Collecting What’s Due to You

credit: Robert S. Donovan/Flickr

It’s enough to drive a freelancer over the edge: you work for hours and hours on a project, putting together something that you hope will knock the socks off of your client. Then, when the project is complete, suddenly something happens. The client doesn’t pay you. Maybe he’s just short on cash or maybe he disappears entirely — the details don’t matter so much as the fact that there’s no money in your bank account.

That puts you in the position where you have to go to some lengths to collect what’s due to you for the project you worked so hard on. Unfortunately, for many freelancers, the collections process is tough and doesn’t always provide you with the money your owed. The best thing you can do is prepare yourself to collect money before you have to actually go looking for it.

The Difference Between Small Businesses and Freelancers

Especially when it comes to questions like collections, the best freelancers recognize that we’re small business owners — we have to take a professional approach to the whole matter if we want to come out ahead. The problem I think some of face is that we feel that we’re too small to really get big fish to pay us what we’re owed and to go along with our contracts. There are a lot of potential pitfalls: a freelancer can think she’s just doing this on the side, just starting out, just a freelancer. Those thoughts can lead to a situation where a freelancer hasn’t taken any preliminary steps to protect herself.

It’s only when you think big — when you keep in mind that you’re a business owner and you need to make sure you get paid — that you’re going to be committed to taking all those steps ahead of time to protect the time you’re investing in a client’s project. That’s what it takes to make sure that you get a contract, a deposit and all the details necessary to track down a deadbeat client. And make no mistake, it’s the prep work that makes collecting from clients significantly easier.

Where’s the Client At?

When you find yourself in a position where you need to collect from a client who hasn’t paid your initial invoice, your starting point has to be determining where the client is at now. If the client just dropped off the face of the planet, you’re looking at a very different situation than if your client sent in an email that he just can’t afford to pay you immediately.

If you’re able to communicate with your client, you’re ahead of the game. With the number of freelancers working with clients from far off places, there are plenty of ways that a client can simply disappear. That’s probably the worst case scenario that a freelancer can face in terms of collections. You want to find as many ways o contacting a client as possible, especially if he’s not being particularly responsive through the main method you’ve been using. You probably don’t want to show up in person at your client’s office — there’s a lot of potential for causing bigger problems that way — but having more than just an email address is necessary if you want to get through to a client.

Work with the Client to Get Paid

No client — whether or not he pays his bills on time — thinks of himself as the bad guy. If you can present him with an option that lets him remain a good guy in his own point of view, you can often get paid even by a client who claims that there’s no money available. Presenting options like a payment plan can make a big difference to some clients. Of course, we’d prefer if we could just get paid on time and in full, but if you have to accept delayed payments, that’s better than nothing.

However, while clients tend to see themselves as the good guy, pretty much every freelancer has a ‘crazy client’ story. There are going to be situations where there just isn’t a lot of logic to work with, making it important to hold your ground. If you’re nice and easy to deal with, some crazy clients will just keep pushing. You should always stay civil, but if someone’s causing trouble, don’t be afraid to push back.

Lawyers are a Last Resort

Try every option in front of you to collect on unpaid invoices before taking the matter to court. It’s important to remember that court can be expensive and you may not even win, depending on why the client is refusing to pay (if, for instance, you don’t have a written contract, you’re going to have a tough time proving the matter). Even worse, if you’re not based in the same city as your client, you may not even be able to get the other party to show up at the local courthouse.

The more you can do without resorting to calling a lawyer, the better. Even a collections agency, which will take a significant chunk of what you’re owed, can be a better deal than the time and resources it takes to use small claims court to collect your money.