I have been pretty lucky as a freelancer and most of my clients have paid when they’ve been expected to. However, there have been a couple of difficult moments and learning how to handle the client whose wallet becomes recalcitrant after you deliver work is a key skill for a freelancer.
Don’t Start with a Scorched Earth Policy
Yes, it can be frustrating not to get paid on time but it pays to start from the position that the client is not out to ruin you but is instead facing other demands on their attention. Send polite reminders (say one every three days) for a couple of weeks before you start pursuing the debt with any stronger tactics.
Ask What’s Going On
If those reminders don’t bring results. It’s time to send the client a polite but firm e-mail. You want to ask why they haven’t paid. You should offer to fix anything that’s not working or hasn’t been delivered to their satisfaction. Don’t start threatening to take them to court here – just try to get them talking to you.
Respond to Any Responses
If the client has issues; address them. It’s worth noting that “we don’t want this anymore” is no excuse for non-payment though. If they have cash flow issues – talk about payment by instalments (this finally got me $20,000 in outstanding invoices over a 12 month period). Offer compromises where you think it might save you any further hassle. Be reasonable throughout.
Before going for legal action you want to decide whether it’s worth spending any more time fighting over fees. If the outstanding amount is $50 – it might be best to let it go and blacklist the client for future work. If it’s $50,000… then it’s going to be worth pursuing. You need to consider the costs of your time and any further action and then put them into perspective.
Now It’s Time for a Legal Action Warning
OK, if it’s worth pursuing and you can’t get the client to talk to you or work towards resolution; it’s time to send an e-mail again. This time you want to make it clear if the debt is not paid within X days – you will pursue legal action. You have to be certain you will follow through to make this strategy effective.
If there’s still no response get a solicitor or other party to create a letter on legal letterhead and send it registered post to the client that if they don’t pay – you will go to small claims or the appropriate court to recover the debt.
Take Legal Action
The last step in the process is simple; file a claim against the client and go through the legal process where you are. This is likely to be a reasonably short (in terms of time) process in much of Western Europe or places like Hong Kong, Singapore, etc. but may be much slower in other places.