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    4 Things Freelancers Should Do To Avoid Late Payments

    November 17, 2015

November 17, 2015

4 Things Freelancers Should Do To Avoid Late Payments

Make clients Pay On Time

According to recent market studies, the trend of late payment from clients seems to have increased significantly. Many authorised sources, like The Wall Street Journal, have confirmed that small businesses are going out of cash especially because the big clients are delaying their payments extensively.

According to the Wall Street Journal story, a small web development business owner had to postpone his business expansion and hiring plan because of cash crunch. One of his clients, which is a big online retailer, cleared his invoice of $6,600 after 404 days from the date of the invoice.

So, if you’re a freelancer who look forward to establishing an uninterrupted and smooth payment cycle with your client, you will have to make sure you’re taking the invoicing system very seriously. Here’s some mojo on How to Avoid Late Payments:

Understand the Late Paying Clients


Freelancers Union suggests the first thing a freelancer should do is understand the different types of late paying clients to better handle the situation. According to Freelancers Union, you’ll find primarily 4 types late paying clients.

One is the well intentioned nonpaying clients who will always find plenty of reasonable explanations for being unable to pay on time. You will have to maintain 100 per cent clear and transparent communication to be able to handle this type of situation. Tell the client to make payments in small instalments rather than paying all at once.

Then there will be unhappy non payers. In this case, the client would like to withhold or reduce the agreed payment as he is not happy with your work. You will have to figure out a mutually agreed term to fix the situation.

If the client is a serial non payer, it’s better you ignore working with them. These types of clients would like to keep their freelancers waiting for the payment with no justifiable reason.

There will be big corporation non payers who can keep you waiting for the payment for months. These types of clients usually have 90 to 120 days payment cycle. In this case, you should talk and plan a simple and short payment cycle before you start working with them.

Try FreshBook Tips on How to Handle Late Payments


FreshBook is an online billing service. According to the CMO of the company, freelancers should be very punctual about their invoicing system. They should prioritise and organise the invoicing system to delay the payments. Be polite to the clients and request the payments.

Establish an electronic payment system to fast track the system. Take yours and client’s time seriously and try to be specific about the payment timeline.

Help Client Remember Your Invoicing Cycle


According to ABFA (Asset Based Finance Association), small businesses in the UK are suffering the most when it comes to late payments from clients.

Their study shows that businesses with less than 1 million annual turnover in the UK waits for average 72 days to get their payments from their clients.

So, you should not take the matter lightly. You should always send the client reminders to take a look at the invoice and clear the payment. Send clients automated reminder emails.

Develop a Reward and Penalty System


Design a reward system to encourage the client pay on time. Maybe, you can offer a bit of extra service for on time payment. On other hand, you can also build a strict payment policy. Like, you can retain the right to withhold the copyright of the work until the clients clear all the due payment.

So, this is how you ensure quick payments from your clients. Would you like to share what you think have worked the best for you?


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