As much as we prefer a smooth invoicing process every time, getting paid as a freelancer can sometimes be stressful.
A sad fact is that 29% of freelance invoices are paid late — and that's the best-case scenario. According to research from the Freelancer's Union, over 70% of freelancers have experienced trouble getting paid at least once. And freelancers lose an average of $6,000 per year to unpaid invoices.
When working for yourself or as a small business, missed payments can have a big impact. This guide will look at why clients let payments slip and how to recover any missed payments quickly and effectively.
When a client is late with a payment, it can be easy to assume the worst. However, there are often perfectly reasonable explanations for why they've fallen behind.
It makes sense to hand over all your work before getting paid when you're just getting started in the freelancing world. After all, if you're not providing the deliverable, why would anyone pay you for it?
Unfortunately, giving your client the completed product before payment allows them to lose the motivation to pay you. They already have what they want, and paying you is a secondary concern. This is rarely intentional but can be frustrating for freelancers looking to get paid for their work.
While your entire experience with the client is based on this one piece of work, it can be just a tiny piece in a much bigger puzzle for the client. With that in mind, you can see how easy it can be for your client to forget about paying you altogether.
Now, we're not saying it's not highly annoying — because it is. But remember that behind the company are human beings, and we need to treat them as such.
It's the oldest excuse in the book, but it's more likely than you may realize. Think about your email inbox. As much as you may try, it can be easy to miss a single email. While email platforms do their best to flag essential emails that include invoices, those emails can still get lost in the chaos of forwarded messages and occasional spam.
If you're working with large companies, the person you're communicating with may not be responsible for paying invoices. If you're talking to someone from marketing, it's unlikely that they can pay you directly.
Being ignored is the first thought for anyone trying to collect a payment, and it's a challenging situation. Thankfully, this scenario is rare, but it does force you to consider a few things.
Did the client not like the work? Can they not afford to pay you anymore? Did they think that hiring a freelancer would offer an easy way to avoid paying altogether?
None of these are excellent outcomes, but all is not lost.
Trying to get paid as a freelancer can feel a little awkward. Cash flow can be easier for larger businesses, but we aren't always afforded that extra bit of buffer space for our finances as freelancers. Being stiffed by a client can have significant financial implications for a freelancer, so we shouldn't be afraid to approach clients about getting the money we've earned.
Always remember: you did the work, and you deserve the compensation. So let's look at how to get paid from even the most stubborn clients.
One of the best things you can do as a freelancer is to be completely transparent, especially with your fees. Set expectations early by talking with your client, and whenever possible, send your invoice before you get started on the work.
As we mentioned earlier, it can feel like you need to send the entire project before receiving payment. While some clients may be stubborn and ask for this, many will be understanding if you tell them you will be waiting for payment before sending the final product. Delaying final delivery is extremely common in many industries like video and audio work but can be less common in the writing sector.
There are ways to get around this so that your client can see the finished project but not use it before paying. This can be as simple as showing them a portion of work that gives a complete idea of the quality or including watermarks.
No matter what you use in this situation, remember to be fully transparent with the client. The goal isn't to annoy the client but to nudge them towards payment.
Late fees are common practice with most contracts that require payment. Almost every sector uses some form of late payment fee, making it a familiar concept for businesses.
Late fees are an excellent tool for freelancers because they can often result in a prompt or larger payment. Many freelancers with a late fee clause see faster payments without sacrificing client relationships.
If you're able to do so, early payment rewards can also be an excellent motivator for businesses to pay you quickly. For example, rewards could be a discount on future work or even a discount on the invoiced product when paid in full.
For example, you could set up a system that will charge a company a percentage of the invoice per day if payment is not received within 30 days. Meanwhile, those paying within 48 hours will receive a small discount on the services provided.
We've already looked at how late payments don't always mean you're being ignored. Maybe you're talking to the wrong person, or the invoice got lost in their inbox. The truth is, we don't know why an invoice hasn't been paid until we ask.
This is why following up on unpaid invoices is so essential. It may seem like you're being overbearing, but you're just trying to get what you're owed.
You can refresh the client's memory and give your invoice another chance to be seen by following up. You can check that the client is happy with the work you have provided, discover if your invoice wasn't clear enough, find out if you're talking to the right person to get you paid and annoy them (just a little bit!) if they're holding out.
If you find yourself sending multiple follow-up emails, consider offering an ultimatum. Offer the client a clear and final date to pay you and reference potential legal action if they continue to hold out.
More often than not, you'll be emailing your invoice to a different email address than the one you're using to communicate with your client. This can make it easier for your invoice to slip through the cracks.
Thankfully, this issue is easy to solve. Inform whoever represents your client and let them know you have sent your invoice. Or include all relevant parties in CC when sending in your invoice, so everyone sees it simultaneously.
Of course, chasing an unpaid invoice can take a lot of time and effort that you could be putting into getting new clients or working on new projects. That is unless you use an automated invoice collection service like InvoiceRecover.
With InvoiceRecover, you can automate many of the processes involved in getting paid as a freelancer, even with clients that are late on payments.
Our system can automatically send out emails, texts, and calls to collect from your clients on your behalf. Clients can quickly and easily pay through our zero-setup payment forms, and we don't stop working until your invoice is paid.