Bringing Home the Bacon
It’s not enough to actually earn a living at freelancing. If you’ve been in this business for a while, you understand that not every client is forthcoming with the amount due. Sometimes, and I hope for your sake it’s not often, one or two will fail to pay after a few attempts at collection. So what’s your recourse?
Have a Plan
Start with making sure you establish a regular billing routine. Mine goes like so – I invoice at the same time I deliver the project. I then print out that invoice and stick it in my folder marked “Current Invoices.” Also, I open Excel and mark down all the info (if you have Quicken or Quickbooks, that would be a good place to log your entries). I set up alerts on my Outlook calendar for one month from now.
Setting Up the Invoice
All invoices should have a few things – the name of the client, the deliverables (project name), and the amount due. Don’t forget to add your name and address. Phrases to include:
“Please pay promptly to avoid late fees.”
“Thank you for your business.”
There are other phrases to add, but I’ll get to those in a minute.
Work the Plan
If the invoice is not paid in 30 days, I tack on late fees (mine are 25 percent) and resend the invoice with a friendly reminder. Again, I print that invoice out, staple it to the first one, and mark it in Excel and Outlook. If the client responds immediately (within a day or two), I’ll usually waive the late fees. We all lose invoices – now’s the time to be cordial about it. If, however, the client is incommunicado, I’ll wait that 30 days before sending out what I consider to be my last invoice for payment. This one will have two months worth of late fees and will have the line, “Please pay to avoid litigation” displayed prominently on it. To date, that line has never failed me.
Leave a Paper Trail
All of this systematic invoicing serves two purposes. First, it keeps you on top of your bookkeeping and keeps you from losing the chance to collect what’s due you. Second, it gives you a paper trail. Remember when I said to add the line regarding litigation? That line is one you need to learn how to act on. If you promise it, deliver on that promise. All of your invoices will show any court that you were active in your attempts to secure payment. That works in your favor.
Invoice Tips
One more thing to add to your invoices – a disclaimer about the transfer of ownership. I have one line on my invoices, which is added on the second invoice – “Rights transfer to customer upon full payment of invoice.” This helps you in another way. If your client turns out to be a slacker when it comes to paying, you can add copyright infringement to any lawsuit beyond small claims court. Check with an attorney to clarify this point as laws will differ in each state.
So far, I’ve not had to go through small claims. I would, however, do so if need be. As a freelancer, you should also consider what it takes to file a claim, and what to expect. Some freelancers choose to go through a collections agency. I don’t. The reason is I was told by an attorney that collections is costly and not any guarantee that you’ll get what’s owed you. Just make sure whatever you do, you’re willing to follow through in order to receive payment.
This is really good advice Lori. I’m not doing any of these things right now because, so far, I’ve been fortunate enough to get paid when I was supposed to.
But I know that’s going to change someday and having some concrete paper trail is a good idea even if it’s only to keep things straight in my head.
Start now, Mike. If you establish the habit, it sure beats trying to squeeze money out of someone after the fact! (as I’ve had to do)
Also, if you say you’re going to do something and don’t follow through, the person who owes you can use that against you.
I have to say that sending an invoice whether or not a company asks or requires one presents a professional image. It also helps to research the folks you’re writing for, though that doesn’t always ensure payment.
Great tips! Now, I had no idea one could actually tack on late fees. Luckily I’ve always gotten paid on time. I’m currently waiting for word about a piece of mine that is supposed to be published, but I’m still not being told when and I only get paid on publication. Contracts have been signed an everything though. It’s been over a year now, so the wait is just annoying, especially since the piece is supposed to be online. You don’t think it would take well over a year. I can only imagine how long it might take me to get paid once that does happen.
April, a year is way too long! It seems as though they’re not going to publish it. Write them a letter and thank them for the opportunity, but let them know you’re retracting the piece in hopes of selling it elsewhere. They’re not playing fair by making you wait that long.