April 21, 2018

Photography
Hannah Graves

What To Do When A Client Doesn’t Pay For Your Work?

Image: Cute Piggy Bank, by Fabian Blank

For creatives, waiting for an invoice to be paid can be frustrating. When you work on a freelance basis, it can feel like you are at the mercy of your clients.  There are steps to take in an attempt to resolve the problem, and further steps to take to try to prevent facing the same problem in the future. It’s important to act promptly, the longer you fail to follow up, the less likely you are to be paid. Here are the steps...

Send A Polite Reminder

Your first move should be to send a polite reminder that the amount is overdue. Send a friendly email, and ask if they need another copy of the invoice. You can also ask if the details were correct and when you can expect payment. A professional invoice should provide the date of the invoice, the invoice number, a brief description of the work, the amount of the invoice as well as the expected payment method.

Make a follow-up call

If they do not respond to the email, follow up with a phone call. It’s important to remain calm and to not make the client feel uncomfortable. In these situations, it’s almost always best to keep communication as open and honest as possible. Keep records of any communication with the client, in case you are forced to take legal action later.

When Polite Reminders Don’t Work

Some freelancers advocate taking to social media in an effort to provoke a response. Most businesses these days are concerned with their social media profiles. Reaching out in this way may be a fast way to get them to pay attention. However, it may also deter other potential clients from working with you in the future. If you do decide to take the problem public keep the tone professional and don’t resort to a flame war, your primary aim here is still to get paid. Handling this in an unprofessional manner is unlikely to get you the result you’re looking for. There may be a valid reason for the delayed payment.  If you live near your client, you could always consider stopping by to make an inquiry.

Late Payment Fees

If your communication is being ignored and the invoice is still outstanding, you can bill a late fee. This should be something that was built into your original contract. There are different rules and regulations surrounding fixed penalties for commercial debt within different countries. The UK government, for example, suggests including these words on invoices:“We understand and will exercise our statutory right to interest and compensation for debt recovery costs under the late payment legislation if we are not paid according to agreed credit terms.”In this case, the law still applies whether or not you decide to mention it on the invoice or not. Submit the invoice again, adding your late fee whilst pointing out that the amount added will increase the longer the total remains outstanding.

Down Tools

If the above attempts fail it may, at this stage, be advisable to freeze or otherwise put a hold on any other projects with that client. If this was not a one-off job, let them know that you have ceased working and that you have no intention of resuming until the outstanding invoice has been paid. The payment may never arrive, so it may be worth cutting your losses and not giving the non-paying client any more of your valuable time.

When The Client Cannot Pay

If the client doesn’t respond to any communication. It may be that they have gotten into financial difficulty and cannot pay. They may even tell you as much. If the client has, for example, gone into liquidation, you can become a creditor. If a person or company owes you money and the courts have issued a bankruptcy order you can register to be added to the list of people who are owed money. This does not guarantee any payment but you will be kept informed.You are entitled to make a claim from the liquidator or administrator (usually an accountant or solicitor). You should make efforts to contact them to provide your contact details as well as all the information you can about your claim. However, you cannot be paid what they don’t have. If the person or company has no assets, you will not get paid and will have to accept the loss of earnings. If there are assets it could still take months, or in complex cases, years.

When The Client Chooses Not To Pay

If the client fails to pay but continues to operate as a business you can take the decision to seek legal help. An official letter from a lawyer or legal service may get you paid, but at this stage, you have to decide if you are prepared to take the client to court. Suing a client is a costly, time consuming and, if done alone, often a cause of great stress. You need to decide if the amount you are owed is worth the legal fees and time involved in pursuing through the courts. Laws relating to freelance work vary from country to country. You should check the law in relation to non-payment for freelance work as specific to your location.

Non-Payment And The Law

The sad reality of the situation is that the law, internationally, does not favor the freelancer. In the United States, for example, you can sue for breach of contract but are not entitled to attorneys fees. In New York City, however, they have successfully applied laws protecting freelancers, under city labor laws. On May 15th, 2017, the city passed the Freelance Isn’t Free Act which establishes protections for freelance workers, specifically timely and full payment for work undertaken on behalf of a client. The law also establishes penalties for violations of these rights, including statutory damages, double damages, injunctive relief, and attorney’s fees. For now, this law is specific to New York City but there is a call from the growing number of freelancers in the American workforce to have this law applied nationally.

How To Prevent Non-Payment of an Invoice

Having had a bad experience with a non-paying client, what steps can you take to try to prevent this situation from happening again?

  • Before agreeing to work for a client, do some research. Where possible, speak with other freelancers who have worked with them. Check their social media accounts and reviews.
  • You should never embark on a project before a written proposal/agreement has been provided.
  • Never start work without a contract, which should include your payment terms and information on any late fees that will be applied. This is also where the intellectual property rights will be agreed (be clear about who will own the copyright of the created work). The contract should agree on timelines and clearly layout the structure of the project. You may wish to include a kill fee (in case the client cancels), and always define payment terms up front.
  • It is also a good idea to ask for a deposit up front. If they have a problem paying a deposit, you should take that as a warning sign.
  • When you are invoicing, create an invoice for each piece of work, or job that you undertake. You may be entitled to late payment compensation per invoice. Always build a payment time frame into the invoice. Payment should be made within a maximum of 30 days after the invoice was delivered. Copy and file any invoices issued.  

Summary

As a freelancer, you need to be able to spend your time on your work, not on chasing late payments.

  • When a client doesn’t pay, remain polite and send reminders.
  • Consider applying late fees and adding them as a standard element in your contracts.
  • If it goes on too long, consider freezing all other work for the client until you have been paid.
  • Know your rights, and how best to proceed and the risks involved if you decide to take legal action
  • Make sure you are exercising best practice to prevent a non-payment situation arising again.

What are your experiences with clients that don’t pay? Let us know any other good techniques in the comments, below.When creating images for a client, you know about the licenses issued and the terms of their use. To protect your images from unauthorized use, Pixsy can help! You can find where, and how your work is being used on the web and take action against infringement of your copyright. The best part, it’s FREE!

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Hannah Graves

As Pixsy's Product Marketing and Community Manager, Hannah is always keen to start conversations and she loves to make connections! With years of experience working with and advocating for visual artists, she is passionate about fair pay for fair work and enjoys helping to get artists paid, and heard.

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