Your client hasn’t paid – here’s what to do next
Getting paid for your work is crucial for your business – and even more so if you’re dependent on the income to pay this month’s rent. Unfortunately, we don’t live in an ideal world. As a freelancer, you will sooner or later encounter clients that pay late all the time or that push the payment forward again and again, often for several months. Sometimes they even request extra work or changes in the meantime! It can be hard to get paid in these situations because you don’t want to hurt any feelings or come across as too harsh.
What can you do to get your money, while staying professional?
I’ve dealt with clients that pay late or not at all many times over the years. Here is a clear guide what you can do next to move forward.
What’s required from you when dealing with payment disputes are clear, consistent and assertive actions. Leave your emotions at the door and give a clear description of what’s happened up to this point, what action you’ve taken and what will happen next.
Here is an email / letter template that you can use:
even after several reminders I have still not received payment for my invoice dated 12/03/16 for $1000, a copy of which is enclosed. I’m writing to let you know that I have now stopped all work on the project until full payment has been made.
You have 7 days from the date of this letter to make payment in full. Should payment not reach me by [insert date], I will have no choice but to pursue the matter via the small claims court.
Yours sincerely, [insert your name]
Send this letter by first class, registered and signed for postal service. Include a copy of the original invoice along with bank details so that it is easy for them to pay you. Set yourself a calendar reminder for 7 days’ time and get on with some paid work!
Often the above letter will get you payment. In case they still won’t budge, the next step is to go to the small claims court.
Note: There are limits to the amount of money you can pursue via the small claims court. If it’s a larger sum of money, speak to a lawyer about your options first. In these situations, it can be worth asking the lawyer to write and send the above letter on your behalf. You will need to pay a fee but it adds more weight to the matter and is often more effective when larger sums are involved.
The why behind the how:
- Before you take legal action, you are required to give the client a fair chance to rectify the matter. This letter does so.
- By sending the letter by registered post, you create a provable paper trail of the communication.
- By being clear, consistent and unemotional, you’re removing any doubt or means of interpreting the letter in a different way.
How to avoid problems going forward:
- Make sure your contract has the correct clauses – non-payment should be grounds to stop work and to terminate the contract. Only assign ownership of your work once full payment has been made.
- Treat all customers the same. Set up standard email templates as invoice / payment reminders, 7, 14, 21 days after sending out the invoice. Start friendly and get more serious in each step. Send these out to all clients consistently. The letter template above becomes your last email or letter in the sequence.
Good luck and let me know how you get on!