Get Your Money
by Rachel Goldstein owner of Allfreelancework.com
- 1000s of freelance jobs
Wow! Hooray! You just finished your first project ever!
Hey, when are you getting the dough you were promised?
Getting paid is the single most important aspect of
being a freelancer, so make sure that you take your
time and do things right. If you don’t, you might land
up getting screwed in the end. Just because you have
completed a huge profile job and you are looking to
receive big dough in return, doesn’t mean that the client
is going to pay on time or even pay at all. There are
many strategies to deal with delinquent clients, but
there are also many precautionary measures that you
should take when initiating a relationship with your
1. CHECK CREDIT REPORTS –
If you are taking on a substantial project that is going
to occupy a big chunk of your schedule, you should spend
the money on a credit report. The most reliable website
to find this sort of information is Experian. Their
reports include credit status, legal filings, collection
agency filings, payment behaviors and trends, and company
Searching the database is free. When comprehensive information
is available, Experian will provide a full Snapshot
report, including a credit risk category, for $14.95.
When little information is available, a limited report
without the risk category costs $5. Of course, if
Experian has no information about a business there is
2.CONTRACT / LEGAL AGREEMENT –
A legal agreement is the most important step in the
whole process of getting paid. Make sure on your contract
to specify the time schedule, price for your service,
and terms that were agreed upon mutually between you
and the client. I was screwed out of
getting paid on my first freelance gig because I didn’t
insist on a contract. If for some reason a client won’t
sign the contract, then they aren’t a trustworthy company
to work for. So learn from my mistakes and find a contract
to use in your freelance business. MAKE SURE THE
CLIENT SIGNS AND SENDS TO YOU A COPY!!!
On AllFreelance.com there is an entire section devoted
to contracts, which can be found at http://allfreelance.com/contract.html
**Get Ideas for Your Client Contracts from a Contract
Swipe - http://provider.com/contracts.htm
- This swipe file is filled with example contracts that
you can use. My suggestion is to take a little from
one and add to another until you have a perfect contract.
These contracts are meant for web developers but can
be used for any profession with a little change on your
part. Remember, it is always a good idea to have a lawyer
look over your contract.
3.DOWN PAYMENT / RETAINER –
I always have clients pay $100 - $200 up front to show
they are good for the money. Also, this enables me to
have at least some money in case they back out of the
contract early. Don’t forget to take the retainer amount
out of the last invoice amount. I know that one of my
associates ask for a 20% retainer to help pay for the
upfront costs that he pays to printers and other vendors.
This is a wise system to follow for you if you also
have many out-of-pocket purchases.
Make sure to use net 30 on your contracts. What this
means is that your client has 30 days to pay up the
money that they owe you. Since many companies routinely
pay 30-90 days late on all invoices, I would never make
your terms net 60 or net 90. You might also want to
consider implementing a late fee, but I would suggest
instead raising your fee a little bit and then offering
a 5% discount if your client pays on time.
5.SCHEDULED PAYMENTS –
It is easier for a client to remember to pay if you
have a schedule for his payments. Also, if you break
up the payments into smaller invoices, you can always
refuse to continue if you aren’t receiving the money
that you are owed. Most clients won’t risk falling behind
schedule and they will pay up. Think of it this way
… your clients won’t have very much to lose if you ask
for all of your money at
the completion of the project, because they already
received the completed work.
But, Rachel, I have implemented these measures and STILL
my low-life client isn’t coughing up the money. What
is a poor freelancer like myself to do?
1.SEND OVERDUE NOTICES IN WRITING –
You should always send something first to the client
in writing stating their delinquent status. I find it
helpful to both email and snail mail overdue notices.
2.CALL / EMAIL REGULARLY –
Call regularly and make an annoyance of yourself. Make
sure not to use vulgarity, curse words, or threaten
violence to express yourself – this is illegal. Keep
things professional, but DO make a huge fuss over the
matter. Email works well too.
3.MAKE IT PERSONAL –
Tell your client how much this payment means to you.
You rely on this payment to pay your bills, to pay for
medical care, to feed your children. Tell your client
that you are a real person, and that you can’t make
ends meet and feed your children if you don’t get your
“paycheck”. This might put a face on the bills that
have been sitting on your client’s desk.
4.USE EMBARRASMENT TO WORK FOR YOU –
Draw phone calls out to embarrass the client, making
sure to bring up previous conversations that negate
his or her comments. There is nothing more embarrassing
than being called a liar.
If your collection efforts have all but failed, you
can try to hire out a collections agency. You don’t
have to pay collection agencies out of pocket. The way
it works is they take a percentage of whatever they
win back for you. It usually is about 20%, but I have
it as high as 45%. Shop around and find a collector
that doesn’t charge too much.
6.SMALL-CLAIMS COURT –
If you have a signed contract like I recommend, winning
your case should be quite easy. File a complaint with
your local small claims clerk. Unfortunately it isn't
easy. Form after form is awaiting you. But if you want
to get that money, or even if you are suing out of anger,
it will be worth it to you. The best part of small-claims
court is that there is NO LAWYER NECESSARY. In addition,
usually once a client sees that they are being sued,
they pay up. It is easy as that…you don’t need a lawyer
in small claims court. For more advice on small claims
court, check out this article.
If you still cannot get your money back, all you can
do is use your experiences as a learning experience.
Think about what you might have done wrong and do things
differently with your next client. Good Luck!!
- 1000s of freelance jobs, articles, and resources.