Having trouble getting paid as a freelancer? Don’t worry, you’re not alone. I will teach you how to master invoicing and get paid every time.
When a client doesn’t pay you on time or at all, it’s not always so cut and dry. These types of situations are often messy.
I had been freelancing for an agency client quite a bit. We had a great relationship. And they always paid in reasonable time, until they didn’t. What happened was, they hired me on a big project, and couldn’t pay me until their client paid them.
In other words, shit rolls downhill and I was at the bottom.
Remember, this client and I had done a lot of work together. So this put me between a rock and a hard place. I knew the client was good for the money, but I wasn’t made aware of their requirement before I started.
However, it wasn’t exactly their fault because I screwed up too…
We didn’t have a contract.
In this article I’m going to show you who not to do business with, the contract I now use on every project, how to use psychology to get clients to pay and what to do when a client bails on you.
Let’s do this!
Don’t Do Business With Shady Clients
Making sure you get paid can be as simple as not doing business with clients that seem shady, or make you feel uncomfortable in some way.
Here’s a few situations where I’ve personally turned down work several times…
You’ve no-doubt seen these types of job postings on Upwork, because let’s be honest, they’re the majority of what’s there…
“Seeking iOS developer to design and build an enterprise-level intranet social network mobile app for a fortune 500 company overseas. Project includes [insert several custom features here]. Blah blah blah. Budget: $100.”
It’s true, they might be good for the $100. In fact, they would probably be happy to overnight your payment. But working with clients who have no realistic idea of value is a surefire way of getting burned.
In other words, if they don’t understand their budget is laughable, what else don’t they understand?
Leave those shady freelance network gigs for people living in countries where the cost of living is way cheaper than yours.
The Unorganized Visionary
This one’s my favorite because I empathize with these people.
You get an email from someone who needs a website, pretty straightforward. You bite. And they reply with visions of grandeur all based on the stars aligning.
“We’re redesigning our brand because we plan to grow by 500% this year. And we need an award-winning website launched ASAP to help. We’ve got several investors on board so we can overtake our largest competitor, but the money won’t come in until the end of the year. I’m willing to pay more for a deferred payment. You in?”
If you see a comfortable, clear way to break a project like this down, then go for it. But in my experience, these types of clients end up throwing you a lot of curveballs along the way. So be ready to chase your money.
Surprise! I Want You to Work on My Mystery Site
This last one is a classic.
“Hi, I saw your work on Behance and it’s incredible. I’m in need of a handful of websites to be launched this year. The first one is slated for next quarter. Our budget is in the $50,000 range. What’s your bandwidth, and are you available to talk this week?”
What more could we ask for, right? We immediately reply with interest, and then they come back with this little gem…
“Are you comfortable working on adult websites?”
I’m not saying that people who run adult websites are more shady than other website owners. But what I am saying is that taking projects where the client isn’t up front with you isn’t the best idea to ensure you get paid every time.
So overall, look for whatever you consider to be red flags and feel comfortable with the projects you take on. It won’t always save you, but it’s great practice.
It’s Not Rocket Science, Use a Contract
After you accept a project you’re comfortable with, use a solid contract.
It’s not rocket science. A good contract protects both you and your client in case anything goes south, and one of you wants to sue the other.
When I first started out I didn’t want to pay a lawyer to write a contract. Not the smartest idea in the world, but I felt relatively safe with a contract I’d gotten from a book called The Business Side of Creativity.
By the time I actually had the money to pay for a lawyer, my colleague, Dan Mall, beat me to it. He paid a lawyer to write a service agreement for Dan’s new agency, Superfriendly. And then they released it for free online.
It’s called The Superfriendly Agreement. And I now use a version of that, instead of nothing at all.
I’ve read a lot of service agreements over the years, both from a freelancer’s perspective and an agency’s perspective, and Dan’s agreement is the best I’ve ever read.
Again, I’m not a lawyer, and so I’m not recommending it to you, but if you’re interested in what I use for a contract, check that out.
Let Clients Choose What They Want to Pay and How, But Not When
First of all, give your clients as many ways to pay as you can think of.
Yes, there will be fees. That’s the cost of doing business.
Making the payment process a big pain in the ass won’t help your chances of getting paid on time.
Now here’s the secret sauce…
Let the client choose what they want to pay.
Here’s the 3 payment options my clients can choose from, that ensure I get paid every time:
1. 50% Before I Start, 50% Halfway Through
This is the only option I offer where my price doesn’t change.
Paying 50% before the project starts is my fee for scheduling the project. And the other 50% payment halfway through, ensures I get paid everything before the project is over.
Most professional service contractors use this option as a standard, and most all clients consider it to be fair.
Even if you give no other options, this ensures you’ll be paid at least half.
2. A 5% Discount for Paying Before the Project Starts
My second option is to offer my clients a discount for paying the entire invoice before I start, because who doesn’t like a deal?
This is my favorite and the one I prefer my clients choose. It’s a no-brainer. The risk of not getting paid is removed from my plate completely, and I give my client the opportunity to save money for helping me remove that risk.
It’s the classic win-win situation and most of my clients choose it.
This is the best way to ensure you get paid every time.
3. 15% More After Payable on Delivery
This option is designed exclusively for clients who don’t want to share risk for whatever reason.
It says yes, I’m ok deferring payment, I’ll take on all the risk in our relationship, but only if you’re ok paying quite a bit more for that luxury.
It’s a strong move and you don’t have to use it, but it sends a message. The message is, choose one of the other options.
Almost none of your clients will go for this.
Don’t be afraid to experiment and come up with your own options. But do so with the principle that business relationships ought to be reciprocal in nature.
Immediate Payment Only, No More Net 30
This is the “not when” part.
Notice none of these options include the so-called standard of net 30 billing. Net 30 means your clients have up to 30 days to pay you after you invoice them.
Clients should pay you immediately, just like you do for concert tickets. No payment plans, no net 30, no waiting – immediate payment on all invoices.
It’s not uncommon for your client to have their own payment policy of net 30, or in some extreme cases, net 60 or 90. If that’s the case, you need to decide whether or not that’s a client you want, but all is not lost.
First of all, ask for an exemption. There’s nothing wrong with simply asking to be paid immediately.
If that doesn’t work simply add the 15% fee for that luxury.
Asking all the right questions before you price the work or draw up a contract is very important. The last thing you want to do is have to amend what you’ve already done to compensate for things you didn’t know from the start.
And there’s one last, big thing I do to seal the deal…
Offer Clients a 100% Money-Back Guarantee
Yes, you read that right.
I offer my clients a 100% money-back guarantee, no strings attached. If they’re not happy with my work, they shouldn’t pay for it. The catch is, this offer doesn’t apply to work they’ve already approved.
For example, let’s say I’m designing a 5 page website. If they approved the homepage, they pay for it. If they pull the plug thereafter, they get all their money back based on the percentage of project broken down in my service agreement.
Guess how many customers I’ve had take advantage of this offer?
The chances of a client hiring you for a project and all the time it takes to do that, paying you up front, turning down your work only so they can get the refund and use your work anyway, is slim to none.
This offer exists to completely erase the risk from your client.
What to Do When a Client Bails Without Paying
I’ve heard the story a hundred times, a freelancer works their butt off for a client only to get bailed on after delivering the work.
And it kills me every time. Still, the situation is rare.
But when it happens you have a few options available to you. Here’s how I handle deadbeat clients…
1. I Use These Last Resort Email Scripts
Hope all is well! Just a heads-up, I was supposed to be paid for [project] this week, and never was. Are you waiting on me for anything?
The fastest way to pay me is online here: [PayPal or Stripe link already set for the amount they owe]
Please let me know ASAP.
If another week goes by, send your final email:
I haven’t heard from you and I still haven’t been paid.
At this point, my next step is to contact the state attorney general’s office. They’ll contact you for explanation soon after.
Hoping this will be resolved soon.
And then you do exactly what you say you’re going to do. The following week, if you still haven’t been paid, and even if your client gets back to you with an excuse, email the attorney general’s office.
If the client pays, they’ll simply relay that to the attorney general when asked.
And if they don’t pay, it gets the ball rolling.
The Attorney General is your advocate (also known as “the people’s lawyer” or “consumer advocate”) in that state. No business in their right mind wants to be questioned by their general’s office.
You may have heard contacting the Better Business Bureau (BBB) is the right thing to do.
The BBB is a private company (just like McDonald’s) with zero power to do anything except publish a negative mark on their website.
2. I Never Work With Them Again
In any case, I’ll never work with this client again. In the words of Mr. Wonderful, from the show Shark Tank, they’re dead to me.
Open up a Google Sheet, name it the “Do Not Service List” and put their name and company on it.
They’re dead to you. But I also believe in second chances.
If this particular client really wants to work with you again, and you’re willing to take the risk for whatever reason, make them work towards a reciprocal relationship. Only offer them the option to pay 100% before the project starts at zero discount.
Once they earn back your respect, feel free to put them back in normal rotation.
3. Most of the Time I Let It Go
There’s a good possibility that when the attorney general’s office gets their explanation, the client will throw you under the bus for some reason. It’s very rare a client will swallow their pride and actually tell the truth.
Excuses will be things such as you didn’t deliver what you were supposed to, you were late on delivering or they didn’t get your emails.
At this point the general’s office will send you a letter stating the issue cannot be resolved, and leave moving forward in your hands. Basically, if you want to move forward at this point you’ll need to sue the client. And in my experience, nine times out of 10, it’s not worth it.
The thing is, lawyers cost a lot of money.
You have to make sure, by consulting a lawyer (ironically), if the cost outweighs the benefit – not an easy decision to make. And that’s why most of the time…
I let it go.
This is your survival guide for invoicing and getting paid every time. Let’s go over everything one more time…
- Don’t do business with shady clients
- Use a contract
- Let clients choose what they want to pay and how
- Use a money-back guarantee
- Only chase clients when it’s worth it
At the end of the day, you can’t force a client to pay you, at least not without a judge. But using these best practices greatly reduces your chances of getting caught between a rock and a hard place, like I did.
I know, I didn’t talk about what the best invoicing software is. Honestly, it doesn’t matter. But for good measure, I use FreeAgent, and I’ve also used QuickBooks and LessAccounting in the past.
What steps have you taken to ensure you get paid?
If this article has helped you at all, please share it with someone who you know could benefit from it. And please email or comment with your questions.