What’s on the iPod: Yes, I’m Cold by Chris Bathgate
One hour, hundreds (maybe even thousands) in savings: Join Anne Wayman and me and special guest Julian Block, tax expert extraordinaire, for the 8 Top Tax-Saving Strategies for Freelancers webinar. Special pricing: the one-hour webinar plus nearly $375 worth of freebies for just $39.95! Get your spot before it’s gone: Register here. Special bonus: One lucky winner will receive a copy of my Marketing 365 e-book and another winner will receive any of Anne Wayman’s ebooks.
How was your holiday? It’s one of my favorites. No presents, little drama, and all about food. It’s work, but it’s work I enjoy. I hope you spent the time in a way that warms your heart.
Because we learn by example, I want to present a new twist on the contracts and payments portion of our theme this month. Let’s take a hypothetical situation:
Your client has contracted with you for certain projects. In that contract, you’ve agreed to deliver projects at the client’s request at your agreed-upon rate. You get to work, deliver the projects, and send the invoice.
Fast forward four months. You’ve just sent your third invoice to the client with no response. At all.
File a claim in small claims court
Contact the collection agency
Give the client one last try
Let’s assume you’ve chosen the third option. You get back in touch, tell the client you’re about to commence collection procedures, and would love to see this cleared up in a more civilized fashion. Surprise! Your once-silent client reappears, excuses (or reasons) in hand, and promises payment.
Then it happens. Your client says “I’ll review the work and get back to you. And I won’t be paying the late fees.”
You want this to end, so it’s tempting to let those comments slide. However, a few things are amiss here. First, your client is assuming two very erroneous things:
That he doesn’t have to pay for work he didn’t like or use
That he doesn’t have to pay a late fee because he’s cooperating or simply doesn’t see the need
Here’s why that client is wrong on both counts:
The contract terms. If your contract is like mine, it doesn’t state that the payment due is any less than stated or dependent on the client’s discretion. You do X. Client pays Y. End of discussion. And you definitely need to state clearly what the contract states.
Late is late. Even if you have no late fees mentioned in your contract, it’s reasonable to charge clients who are late for the inconvenience of waiting for the check.
Clients are not dictators. Nor are they revising the terms or changing their minds or anything that goes against what’s stated in the contract. They signed it. Their chance to amend was before the ink hit the paper.
Precedent should rule. You are a business as they are a business and you have to treat each client in the same manner in order to set precedent. That’s important should any of your clients require you to take further legal or debt-collection action. If you show you have a invoicing/collection process that is the same for each client and one you practice regularly, you’ll establish yourself as the business you are in the eyes of the law (and other clients).
In responding to clients who are not paying and trying to restate the rules, be clear on contract terms and be firm in your response. Also, remove emotionally charged phrases such as “You never answered” and “Had you bothered to respond.” That inflames an already uncomfortable situation and does nothing to get you to the end goal, which is to get payment in full for your work.
When was the last time a client has either refused to pay or used other tactics to reduce or eliminate payment?
How do you respond to late payers and clients who twist or argue the contract terms?