I was reading a post over on Anne Wayman’s site on preparing invoices. One of the commenters posed the predicament of collection. He wondered aloud (and then said what he’d do) how one goes about collecting. While I love his response: “…kick his butt” it has some impractical applications in the real world. Figuratively, though, he’s right on the money.
I then thought about the last time I had to worm payment out of a client. Maybe a year and a half? I can’t remember. Whenever that was, it was late, but not so late that I was considering litigation. I did have a small issue a month or so ago, but a reminder and a follow-up took care of it quickly. Why do some writers have a tougher time collecting than others? Here’s what may be going on:
The writer is too nice. If your electric company approached your late bill in the following way, you’d not take it seriously: “We noticed you haven’t paid our bill yet. Can you give us an estimate on when you might be able to do that?” Toughen up, writers. If it’s late, remind them. If it’s really late, remind them strongly with a nod to your preferred collection method.
The writer’s rate is too low. Not that this is doesn’t happen at a higher rate, but the majority of my issues came when I was charging much less than I am now. If your clients are hassling you about payment, raise your rates. You’ll lose problem clients (they’re problems if they don’t pay on time), and you’ll attract a more serious clientele.
There’s no contract in place. You know you still do it. You work without a contract because someone seemed nice or the work seemed simple or you were referred…. You know it, I know it – working without a contract is working without a safety net. If you’re hired by someone in email and you’d rather not do the contract (hey, it’s your funeral), then send an email that states clearly the terms as you understand them and don’t start any work until that client responds in agreement. For small jobs, that may be enough. The point is establish an agreement between you and your client.
The client never intended to pay you. You’ve done everything right, yet the check never arrives. There are clients who have absolutely no intention of paying you, or they figure if they outlast you, you’ll forget about it. Crazy. I had that happen once. When the payment was 60 days late, I sent my final invoice. The response was the oddest to date: the client called and instead of discussing my invoice, he tried to talk me into joining his affiliate program. Huh? Worse, he thought I’d love to spend $500 to do so, which wouldn’t have even touched the amount he still owed me. I hung up and re-sent the final invoice giving him ten days to pay before I filed in court. He paid on day ten.
How often do you have clients hassling you for pay? Are there repeat offenders in your client lists? How does that affect how often you work for them? Have you raised your rates and seen the issue dissipate?
13 responses to “Invoicing and Butt Kicking”
The contract needs to spell out, in no uncertain terms, the consequences of non or late payment, such as the 20% cumulative late fee.
Late clients sometimes try to get you to settle for less than the agreed=upon fee, contract or no contract.
The plumber wouldn't — why should you?
We are word plumbers. We clean the psychological septic systems to potential customers are open to the company's product.
The psychological septic system – there's a image! LOVE it. 🙂
Agreed. Get it in writing at the start and enforce it.
Thankfully I haven't had to chase payments very often. When I have, it was usually the final confirmation I needed to not do business with them again, so there have been no repeat offenders.
I have been too nice to an editor who avoided paying me for months until I put nice away and had to get tough. He was taking advantage of the friendly relationship we'd built during the three years I'd written for his publication.
Once I realized what he was doing (and that he was doing it to other writers) I got tough and sent him an email demanding payment within 10 business days clearly spelling out the repercussions if he didn't comply. I received a phone call the next day from the editor profusely apologizing and informing me of the projected date that I would his payment in the mail. It arrived as promised, but learned soon after I was the only writer who received payment.
Does the invoice structure have any bearing? I put together a generic invoice using googledocs and was wondering if having a program generated invoice is more authoritative? Do most freelancers have payment plans? And do you require an upfront payment? I'm full of questions this morning, but I'm always curious how other people do it.
Hey Lori, did you find a pic you could send me? Thanks!
The one or two clients I've had who've played fast and loose with their own payment terms (as stated in the contract) share one common trait: They assume freelance writers all have other sources of income. I make it clear that they are dealing with a professional, not a dilettante. My freelance income is 100% of my household income, so I can't mess around with late-payers.
One thing I'd like to know, though, is how to figure out late fees that are compounded daily (or whatever). What percent and how do you calculate it? (Remember, I stink at math.)
BTW – Lori: Massive bow echo blew through before 7 AM, knocking out power to more than 660,000 people in N. Illinois. We had an 80-mph gust reported in my part of town. I was lucky. One small branch off a huge tree and my power, phone, and cable are still working!
That's emotional blackmail, Kim (on his part, not yours), and you're smart not to fall for it. Friendship is valid until the check bounces or doesn't arrive. LOL
Wade, I use my own Word document. Just a simple file with my name, address and contact info (NEVER the SS#), and To, Deliverables, and Amount Due. I include a note at the bottom to pay upon receipt to avoid late fees. That changes if they are late to a litigation notice.
Paula, here's Lori's really simple-yet-accurate calculation for compounded interest (really simple – I'm not a math whiz, either) — say they owe $1,000. Your late fee is 20 percent, so they now owe you $1,200 (.20 X 1,000 on the calculator). If in 60 days they haven't paid yet again, you'll assess the late fee on top of that new total (.20 X $1,200). That's what they owe you to avoid litigation. 🙂
Wow! You guys have seen the weather this year, haven't you?
my contracts actually say 'if you stop paying, I stop writing.' They also say 'if I stop writing you stop paying.' I don't have collection problems… my clients seem happy to pay me… are happy to pay me.
And thanks for the link!
I think that's fantastic, Anne. No room to misinterpret that!
Wade,
For the bigger projects, there should be an upfront fee or deposit fee, which says that nothing gets done until you receive that payment. If I'm doing something like an eBook, there's usually a mid-way payment and a final payment along with the deposit. Plus, I retain the rights to it until the final payment is received and clears the bank. It's stated in the negotiation stage and laid out in the contract that they sign. Of course, it's up to you, but I learned from being burned.
Thanks Wendy, this is something I need to consider.
Sorry Wade – I missed all your questions. I was wrangling with Blogger again. 🙁
Thank you, Wendy, for helping Wade out. 🙂 I'll add this – for that final payment, put an end date to it. I had a client once who took a year to get the project done in his mind. Because I hadn't stipulated that payment came at say March or May, I had to wait a year for final payment.
Wade,
I created my own template. On the bottom, it reinforces the relevant contract terms, such as the 20% late fee, the cumulative nature of the late fee, and, if needed, the payment schedule.
Depending on the project, I either ask for 50% up front and 50% upon delivery of the finished project (which usually includes two rounds of revisions). Additional revisions or change of direction are billed at my regular hourly fee. That's both in the contract and on the bottom of the invoice. Larger projects are 1/3 up front, 1/3 at a PRE-AGREED, contracted midpoint, and the final 1/3 at the end.
Paula — I use Lori's formula. I'm not credit card company, so I don't compound daily interest. At the end of 30 days, it's X fee, wait another thirty days, the next 20% is tacked on to the original amount + original 20%, and so on.
Usually one late fee tacked on does the trick.
Lori & Devon, thanks for explaining how you handle the late fees. On your invoice (or in your contract) how do you refer to, as Devon said, the cumulative nature of those fees?
Lori: I ordered myself a weather radio. Same one that was so hard to find my brother for Christmas. It was even on sale – $5 less than his cost. I had to get the same color (pretty metallic cranberry red) since the other colors weren't on sale. Free shipping too! (You know how I love free shipping.)