I spent Friday afternoon attaching late fees to a few invoices. Mind you, I’ll never see the late fees paid – not one late fee I’ve sent out has ever been paid. Well maybe one, but out of dozens, that’s not too successful. I haven’t pushed it legally yet as the amounts, so far, have been too low to justify legal costs.
My goal, though, is to get my original bill paid. Late fees get that process going again. In one case recently, I was in constant contact with the client, who was prefacing each conversation, unprompted, with “I’ll be writing your check on Monday.” I should’ve asked which Monday. It took a few months and a few late fees. My rule is three invoices, the last one mentioning litigation. It’s worked every time.
But in some cases I’ve managed to get late bills paid while still maintaining the working relationship. No, I don’t promote working with people who ignore your invoices. I’m saying sometimes clients just drop the ball on accounts payable. You don’t have to sever the relationship just because they were a week late. In fact, it’s only after two months of invoicing will you really know if they’re worth the trouble. If they apologize and pay instantly, you’ve got a good client. If they’ve ignored two invoices and you’re preparing the third, collect your money and then forget who they are.
But do have your invoicing system in place, including your plan for those who don’t pay on time? I include a note with the final invoice stating clearly the overdue status and that avoiding litigation comes in the form of a valid check written to yours truly. This information goes on the invoice, too. There’s no way it can be missed if you bold it and put it at the top of the invoice. For me, mentioning litigation works every time. I’ve not had to press it, but I know how to if I need to.
How do you get the bills paid?
I have the conversation about invoicing before we begin working together. I ask about their accounts payable system, how they like to receive their invoices, whether they prefer to pay by check, credit card, paypal, or electronic funds transfer. I find out the name of the person in accounts receivable. In getting all the information needed to streamline timely payments, it gives clients less wiggle room with excuses.
20% late fee that accumulates.
I've rarely had to send out more than one invoice with a late fee, and always gotten the late fee.
It's all spelled out in the contract.
That's smart to talk about it up front. I have been getting frustrated lately with late payments. As a writer in Europe, it's tough when getting paid involves things like different countries and different currencies. And different languages is always fun too–especially when the company you thought you'd get paid from actually tells you to send your bill to another–and they speak French.
I have only recently been dealing with late paying clients. My most recent battle for payment was with a small magazine I'd written four articles for.
One thing I don't like doing is chasing money I've worked so hard to earn. I tried being nice sending email reminders and invoice warnings first. The publisher refused to return my emails or phone calls.
Then I threatened to inform a certain writer's organization (he gets a lot of freelance writers from) and Angela Hoy (writersweekly.com). His online reputation was at stake, so he finally responded and sent a check right away. Just add bill collector to my growing list of duties.
Got get 'em, Kim. 🙂
Chantal, you bring up an interesting thought. Bringing up payment at the outset, as Eileen suggests, is a great idea. It's also a fine line, for it's too easy to assume everyone you deal with will forget to pay you (and you have to adopt that thinking in order to protect yourself). I like Eileen's approach because it shows a professional attention to detail.
And as Devon says, it should be spelled out in the contract. But for those cases in which the contract is generated from the client side, you need to make sure it's added. That can help you to bring up payment and late fees without going down anyone's throat at the outset.
It can be a little delicate, because you don't want to come across as being more concerned about the money than doing your job. So I just bring it up matter-of-factly when we're discussing other details about the project. When I first started out, this was really hard for me, so I actually role-played it with a friend.
Good idea, Eileen! Makes it easier when you tell your friend to be a hard-ass, too. LOL I can just imagine my better half and I having this conversation – he's tough!