Do you have clients who are always late paying their invoices? Julie Elster shares how you can get paid on time, every time by following her tips on communication and insisting on being paid upfront.
Often, the core of the problem is lack of communication from the start, where no one knows how much to pay or when it is due or who they should talk to about billing. Julie reminds freelancers to pick up the phone and talk to their clients about expectations and figure out a payment schedule that works for both the freelancer and the client.
Julie shares with us:
- Why clients don't pay: Most of the time, there is confusion about when payment is due and how much is due. Start a project off right by first qualifying the client and making sure they will pay you the way you want to be paid and then write out all expectations about when and how to get paid, and who you need to talk to in the company. Sometimes, clients don't pay because they don't have the money or they have a problem with the project. Now you need to talk to them.
- What to say to clients who are late on payments: Use Thermonuclear Niceness, as Julie says. Leave emotions at the door. Don't be accusatory, don't judge. You need to be open-minded to find a solution. “You are going to catch more flies with honey than with vinegar.” As for what exactly to say, figure out if there is an issue with the service and how you can solve it. Figure out a payment schedule that gets you paid when the client has cash on hand and works for both of you.
- How to get establish a payment schedule: Aim for getting paid 100% up front. You can even throw in a 10% discount to incentivise up-front payment that disappears if you split it up into several payments. It is safer for you and also incentivises you to work for the goals of the project, rather than hourly (we have talked a lot about the drawbacks of hourly payment throughout this podcast). If you do split it up, make payments due at the start of milestones, not the end. It is sometimes hard to define what is the end when the client wants another modification or a “quick” change.
- How to fire a client: Sometimes, you have a client who will absolutely not abide by the payment terms or due dates and you are forced to say goodbye. You have three options:
- You can finish the current project and refer the client to someone else for any new work – the slowly fade away approach.
- If you have only barely begun, you can “hit the undo button.” Stop work on the project and give the client a refund and referral to someone else that might be a better fit. The refund is key here, even if it hurts momentarily. You can make it up by working with a client that fits better with your style and goals.
- And finally, if you are too far into a project, but it is really not working, you can stop at a milestone. But be prepared for the client to fight you to get their money back. And be prepared to lose the fight. This is definitely the hardest and riskiest option, but if you are that miserable, it might just be the price to pay to move on to a more rewarding project and client relationship.
- When you should seek outside help: So you tried talking to the client, openly and honestly, but the conversations never end with a paycheck or agreement. It might be time to get a third person, more distanced from your emotions, to talk to the client on your behalf. Ideally, if you keep an eye on your client relationships, you will be able to talk to the client long before conversations end in stalemates.
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