One of the greatest challenges any freelancer faces is how to get paid, on time, all the time.
Sure, there are good ones that are diligent with their payments. Clients who understand the struggles and risks creatives like us take. But for every one of those, there are two more who just don’t.
Deferred payments. Unfavorable terms. Frustrating roundabout excuses. Ghosted emails and messages. You name it; I’ve tasted it. Bitterly.
But from these experiences, I’ve learned some practical measures and steps you can adopt to make the ‘debt collection’ part of the job bearable.
No, they won’t get you paid 100% on time. But these actions are a step in the right direction. And some of them aren’t at all apparent or intuitive to those new to the game.
So here are five practical measures to help you get paid on time as a freelancer. I hope they help you, as they did for me.
1. Bash out those payment terms
This is your leg day. Never skip this.
Make it a point to negotiate contractual payment terms first, even if it’s a ‘next-day delivery’ deadline. Get all agreements in black and white. Your future self will thank you for it.
Before you even start work, ensure you :
- Set Payment Details: Clarify not just how much, but also how you’re getting paid. Is it a lump sum? Monthly retainer? Crypto or vouchers (yes, it happens)? Don’t “revisit this conversation after the work’s done.” Do it now, or wade knee-deep into problems later.
- Set Duration of Payment: This states the number of days clients have to make payments. It’s a deadline. It usually sounds like this: “Please complete payment above within 30 days”, failing which will trigger…
- Penalties and Late Fees: Which are unpleasant, but necessary. And it doesn’t have to be crazy; some recommend a 1.5% interest or more. I charge a flat rate for every late month. Make sure your client knows this by clearly stating it on your invoice boilerplate.
Hashing out your payment terms early on means fewer back-and-forths with client HR or finance and a smoother path to your paycheck.
2. Understand your client’s internal processes
This is important and often overlooked.
Most freelancers forget that a transaction is a two-sided process. You’ve delivered the end of your bargain by submitting the goods to your client. But only then does the huge machinery of the financial process and due diligence begin sputtering to life on your client’s end.
This problem is more endemic with larger clients, less with medium businesses and startups. But for all, standing in the way of payment are internal rules, departments, contracts, and agreements that need to be reviewed, signed, and submitted. Some are necessary compliance but delay payments significantly.
Every business has its processes and systems. Ask your clients what these are early on, and see how you can work with them to accelerate approvals or tailor your invoices for clarity. Adhering to their system removes most barriers towards getting paid.
3. Provide alternative payment options
On most occasions, PayPal works. But what if it doesn’t? As a freelancer, we need to get paid even if the platform doesn’t work.
For months, I’ve been dealing with a client that claims that her corporate credit card rejects transactions with my PayPal.me business account. Apparently, it also has something to do with corporate policy — whatever.
This is only a significant issue for me because most of my clients are abroad. Cross-border transactions are a complicated affair. Even if your clientele is mostly local, it pays (sorry) to look into this. It would be beneficial when you inevitably expand outward.
If you want to get paid, make it easier for clients to do so. Having multiple payment options and accounts is that first step.
Alternative payment platforms, like Stripe and TransferWise, are shaping up to become viable options for freelancers. They offer real-time currency exchange rates and competitive fees, which is a plus for all involved.
Alternatively, if you have a friend or relative living in the same country and your clients, you could ask for your help too. I consider this as a last resort but do what you gotta do to get paid.
4. Don’t be shy to follow up frequently
Your clients are busy people. Between business meetings, internal tasks, investor pitches, and conferences, ‘paying the freelancer’ tends to be at the bottom of your client’s to-do list.
Once every fortnight, I make it a point to shoot my clients an email reminder for a previous invoice. If we’re chummy, I shoot a quick text. I try to be consistent, but keep things cordial and friendly.
Usually, they respond right away. But above all, don’t be agitated, obnoxious, or demanding. Your clients may have many things on their plate; they could be wrangling with internal processes or personal problems.
Follow up, but be kind and empathetic, because this may even lead to the following.
5. Make friends on the inside
Nurture mutual trust and respect with clients that are willing to do so. If possible, try and find a balance between being professional and being friendly.
There are several good reasons to do this.
Firstly, you’ll have an easier time dealing with them. More candid conversations about payments are possible. Mistakes can be settled efficiently. Misunderstandings can be clarified speedily. And, it sucks less to follow up.
Secondly, I’ve seen fellow freelancers benefit when their internal contacts get promoted. You’ll get an influential ally that’s invaluable in helping you grease the wheels of finance along. Plus, the whole thing may lead to more business, which is nice.
So how do you build these ties with your clients? Well, how do you become friends with anyone?
- Respond warmly when they reach out to you
- Be civil and professional with your conversations
- Remain calm as they request more changes to a project
- Congratulate them for their achievements
- Provide them more value, where reasonable
It’s depressing when freelancers take the ‘us versus them’ stance when dealing with clients. Especially when it comes to payments, it’s a terrible way to do things. And it gives freelancers a bad rep.
But that’s because the alternative — establishing a good rapport with your clients — is way tougher. It’s hard to find nice clients you can work with.
So flip that around. Be that one nice freelancer they can work and deal with and see if that plays out to your financial advantage – it will certainly help you get paid.
Five practical measures you can immediately action to create more consistent cash flow for your freelance business, and to make sure you get paid as a freelancer. And yes, some of them will take some time and effort to implement.
The alternative is a constant cat-and-mouse chase with the client. You decide if that’s where you’d like to spend your time. If you’re new to the freelancing game, I’d advise you don’t chose the chase. You’ll make many mistakes as a freelancer, so don’t make losing out on due-payment from clients one of them.