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You’ve done it. You got the client. You delivered the work. 💪

But then… they don’t pay. Every freelancer’s nightmare. But then not paying isn’t even the worst part about this. It’s the questions you’ll ask yourself. “What did I do wrong?”, “Was what I delivered so bad?”, “Maybe they didn’t like me.”, “Maybe I was rude on a calls.”

But before you ask yourself any of those questions, ask yourself: “How am I going to get the money?”

Welcome back to the Freelance Blueprint. I’m your host Lisi, a freelance UX designer and digital nomad. And today I’m going to talk to you about something that hopefully will never ever happen to you, but in case it does, it will help you get your money just incase your clients don’t pay you.

In this episode, I’m going to talk about what you can do to make sure you don’t fall into that situation in the first place. Well, there’s not always the chance thatwe can fully avoid it, but there are some prevention methods that you can useto make it less likely that it will happen to you. And then I’m going to talk to you about what you can do incase it does happen to you without burning any bridges.

If you didn’t get paid, listen to this

So, first I want you to know if you’re in a situation right now, if you’re listening to this podcast because you have a client that doesn’t pay you, I’m really sorry that you’re in this because it absolutely sucks. It adds to your endless to-do list and it’s a very uncomfortable situation to be in, but it happens more often than not.

Many freelancers can feel a little bit ashamed when it happens. And I definitely felt this way the first time one of my clients didn’t pay on time, but it’s not your fault. And sometimes there’s tons of reasons for it that have nothing to do with you.So, first, it’s completely normal. It will happen eventually. Hopefully, it will happen less often and less likely, but it does happen. It even happens to very seasoned freelancers. Like, I’ve been a freelancer for pretty much 6 years now, and I still have like last month I had an invoice that wasn’t paid.

So sometimes that’s just the case of the industry. It can very likely happen with startups because maybe they don’t have someone in charge with just invoices. It can happen with big corporates because there’s just so many levels of hierarchy and approval for an invoice to get approved and get paid. So don’t blame yourself. You cannot completely avoid it. But here are the systems that you can put in place to prevent it where possible.

You need a contract with payment terms

The most important thing is to have a proper contract in place. Have something that you and they signed about all the payment terms and that should include what they should pay you. If you have, for example, like a a one-off fee for the whole project, if you charge per the day rate, hourly rate, it should define what it is that they pay you.

Those payment terms should also define how long it should take them to pay you after you send the invoice and also ideally when you invoice. So if you have like a several stage project, let’s say you work on an app and you get paid for the wireframes, you get paid for the UI design, you get paid for the prototype, etc.

Are you going to invoice them at the end of the month or are you going to invoice them as you’re working on it?Are you going to invoice them as you deliver the work, which can be a bit tricky because then they already have what they need without you having the payment. So it would be easy for them to just take your designs and leave.

So I would suggest that you don’t go for that option in the contract or maybe they pay you a deposit. So you start on the next phase and then they pay you the rest after delivery. So it should define when you invoice them, how often you invoice them and how much time they have to pay you once they receive the invoice. So very common it’s like 30 days or 14days, 2 weeks. But some companies ,they’re like we just operate on a monthly basis. So, if you invoice us inJanuary, you’re going to get paid inFebruary, not within 14 days, but within30 days.

So, some clients, even if you put a 7 or 14 day payment period in there, they might renegotiate that with you. And then it’s up to you how much you want to work with that client and if you’re okay with that, to have that payment in 30 days or sometimes even like 60 days, which I would not recommend.

Late Payment Fees

And another thing you should have in your contract to incentivise them to pay on time is to have a late payment fee, which basically means if they don’t pay within the let’s say 30days, they have to pay X amount extra.You don’t have to enforce it. Sometimes it happens that the client pays like oneday late or you send them a reminder and then they’re like, oh, and they instantly transfer it. I would say stick to your boundaries and that’s up for you to decide.

When I started freelancing, even if they paid me like 10 days late,I was too scared to send a late payment fee. I mean, at the beginning, I didn’t even have a late payment fee, but I was a little bit worried about sending them a new invoice with the late payment fee because I didn’t want to feel like greedy. I didn’t want to lose the client. But in reality, you have your part of the contract that you deliver the work and they have their part of the contract that you pay for it. So if you stick to the contract, they should as well. So now that I have a little bit more experience, I would enforce it, even if it’s like one or two days late because it’s just unprofessional from them that they don’t pay you on time.But again, it depends on the client.

Like there are some clients that I’ve worked with for several years or like they come back for me with new work or for different projects and I don’t want to burn that bridge. So sometimes I let it go even though maybe it’s even a month late, which isn’t ideal, but It hink I’d rather put the client first and I want to make sure that they’re happy to continue working with me.

But if it happens several months in a row, I would definitely enforce the late-payment fee. Another way you can avoid them paying you late is by charging the money up front. Maybe not all clients would be happy to pay you the full amount up front, but you can negotiate a deposit. Let’s say you’re a brand designer and you have a certain set of deliverables. Before you even start working, you’re going to charge them 50%. Because you’re going to do theresearch, you’re going to do some questionnaires.

So, even if they don’t see any designs, any type faces, any colors whatsoever, you got the deposit because you’ve done the work. If they drop out, if they ghost you, you at least have the deposit. If a client is hesitant to pay you a deposit, that could also weed out the bad clients because if they’re unwilling to pay you that, chances are they will negotiate and they will delay payments and things like that. If it’s a good client, they have no problem at all with paying you a deposit to start the work.

The other thing that you can do is to always have the payment terms also in your invoice, not just in your contract. So, every time I send an invoice, I have a little clause in there that says, “Payment due within x amount of days, x% late payment fee applies.” So I do have this little small print and that’s clear on the invoice. So even if someone’s getting that invoice who didn’t read the contract, if they have like a different accountant, etc.

It’s very clear wh ever gets the invoice that they know when they should pay and that there’s an incentive for them to pay on time. If you really want to and um I know that from furniture companies they do that.They sometimes give clients a discount if they pay in advance or if they pay cash instead of card, things like that.So, if you want to improve your cashflow, you could even incentivise the client that if they pay for the full project up front that they get a discount. It’s up to you if you’re willing to do that.

I don’t think it’s that common to do it because you’re basically reducing your rate for like some extra cash. But also, if it means you get money like 2, three months upfront and then you can do something else with that, reinvest it in your business or do other things, why not give them 1%or something off for earlier payment.Also, don’t underestimate emails, especially friendly reminder emails, because people understand that there’s a little bit of a unfriendliness to it that you have to remind someone, but it’s like the friendly reminder.

So, what can be useful is to send a reminder email 2 3 days before the invoice is due. Something along the lines of thisis a friendly reminder that invoice X,Y, and Z is due by X date. If you already scheduled the payment, there’s nothing for you to do. If you haven’t, please keep in mind that there’s going to be an X amount late payment fee. It’s up to you how much you want to charge for the late payment fee. Mine is quite low. It’s 2%. I’ve seen other people charge 7% for a late payment fee.

Or it might even depend on the amount of invoice that you have because if it’s like a 100 pounds invoice like I hope you don’t send 100 pound invoices because like you should be charging more or you should acrue more work before you send that invoice because every single time you do those things manually it takes something out of your time that you could be using for something else.But let’s say your invoice is £100having like 2 3% is not really a lot. So maybe then you can charge like a 10% late-payment fee. However, if your invoice is £10,000, 2% 3% is actually a semidecent amount.

Emails are powerful, if done well

Send those reminder emails. And I know it can be super daunting and uncomfortable to press send on an email like that, especially if it’s the first invoice that you’re sending to the new client. So, one way you can do that, making you feel a little bit less uncomfortable, is by automating those emails. But, of course, you need a system that knows if you have been paid already because you don’t want to send this email if you already received the money. Or you can do it manually and just make it look like it’s automated. Like for example, change the font a little bit to what your default font is in emails or add automated message in the subject line.

Seems a little bit sneaky to fake an automated email. But when you’re the receiver of that, you take it a little bit less personal if you think like, okay, it’s a bot that’s chasing your invoice or ifit’s the freelancer personally chasing your invoice. Or maybe you have an assistant.

Ask your assistant to chase that invoice if you have a VA or maybe like I heard from people that have a separate email and they usually use a male assistant because well I’m not going to get too much into that topic but it seems that people respect men more than women and if they get an email by John asking you to pay the email compared to Sarah chances are they actually going to pay John’s invoice before they pay Sarah’s.

So, if you create like a fake email address fora fake assistant, consider making that fake assistant mail. Or if you’re really sneaky, if you don’t have a VA, if you don’t want to fake automated emails, you can create a new email account. Just make sure that it’s like if your email address is like mine, it’s hello.co.uk. It could be like admin@elisabeth.co.uk or like whatever, john@elisabeth.co.uk

And then John would send that invoice chasing it. And it comes across very professional and it kind of takes the burden away from you. So that might be another sneaky way how you can do it.

Consider a Middle Man

Another option is to get a middleman. And I’m not usually a fan of getting a middleman. I would not recommend that if you’re in the industry much longer, butyou can get a middleman doing the invoicing for you with platforms like for example Juno. If you haven’t heard of YunoJuno, it’s basically a platform where people can look for freelancers and where freelancers can find gigs.It’s like a better version of Upwork and Fiverr because they actually pay decentrates and their USP compared to other platforms is they pay you no matter ifthe client has paid the invoice or not.

So, the freelancer is going to get paid within their payment terms and YunoJuno is going to chase the client in case they didn’t pay. But then again, working with platforms like Uno Juno means that they take a batch of the share. I do think they charge the client, not the freelancer, but just keep that in mindif you want to have this extra safety of having a middleman involved.

How to Handle when they’re past the payment due date

Even though you might do all of the things that Ijust explained to you and have all of the precautions of making sure that theypay you on time, you might still get into the situation where they don’t pay you. So, here’s how you handle it whenit does happen. Send them another friendly reminder email because sometimes it’s just a bit of oversight.They forget it.

They have so many things to do at the end of the month and they might have forgotten to clear your invoice. So send a friendly reminder email within one or two days after the due date. If they still haven’t replied to that email and if you still haven’t gotten paid after, let’s say 5 7 days after the invoice was due, send another reminder email. And this one can be a little bit more strict.

So you can think of it like the first email being like the good cop and now you’re saying the bad cop email. Good cop email is something along the lines of like this is a friendly reminder that invoice XY Z set was due on X date please pay. Bad cop reminder can be something like oh invoice was due X days ago. If you don’t pay by the end of the day I’m going to send you an updated invoice with the late payment fee of blah blah blah applied.

Always attach in both of them the original invoice so that they have it handy. They don’t have to waste time to find the invoice to pay you so that they can action straight away. Or if you have things like Stripe and you can send them a payment link that where they can do everything online instantly, even better. Of course, Stripe takes fees.So, it’s up for you to decide if you want the client to do a transfer or if you want to make it easier for them through a payment link.

Okay. If you sent the good cop, you sent the bad cop, and they still didn’t reply, they still ghost you, you still haven’t heard any update on why they haven’t paid you orif they’re going to pay you, then you have to take more measures. This iswhere things get a little bit uncomfortable. You can get out of emails, send them a WhatsApp message, slack them. I once had a client who didn’t pay for like 3 months and I kept chasing them. I sent them emails like weekly and they ignored me. I slacked them and eventually I was like, I’m still on this project. I mean, this is awhile ago now. I wouldn’t do that anymore.

I would have stopped working for them if they didn’t pay the invoice for for this long. And it was a client that I’ve worked with for several years.It was a returning client and they have very interesting projects. They pay my rates. I don’t have to give them a discount. So I was a bit like I don’t want to have to chase her but at the same time mate you’re taking the piss just pay me. So normally I would have stopped work but because I didn’t want to burn that bridge I still worked forthem because also I knew they had tight deadlines and all. So I then messagedthe project manager I messaged the head of project.

I messaged the other developers because they all worked in the same office if they can reach out to that person who’s in charge of paying my invoice. And it’s not good for their reputation. It’s not nice that they know that the freelancers haven’t been paidfor several months. So, if you can avoid that, avoid that. Luckily, everyone inthe team was very understanding.

They were saying like, “Oh, yeah, I messaged him, but I haven’t heard.” Maybe they haven’t. Who knows? But, um, it’s a very uncomfortable situation, but at the same time, it’s your money. You should you should get paid for what you delivered. It’s really uncomfortable. It’s not a nice thing to do, but if you’ve been chasing an invoice for 3 4 months, they’re taking the piss. So, stop people pleasing. You should get paid for your work. So, you should be able to get your money. Okay, you’ve done all of that. You even contacted other people in the team that are not involved with paying your invoices, but you want to add some pressure to it so you finally get paid and still nothing happens.

Cease Work if neccessary

I feel your frustration. I’ve been there. Then stop your work for them because it’s likely that your other invoices are also not going to be cleared. Stop working for them. Make it clear for them that I have sent X reminders. I have contacted people ABC and still haven’t gotten any information about if you’re going to pay my invoice and at the moment this is due including the late payment fee of month 1 2 and three. Now it’s um x y and zed. You send the updated invoice with the updated late payment fees.

So like every single time you do that, it’s extra admin from you because you have to review that invoice if it’s the right amount, etc. So like you do extra work that you wouldn’t have to do if they would have just paid you on time. So tell them, I’m going to cease all the work. I’m not going to continue. I’m not going to handover any other deliverables even if they’re done. Unless you pay those invoices. In my opinion, the whole point of freelancing is that you don’t have a boss. Like you have a business.

Yes, maybe you’re kind of the only person working in the business. And if you don’t have all the systems in place that it doesn’t run without you, it’s not 100% a business because a business should run on its own. But you’re not an employee. You created this freelance career so you can have the life that you want, that you have the freedom you want, and for that you need to get paid.

And you have contracts with your customers. So, if you hold up to your part of the contract, you deliver the work, you send files over, you join meetings, whatever it is that’s in the contract, but they don’t keep up to their part, which is basically just sending you the money and the information you need to do your work,then then why continue working for them?

Like, you had an agreement. That’s what a contract is for, that everyone knows what they have to do, and one of their jobs is to pay you. Okay, you stopped working for them and you still haven’t heard from them. Now, it’s time to take legal action. It depends again how much money they actually owe you and that will define what your options are. And it’s so nice to take legal action.

It’s super scary. It’s very uncomfortable, but like not getting paid for your work is so uncomfortable. And do you want to carry with you the anger about them not paying you? And then maybe you’re being worried about future clients not paying you, etc. Do you want to carry that with you or would you be okay to just stand up for yourself and go to court?

If nothing works: Take Legal Action

If you’re in the UK, there is something called small claims court and it’s for anything below I think it’s £10,000 and if the invoice that you’re sending them isbelow £10,000, you can basically do it online. You don’t have to call anyone.You don’t have to go to an institution.

You don’t have to go to some council office or whatever. You can do everything online. And it depends on the invoice, how high or low the invoice is, how much the fee is. I only once had to do this, thank God, and it was like a £500 invoice, but they were just not willing to pay me. And it was because I mean it was like a little bit out of a norm situation, but I was working at the startup. They paid me at the beginning £20 a day, which was absolutely nothing. And then they wanted me to work full-time and they paid me £200 a day, which wasn’t too bad for me at the time, but at the same time, I thought I was employed, butI wasn’t. I was a freelancer.

They asked me to send them invoices. I was in my early 20s. I had no idea what I was doing. I didn’t know that I was a sole trader. At that time, I did end up doing my self-return assessment. So, I did everything legally in the end. But as I was working for them, I had no idea that I wasn’t actually an employee, thatI was not going to get pension contribution, that I didn’t have insurance and all these kind of things.So be careful when you get into those kind of work relationships.

So it was kind of the worst of freelancing because you don’t get the rate and you don’t get the freedom. And it was the worst ofbeing employed because I didn’t get a pension, I didn’t get paid leave, etc. And I’ve been working with them for about a year and I was arguing with them that look, you basically treat me like an employee. I want to get paid. I want to get paid time off. like you barely pay me anything anyway. I had it in writing.

I had an email where they said they’re going to pay me the £500 for a two week holiday or something. And consider I worked there for a whole year not taking any time off, not even calling in sick. Yeah. So after that I left the company and that was before they paid me the £500 holiday money. And then they said, “No, we’re not going to pay you that. You’re not working for us.

So why should we pay for this?” And it’s like because you agreed to it. So then that’s when I had to do the small claims court. Back then the fee was like £35and I was so worried to do that because like oh my god I’m basically suing them what’s going to happen but at the same time I was stubborn like I don’t know if today I would chase £500 might depend but with that client I was chasing it because I was like I wasted I mean yes I learned something there but I wasted a whole year working for you for £200 a day as a freelancer not being able to save any money not being able to like accrue money into my pension things like that. So I was just stubborn.

I just wanted to win. So I went online, researched what I could do, came across the small claims court, submitted the form and paid the £35 fee, whatever it was back then. And I waited and I shed my pants and then suddenly they sent me the money. And basically what happens is they will get a legal letter saying that this is the case.This is what’s happening. You have time to either defend yourself or to pay this amount.

And I think they just didn’t want to make a court case out of it. andI had it in writing that they were going to pay me. So, it was really hard for them to get out of this. So, yeah, that’s then they paid me. It wasn’t a fun experience. It was not nice and luckily it didn’t actually turn into a whole court case, etc. But that’s an option that you have. So, if you’re in the UK, it’s called a small claim court.

And depending on which country you’re from, where you’re based, if you have a limited company, if you work as a sole trader, things like that, you might have different options for that. So keep thatin mind if you have to enforce them paying you. That situation definitely burned that bridge.

But also, I was ready to move on. I didn’t want to work with them anymore. It was actually already after I quit working with them.So only do that if you don’t want to work with the client anymore. If you don’t have anyone in a senior suite that you want to stay connected with, be mindful when you take that step. I really hope for you that you do not have to go through that, but just know tha tif you’re in a situation where they don’t pay you and it’s less than £10,000 or depending on where you’re based, it will probably be a different amount.

Can You Spot in Advance a Client that doesn’t pay?

But know that there is that option. Can you spot in advance if a client is unlikely to pay you? Not really. But there might be some red flags. One of them I mentioned before it’s for example if you ask them to pay a deposit and they don’t want to pay a deposit. Another one could be if they negotiate your rate too much.

You give them your industry standard rate and they still want to say oh it’s too much for us. It’s this is that doesn’t mean that they won’t pay you.might just mean that they don’t have more budget but it could mean that they will struggle to pay you because this is what happened with the other client that I mentioned before who didn’t pay me for 3-4 months because they had some cashflow issues and they thought well we need to pay our staff like it’s a legal thing we have to do but we can avoid paying our freelancers and just wait until all the money comes in which is nice but that’s the risk that you have when you’re a freelancer.

Another red flag could be that you have to chase them for things. So before you start working together, you might have to chase them to send you brand guidelines to um sign the invoice. Whatever it is, if you constantly have to chase them, it means they don’t have the systems in place to do things on time or they don’t stick to their tasks. So chances are they will likely pay you late.

Also, if it’s a small client, if it’s like a startup and they’re also a one person business, you never know what someone’s going through. So maybe someone just passed away, maybe they have some cashflow issues. So always be mindful, always be nice if someone doesn’t pay you. If it’s a big corporate, then I mean there’s still person, there’s still a human behind paying you, but they do have the systems in place. They have those reminders.

They have like software for that. So always think about who you’re actually working with and why they might not pay you. All right. Usually at the end of the podcast, I ask my guests about the things that their future past self would tell them. But now I don’t have a guest.

What You Need to Hear

So I was thinking, how can I wrap these episodes up? So I’m just going to tell you what I wish someone would have told my youngerself when I wasn’t in my first situation where my client didn’t pay me on time.And I really, really hope that you’re not going to find yourself in that situation.

But if you do, and chances are you listening to this podcast episode might mean that you are in the situation right now, hearing these things might help you. You’re not the first freelancer this happened to.

Unfortunately, it’s quite common. You are basically giving away a free loan to your client without interest. So, don’t let them get away with it. You didn’t start your freelance career to continue being a people pleaser. So, stand up for yourself. You’ve done your part of the contract. They have to do theirs.Chasing your invoice might feel rude, but it’s just industry standard. It’s common. It’s normal. Send that friendly reminder. And there are platforms and resources for this. Go get legal advice.

If they haven’t paid you for over 3 months, definitely go and talk to someone about this. What’s the worst thing that can happen? That they’re not going to pay you. Well, that’s already happening right now. So, it can only go uphill from there.

Outro

Thank you so much for listening. I hope this episode was useful. If you ever had to deal with clients not paying your invoice or if you’re in that situation right now, drop a comment below. I would love to hear more about this and see if I can help you. Or if you don’t want it to be public on this video, you can send me a DM on Instagram. My handle is @elisabethmayr. But again, maybe some other freelancers will see your comment and they can help out as well.

So feel free to comment below. If you need some templates on what to actually write when you’re in a situation of unpaid invoices, check the description. I’ll add links to some free templates for you so you know “exactly what you say when your clients don’t pay”. And yes, ChatGPT came up with that sentence, but I was like, actually, not that. Let’s use that. Thanks so much for listening.

Don’t forget to like this episode, share it with anyone that you think can benefit from listening, and also subscribe. It’s all from me, and I can’t wait to have you join again next week.Bye.

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