The issue of collecting payment from clients is something freelancers don’t really like to talk about. But a lot of us have been stiffed, no matter how we don’t like to admit. Here’s the scenario: You agree to work for a dream project with a decent budget and you have a wonderful client or project manager who tells you not to worry about things. That person may even send you a deposit as a sign of goodwill… until the next payment due date comes. What will you do if your payment is past due?
Collection 101 for Freelancers
It is only normal to be furious when you don’t get to receive what you deserve for your hard work. While checking out the signs of online job scams is your best defense, you may never know what will happen next. Yes, sh** happens, even if you have done all you can to ensure timely payments from your clients. Always keep in mind that in the art of collecting money, if you don’t ask for it.. you don’t get paid. Here are steps you can take:
1. Write a Reminder
Nothing can be more unsettling than unpaid invoices so do your part in reminding your clients a week before due date about their obligation. This will give you lead time for accommodating revisions as well.
2. Nudge Your Client
When payment date comes and you have zero balance on your account, send your clients a short, simple and to-the-point email. Keep it professional, minus all the mixed emotions you’re feeling right now. Your clients may just be too busy for the moment… so try to keep your cool.
3. Dial that Number
Give your client a deadline of 72 hours and if s/he failed to reply, that’s when you need to pick up the phone and dial. Have you even gotten your client’s business number? Telephone is one of the most useful tools in collection because you get the chance to talk to the person, ask questions and end the call with a commitment to pay. Just do it with tact and maturity, minus all the threats you can think of.
4. Be Flexible
There are times when clients are in real trouble and they really don’t have the intention of becoming the next vanishing act on cyber space. It is important that you keep your options open and consider a flexible payment scheme that will be beneficial to you both. You may even agree to have payments post dated or you can give discounts for advance payments in the future. The goal here is to clear your clients debt easier and faster.
5. Nudge Harder
When your client crossed that thin line between a customer and a debtor, you must get outside help. You simply figured out that after all those payment reminders you’ve sent and extensions for your payment dates that your client has no intention to pay; it’s time to tap into the many collections agency on the Web. Some of these may charge you a lot and you must always compute the rate against the worth of your unpaid invoices. You can also try writing your collection letter which you can send in a 30, 60, or 90 days past due notices. If nothing happens, you can consider reporting that client to FBI’s internet fraud department, the Better Business Bureau, FTC’s Bureau of Consumer Protection, The Freelancer’s Union or any online review sites.
Legal action should be the last resort for those freelancers wishing to collect money owed to them. This will be very costly and lengthy so make sure you have a good chance of success. The last thing you want is to be wasting money on chasing a client who won’t pay. Just keep in mind that if you really lost money, you can write it off as loss in your income tax statement.
The Good News: Fortunately, the number of clients who pay on time outnumber those who don’t and Ajeva will simply make the collection process a hassle-free experience for freelancers.
How to Write a Collection Letter