Blog
June 29, 2022
How to Handle Clients Who Don’t Pay as a Freelancer

What You’ll Learn:
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- Why late payments are more than just an inconvenience
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- Tips and tricks for collecting late payments from clients
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- How to avoid late payments in the first place
There are some serious perks to being a freelancer—you get to choose the projects you take on, set your own hours and rates, learn new skills, and be your own boss. But getting paid as a freelancer isn’t always simple and streamlined. According to a study done by Freelancers Union, the average freelance worker loses almost 13% annually due to unpaid invoices.
Whether you’re just starting your career as a freelancer or have been in the business for a while, use this guide to collect late payments successfully and even prevent late payments in the first place.
How to collect late payments
Waiting around on unpaid invoices, sending payment reminders, chasing down your hard-earned cash…it all adds up to extra stress and more work. Here are some effective ways to navigate the different stages of overdue payment collection and mitigate the impact of outstanding invoices on your overall cash flow:
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- Start with a polite reminder
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- Explore other contacts
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- Consider client circumstances
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- Withhold final deliverables
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- Charge late fees or request deposits
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- Escalate if necessary
Start with a polite reminder
There are plenty of valid reasons that a client might pay late, from cash flow issues to not understanding your preferred payment terms. And you can even maintain a successful working relationship with late-paying clients, provided you align on expectations and they make changes going forward. Before you can determine whether that’s possible, you need to understand what’s at the root of the late payments issue.
Follow up with a polite payment reminder shortly after they’ve missed their deadline. It’s possible that they simply forgot or have been too busy to pay the invoice yet. If you’re wondering how to keep things professional when following up on a past due payment, send a standard past due notification with the invoice attached. Worried about striking the right tone over email? You can always opt for a good old-fashioned phone call—it’s personal and quick. Make your best judgment based on the relationship you have with your client.
Explore other contacts
If you’ve sent a reminder and still haven’t heard back about an outstanding payment, it could be that your requests are falling on deaf ears. Maybe there’s someone else on the client side in a better position to get things done. Try reaching out to another decision-maker or even someone in the accounting department. Going directly to a source with authority can help bypass any red tape and hopefully get your invoice paid quickly.
Consider client circumstances
Although it can be super frustrating to deal with unprofessional behavior like late payment, try to get a read on your client’s situation before taking any drastic measures. Are they a small business that’s having cash flow issues? Are you working with a sole proprietor who might be stretched too thin? Life is messy and complicated, and people often have more on their plate than you might initially think. If you can get more details you may be able to empathize with their situation and it will be much easier to come to a resolution.
Withhold final deliverables
If your client still hasn’t paid their invoice after multiple attempts at outreach and follow up, you might need to take inventory on your strongest bargaining chips. If you haven’t delivered the final work yet, consider withholding until you’ve received payment. You can then inform the client that you won’t be able to continue working until the outstanding balance gets paid in full. Keep in mind that this is a significant escalation tactic and could potentially damage your working relationship beyond repair. Ultimatums can be an effective way to apply pressure and motivate reluctant clients to render payment—just be sure it’s worth the risk.
Charge late fees or request deposits
Another option is to charge a late fee for invoices that aren’t paid on time. The fee amount should be substantial enough that it helps offset any additional costs you might incur as a result of the late payment. This fee should also act as a deterrent to late payments, incentivizing your client to pay on time. If dealing with late payments is becoming a regular occurrence rather than a one-off, consider adding terms and conditions surrounding late fees into your contract so new clients are aware of your policy and more likely to abide by it from the get-go. You might also want to request partial payment upfront to hedge your bets.
Escalate if necessary
If you’ve exhausted all other avenues and feel confident that your client is actively avoiding payment, you might need to hire a collection agency or take the client to small claims court. This is typically a last resort. Hiring a service like this isn’t ideal, but it may be necessary to get the money you’ve earned.
Tips to Help Clients Pay On Time From the Beginning
Hopefully, clients who don’t pay on time are the exception rather than the norm. Still, learning how to deal with these scenarios if and when they do arise is crucial for freelancers—the buck literally stops with you!
In addition to the above reactive methods for collecting late payments, there are also a few steps you can take proactively to help clients pay on time from the beginning.
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- Set clear expectations
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- Provide all the necessary information
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- Provide incentives for paying on time
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- Make it easy to pay
Set clear expectations
One of the simplest ways to help clients pay on time is to have a transparent agreement at the outset of your working relationship. Establish clear expectations with a detailed contract and scope of work that includes your payment terms as well as the consequences of late payments. By setting clear expectations, you can avoid uncomfortable misunderstandings and ensure that you and your clients are on the same page.
Provide all the necessary information
Another way to help clients pay on time is to provide all the necessary payment information upfront. This information can typically be added to your initial invoice and should include your up-to-date contact info, an overview of service or purchase details, acceptable forms of payment methods, and other payment terms. By providing this information early on, you’re equipping clients with everything they need to pay on time.
Provide incentives for paying on time
You can also provide positive incentives for clients who pay their invoices early or on time. These incentives could include a discount on future services or early access to new products. Make sure clients are informed about these incentives before they sign their contracts.
Make it easy to pay
Finally, make sure it’s easy for clients to pay their invoices. If you have narrow or inconvenient payment terms, your clients may just put off payment because it’s a hassle. Some examples of flexible payment terms include accepting multiple forms of payment or offering online payment portals that are linked directly in your invoice email.
Protecting Yourself From Late Payments
You will probably encounter late payments at some point in your freelancing career. But if you take steps ahead of time, you can mitigate the negative impact of overdue invoices on your business and reduce the likelihood of late payments happening in the first place.
You can also use Hopscotch to automate invoicing and make getting paid as a freelancer super simple. Create an account today to experience instant, fee-free payments.