’re owed.
Convinced that it is? Then here’s what to do.
Unpaid Invoices In The USA:
Going Legal If you’re in the US, and your client isn’t paying, then you’re going to have to engage a lawyer.
The first step will normally be for your attorney to send a formal demand for payment.
A scary looking legal letter can often do the trick.
But if that doesn’t work, then unfortunately you’ll have to consider suing the client for the money you are owed.
This is going to be expensive. So we’d only recommend this course of action if:
You’ve exhausted all other options for getting the money, i.e. the client is simply ignoring you.
You think the value of the outstanding debt is worth the outlay
You believe the client can actually afford to settle the debt. And if you do go to court, having that signed contract we mentioned at the start is going to be crucial.
Unpaid Invoices In The UK: Small Claims Court
If you’re in the UK, the legal process for collecting an unpaid debt is (relatively) simple.
You can use the small claims court to chase debts of:
- under £10,000 in England and Wales
- under £5,000 in Scotland
- under £3,000 in Northern Ireland.
These are some important questions you should answer before starting services;
There’s a fixed fee for registering your claim, but it does vary depending on the size of the outstanding debt. According to Which, the fees range from £25 for debts under £300, up to a maximum of £455. You don’t need a solicitor to register your claim. You can do it yourself online (gov.uk) or by post (form and instructions here).
Note: a small claim does not guarantee payment. If you win the claim, you will be able to escalate further, but this is going to incur more costs. Often however, the fact that you are willing to go to court will be enough to make the client pay up.
Bonus Tip: Consider Joining A Trade Body
Escalating non payment can be expensive.
And if you’re a freelancer, it can be a little scary going through the legal process “on your own”.
Look into whether there are any trade bodies in your industry and consider joining them. Often your membership will include legal assistance — including help with unpaid debts.
