According to research, more than 50% of freelancers in the US have experienced not being paid at least once.
This same study also revealed that irregular income is a key issue for freelancers.
Other findings revealed that 40% of business owners are negatively affected by late payments. As a freelancer, late payments can impact your day-to-day living, your financial planning, and take time to collect.
Following up on an unpaid invoice often involves sending the client multiple reminders. If they pay a portion but not all, you'll have to start sending them statements, which is another time suck.
The more time you spend on tracking down late payments, the less time you'll have to knock out those projects, look for new work, and gain experience.
Fortunately, there are several things you can do to get paid on time.
What's more, even if you still encounter the odd non-paying client, these hacks will drastically reduce the amount of time you have to spend on collecting your invoices.
Ready to start getting those freelance invoices met promptly? Keep reading as we share the best strategies you can implement for getting paid on time.
When you're eager for more work, it's easy to jump at projects without researching the client. However, scoping out new clients before you take them on can pay off.
If you can find out what their reputation and track record is around payment, you can make an informed decision about whether you want them as a client.
Research shows that 29% of freelance invoices are paid late, so taking the time to back check your client is worth the effort. This is even more so if you are a woman, as shockingly, 31% of female freelancers' invoices are paid late—compared to 24% for freelance males.
There's no point in spending time trying to find high-paying freelance jobs if your invoices aren't going to be paid.
Therefore, make it a point to ask around about local clients and check review platforms like Glassdoor for online employers.
Most successful freelancers will tell you that creating a contract for each client and project is essential.
Having a clear and detailed contract in place reduces the change of disputes. Sometimes, the root issue behind an unpaid invoice stems from confusion around outcomes and deliverables.
If you can refer to your contract and clearly show the client that you have met all the outlined expectations, this will eliminate one more obstacle to getting paid.
Looking for a streamlined way to create contracts and project outlines? This is one of the many capabilities Moxie offers.
One of the secrets to getting freelance invoices paid is to send them out promptly. As freelancers, we wear many hats. Things like invoicing and business admin can often suffer as a result.
However, you must make it a point to invoice clients as soon as possible. If you are invoicing weeks after a deliverable or project, your work won't be fresh in the client's mind. If your invoice isn't current, it is a lot easier for clients to forget to make payment.
What's more, invoicing late can also exacerbate any confusion over deliverables. If the client can't remember what they're paying for, there's more likelihood they'll question the invoice or be tardy with payment.
Feeling like you're the victim of some low key client ghosting? If so, don't feel bad to send regular reminders.
In most cases, it's hard to tell if you're being ghosted or if the client is genuinely unavailable. Either way, it's important that you keep sending reminders about your unpaid invoice.
Just ensure that you keep things civil and polite. The last thing you want to be doing is sending a client angry or threatening emails, only to find out their mother died, and they haven't had the chance to attend to business communications.
If you don't want to be that freelancer not getting paid, another step you can take is to use a professional invoicing tool.
Many freelancers rely on creating offline invoices with programs like Photoshop or even MS Word and then emailing these to their clients. While this gets the job done, it doesn't streamline it.
With a pro invoicing tool, like Moxie's, your invoices will be:
Instead of creating a new invoice each time, you can seamlessly create, track, and send out all your invoices from one central place.
What's more, with good invoicing tools you can set up automated reminders and statement sending to clients who haven't paid yet. Not only is this great for freelancer productivity — but it also has the advantage that it looks less "harrassy" and more business-like.
Automated, templated reminders for an unpaid invoice will keep your client notified that they need to pay, without the personal element of writing the "you still haven't paid me yet" email.
Besides being more professional and streamlined, some invoicing tools (such as ours here at Moxie) make it easy for clients to pay with clickable "pay" buttons that have a credit card/ACH facility.
Making freelance invoices as easy and quick to pay as possible can help clients be more prompt in meeting them. If clients can easily pay on the spot, there's less chance that your invoice will fall to the bottom of their to-do list.
If you hate having to wait months for an unpaid invoice to come in, make provision for this in your freelance invoice templates. Instead of giving clients generous terms, set shorter payment terms.
If your invoice states that a client has a week to pay, they'll be more motivated to get the payment done than if the terms are a month. Once again, this stops your invoice from drifting to the bottom of client's mind and to-do list.
If your projects are of a size where short payment terms would be unfair, you can also consider breaking up your projects and charging by milestones. This way, clients get frequent, smaller invoices to pay.
This can be more manageable for their cash flow, and it also keeps them up to date with what they owe.
Besides this, charging by milestones also protects you from potential non-paying clients. When clients don't pay, it's much better to have them only owe one small invoice than a massive one for a whole month's worth of work.
What's more, it also makes it easier to stop working the moment you suspect you're dealing with non-paying clients.
Besides being persistent with an unpaid invoice, you should also try multiple contact channels. Even if you suspect that there's some client ghosting happening—it might be that your client simply hasn't seen your email. Therefore, make sure that you also contact them via other means.
What's more, don't hesitate to phone your client and speak to them. If your client is having cash flow issues and can't pay right away, talking to them on the phone can establish a personal connection and get them to open up about the reason they're not paying.
If you find out they're having cash flow problems, you can then agree on a way for them to pay off the outstanding amount and discuss how to move forward with any outstanding work.
When setting your rates, it's always a good idea to stipulate in writing that interest will be charged on late and unpaid invoices.
This establishes the expectation that late payments will trigger interest after a set point. When clients are aware of this, they'll be more motivated to pay your freelance invoices on time.
What's more, when you do have to charge interest on an unpaid invoice, it won't seem like you spontaneously decided to bully them into paying by levying interest.
Besides charging interest to non-paying clients, you can also consider rewarding swift payment. You can set out the terms for this in your rate sheet so that clients know what they can gain if they pay promptly.
For example, you could offer clients a 5% discount on their next invoice if they pay before a certain date. Not only does this motivate fast payment, but it also incentivizes clients to use you for future projects and claim their 5% discount.
If you take on large projects, it's often a good idea to request a deposit, especially from first-time clients. This can mitigate any losses you might face from an unpaid invoice.
Of course, if clients don't know you, this might raise concerns on their side of being scammed. One way you can set clients' minds at ease is to provide testimonials, references, and a portfolio of previous work to show your integrity and skill.
If a client still does not feel comfortable paying a deposit, you can also offer them the option of milestone payments.
As mentioned above, milestone payments are something you should look at doing anyway, especially with large projects. A great way to combine these two strategies is to ask for a smaller deposit in combination with a milestone payment set up.
Not only does this help you avoid large losses from a big unpaid invoice — but it also creates better cash flow, something that can be notoriously tricky for freelancers.
Some projects might involve expenses that you pay and then invoice your client for. If these expenses are large, it's a good idea to instead get clients to pay for them directly.
This means less money owed to you, which, once again, reduces the chance of a large loss from an unpaid invoice. Likewise, it's also better for your cash flow.
If you're being subjected to serious client ghosting and realize that you're working with non-paying clients, it might be time to step things up a notch.
One way to show you mean business when clients won't pay is to send them an attorney's letter. This is pretty simple and inexpensive to do and can often trigger non-paying clients into taking you seriously and meeting that unpaid invoice.
If an attorney's letter doesn't produce results, the next course of action is to take non-paying clients to small claims court.
All states have a small claims court system, and they are typically easy and cheap to navigate. For one, you are not required to have a lawyer, and the process is relatively swift.
Small claims courts typically handle claims under $2,000-$7,500. The amount differs widely by state, so it's wise to look up your state's limits.
If your claim amount exceeds your state's limit, you can choose to claim the maximum amount allowed and waive the rest.
Before you start a claim against non-paying clients, ensure that you check your client agreement for an arbitration clause (also known as a dispute resolution clause). If one is present, then you're required to settle the claim through arbitration and are not allowed to sue in small claims court.
While this might sound like a disadvantage, it isn't necessarily. You'll have an arbitrator rule over the claim, and arbitration judgments can be enforced in the same way regular court judgments are.
Hounding clients over an unpaid invoice can be exhausting, infuriating, and detrimental to your cash flow.
As a freelancer, it's important that you do all you can to make sure your clients pay on time.
Here at Moxie, we know how tricky it can get keeping track of projects, clients, invoices, and payments. This is why we created Moxie. With its easy-to-use dashboard, you can manage all of your projects and clients, effortlessly create invoices, and send automated payment reminders.
The platform also allows easy contract and proposal building, time tracking, metric monitoring, and one-click access to experts and a community of fellow freelancers.
Does this sound like the solution to your freelance struggles? Start today and start streamlining your freelance business.
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