The Most Frustrating Types of Late-Paying Clients and How to Handle Them
Most of us have been there: you land that dream client. You’re excited beyond belief and they’re equally excited to work with you. They’ve agreed to pay you what you’re worth and you get it in writing. Clients don’t always turn out to be perfect though. For some unknown reason, they become the client from hell and decides you are only worthy of a portion of the agreed payment, if they pay you at all. What gives?
It’s any number of reasons. They might be someone who’s never satisfied no matter how stellar the work is. They might be well-intentioned but always pay late (for reasons that I’ll get into), or they are a crook who leaves a pile of unpaid freelancers in their wake. It can be hard to know exactly.
This is a topic that I could pontificate on for days, but, for the sake of time, I’ll lay out four basic types of non-paying clients and how you can deal with them.
1. The One With Good Intentions
These are clients who may have a good reason for not paying on time.
These folks sometimes have an excuse as to why payment will be late. Other times they are just not that communicative about it because they might be embarrassed. Often this is because of cash-flow. This type of client might even write you a check and ask you not to cash it until they give you the OK.
I once worked with a very nice woman who was always roughly one to two weeks late with payment. She swore up and down that she’d pay me, but that day was always significantly after the day we had agreed upon.
What do you do in this circumstance? Well, I adapted and worked around the lateness, so it turned out not to be too disruptive. If you truly enjoy working with a client, you may be willing to put up with something like this. In situations where you aren’t willing, ask the client to make portion payments. This should help your cash flow, along with theirs. You might suggest that they pay 10 percent immediately, 20 percent the next month, and on until they are paid in full. Confirm this timetable in writing. This is very important so they can’t weasel out of paying you again.
You might also want to create a policy in your contract stating that the client is not allowed to use your completed work until you are paid in full. This is called “withholding copyright.” It will give them incentive to pay you on time and give you legal leverage should they violate your copyright.
2. The Disgruntled One
This client is generally unhappy no matter what kind of work you produce for them. They are generally unhappy with most everyone and even use it as an excuse for non- or reduced payment.
These folks will typically feel the need to withhold payment until they are satisfied with your work. To avoid multiple revisions and added work on your end, it’s important to have a clause in your contract that dictates how many revisions are allowed on a project. This protects you from putting in overtime on something that should’ve been simple and straightforward.
However, if you are responsible for an error, it might help to apologize, and adjust payment downward as needed. If you feel a change in payment terms isn’t warranted, determine if it’s worth it to you to argue or accept the pay cut. Ask yourself if you want to keep working with the person and preserve the relationship. Make sure you determine if there was a communication failure.
With email typically being our main form of communication these days, sometimes things get lost in translation. It’s easy for the client to think you’re going to deliver your product one way, but when they get it, they feel it’s much different than what they asked for. From your perspective, you might feel you delivered exactly what they asked for. Always confirm and reconfirm the details while you’re completing a job to prevent this from happening.
3. The Crooked One
These people just don’t pay you. For this reason, it’s important to include a clause in your contract requiring a certain percentage up front (go as high as 50 percent) before work commences and the remainder upon delivery. This way, if they end up disappearing, at least you got half of the money owed to you.
I might as well include a horror story that fits into this category. A good friend of mine recently engaged with a startup that told a tale of success and glory to not only its investors but the thousands of people who had already bought its undelivered product. My friend, in a display of good faith, went months without payment. Unfortunately, the company suddenly revealed that it was shutting operations for various reasons. My friend was left without payment after months and months of work. Don’t get caught in this trap. Ask for some kind of payment up front, or only deliver when payment is arriving consistently.
One final note on crooks — most freelancers have encountered them. You may realize they are rotten from the beginning. Follow your gut.
4. The Big Fish
These are big businesses that have longer pay cycles, sometimes 90 days or more, and leave you without payment for months just because they can. They set policies that help them, not you, and there’s not much you can do about it.
Always try to negotiate better payment terms. If you can’t, you can deal with this by having small clients on your roster who pay you on a more regular pay cycle, like every 30-days.
Nonpayment should never be an issue. If someone hires you it’s only logical that they should pay you. Sadly, this is not the case. Mostly it’s because many freelancers work without contracts. Never do this. Always have a contract so you have legal recourse should things go sour.
Have you had issues with nonpayment? What did you do about it