5 Ways Freelancers Can Steer Clear of Deadbeat Clients

Updated on October 11th, 2021
Handling a Potential Client or Customer With Bad Credit

As a freelancer your number one goal is to keep clients close. If you run out of clients, have deadbeat clients, or run out of work, there’s not much to fall back on.

When it comes to picking clients there’s something big to be said about quality over quantity. The last thing you want on your hands are deadbeat clients. A client who doesn’t pay up or on time can seriously hurt your cash flow.

Here are five ways freelancers can steer clear of deadbeat clients.

Do Your Research

Especially for new freelancers, it’s common to jump on every job that comes your way. This is a big mistake. As you prospect new clients or handle inbound requests it’s imperative that you always do your research.

Use tools like LinkedIn and the Better Business Bureau to get a feel for the client. You’d be surprised how much you can find online about a business or an individual. If you see any red flags it may be best to avoid engaging in work with the client.

Be Clear About Your Policies

If you’re starting an engagement with a new client you need to be crystal clear about all your policies. You can’t let your clients use ignorance as an excuse, especially when it comes to payments.

Your policies should include your rates, overtime policies, due dates, late payment fees, workflow, timeline, and anything else you deem necessary. In addition these policies need to be in writing so you can refer to them at any point during the engagement. If you feel like a client is violating any of the policies you can remind them of the rule and penalty for breaking it.

Invoice Intelligently

One of the best ways to mitigate risks of late payments is to use an online invoicing solution. These platforms will allow you to seamlessly manage and track invoices sent out to clients.

Features like automated payment reminders and recurring invoices allow you to let the technology do your work for you. The more convenient it is for your client’s to pay the more likely they’ll get it done on time.

In addition you should make sure you set clear invoice and payment terms directly on the invoice so your client doesn’t have to dig around to figure these out.

Take a Deposit

Deposits are a great strategy to use when working with any client. An upfront payment provides you with working capital so you can confidently begin the project. In addition you’ll find out whether or not the client is fully invested in the project or not.

If a client is hesitant about putting down a deposit then they’re either not confident in your abilities or just aren’t that committed. Either way it’s not a good sign.

Keep Your Leverage

When dealing with clients the only leverage you really have is the work you’re doing for them. In cases that this is applicable you should always keep your leverage until you’ve secured the final payment.

In cases where you’re building a piece of software for a client you can put a clause in your contract that your client doesn’t own the intellectual property until the final payment is complete. This way you’ll hold all the leverage until that final amount hits your bank account.

Final Thoughts

Deadbeat clients can be a real pain in the ass. There’s nothing worse than chasing down clients for payments as a freelancer. That said use the strategies above so you can steer clear of deadbeat clients.

 

 

Chalmers Brown - Former CTO of Due

Chalmers Brown - Former CTO of Due

I'm Chalmers Brown and former CTO of Due. I'm a big fan of technology and building financial products that help people better their lives. I have a passion for financial products that help people. I build complex financial infrastructure protocols that help scale financial companies. They are secure and support millions of customers worldwide.

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