September 5, 2009

Payment Collection

What happens if you’ve checked your client's background and set payment terms, but you still have trouble collecting after the project is over? Don’t despair, there are a few things you can do to collect your fee.

Reminder: A simple step is to send the client a reminder. It’s surprising how many freelancers just sit waiting for a late payment. You worked hard for your client and delivered a service; don't be shy about reminding them that your payment is due. Make sure to be polite but firm when writing or calling a client to remind them of a pending payment, after all it’s important to behave in a professional manner.

Warning notice: A client will often be more inclined to pay if they realize that you are going to take steps to collect your invoice. Before taking any additional measures, inform the client in writing that if your invoice remains unpaid you will be forced to take action to collect. Once again, there is no need to be impolite when informing them of this, even under these circumstances a professional attitude goes a long way.

Lists: There are a variety of lists that you can add a non-paying agency or company to. Doing so makes it difficult for them to hire a freelancer in the future, which is why very often even telling them that you will add them to one or more of these lists will do the trick. The main lists are: (Hall of Fame and Shame) (BlueBoard) (free yahoo group) (free yahoo group) (Better Business Bureau)

Legal action: Legal action need not be expensive. For invoices less than $5000 (note: this amount varies by state), you can file a suit in small claims court. In most states there is a minimal fee of $15 to $25 to do so. You can also hire a lawyer to send the client a letter, in most cases the fee for this simple service is between $50 and $100.

Writers Union: If you’re a writer or translator, you can join the writers union. There are many benefits of memberships; one of them is grievance assistance. During this process a union representative can assist you or negotiate on your behalf with the client. Quite often the initial letter from a large organization such as the Writers Union will be enough to get the client to pay you.

Collection agency: One final option is a collection agency. In some cases it may be possible to obtain a discount on this service through various memberships, such as the ATA. If you decide to go that route there are two options. The agency can either charge you a fee, normally a sizable percentage of the debt, or they may be willing to buy the debt from you and attempt to collect it. If they opt for the latter, you’ll generally get very little on the dollar for your troubles, but it’s better than not getting any payment.

It’s important to take steps to avoid situations where a client doesn’t pay you. Non-paying agencies or companies are a reality of working as a freelancer. It’s not a matter of if it will happen, but when. The important thing to remember is to remain professional and take steps to collect your fee. If after taking the steps described you are unable to collect payment, make sure as many freelancers as possible know that this company is not trustworthy by using the posting sites available. This will help your fellow freelancers as well as discourage future abuse of the varied services they provide.

1 comment:

  1. this is really helpful. it's good to know that first, it's not just me this happens to, but that there are options.