You might think that simply finding clients, jobs or gigs is the hardest part of being self-employed. While it is true that this is a major hurdle, especially early in your freelance career, you may find yourself facing another one as well: dealing with clients who try to back out of agreements or avoid paying you for work after you have completed it. Unfortunately, every freelancer has to deal with this problem occasionally, but taking these precautions can help minimize how much it affects you.
- Do Not Deliver Work Until the Payment Has Been Set Aside
Some clients will attempt to use your work without paying for it. It is more common, however, for a client to have second thoughts about holding up their end of their agreement with you after you have held up your end. To minimize the risk of this happening, use an escrow account or go-between service to have payment set aside before you start work. It can then be held until your client receives the work they ordered, then automatically sent to you. Of course, this might not be possible with some direct clients. However, many freelance writer associations are available that connect writers and clients and protect both parties. One service that these types of associations offer is holding payment until work is completed. (Ed. Note: This one would not fly with most of my clients so in cases where we’re using my contract, I stipulate that they do not own the copyright until I receive payment. That way, if they refuse to pay me, then they can’t use my content!)
- Require an Initial Deposit
Simply requiring a portion of your payment in advance will significantly reduce the risk that your client will attempt to avoid paying you what you are owed. Between 25 and 50 percent of the entire project amount is typical for a deposit. Make it clear in the contract that this deposit is nonrefundable; if your client tries to abandon the project, you keep the money they have already paid you. You may decide that requiring a deposit is unnecessary with small or one-time clients, but it can be very helpful for ongoing or larger projects.
- Be Patient and Professional
Dealing with a client who is attempting to avoid paying you the amount they agreed on can be extremely aggravating, especially since it can feel like they are trying to prevent you from providing for your family. Losing your temper, however, will not help the situation. Be patient and give yourself time to think before you say or write anything to the client. Communication is key to resolving the issue.
- Offer Flexible Repayment Options
Of course, clients that have the best of intentions to pay you for your services may run into some type of financial difficulties that interferes with their ability to do so. Being flexible and understanding about this fact can improve your relationship with this client, as well as your odds of actually receiving the money you are owed. For example, you could offer some type of payment plan or a similar arrangement. (Ed. Note: I accept PayPal because it’s easier for some clients to send money through PayPal than write a paper check. And PayPal is faster, too.)
- Support Efforts like the Freelancer Payment Protection Act
The Freelancer Payment Protection Act is a bill that was considered in the state of New York, although unfortunately the session ended without passing the bill. It would have facilitated enforcement of payment agreements between freelancers and their clients. If a client tried to get out of paying what they owed, the freelancer in question could report the issue to the New York State Department of Labor, which could then enforce the agreement. Many in the industry feel that this type of measure would help provide freelancers with the same protections other professionals already enjoy.
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