Ain't getting paid

Little late to this, but I’ve seen the other side of this (my company does this to vendors that I am the point of contact for on technical questions), so I’ll throw a couple of thoughts in:

  1. The advice to cut them off is spot on. Do it on day 31. It is especially effective when finding a new contractor and getting them up to speed costs time and money. The amounts due to freelancers/contractors are usually tiny compared to other vendors. They will usually pay just to avoid the headache.

  2. If they are late once and eventually pay, you should ask for a credit card authorization form for you to keep on file for future work. Let them know that you will charge their card the day after an invoice goes overdue.

  3. Be nice to accounting staff. They’re usually just following orders, so it isn’t their fault. And if they like you, they’ll often tell you stuff off the record. Maybe even pay the smaller invoices that they can at their own discretion.

“looselyspeaking” is right…

Good info here. I see the same sort of things happening, and it’s mostly driven by upper management trying to bully vendors. That includes freelancers. It’s sickening.

thanks for the candid post looselyspeaking

One client said I was “difficult” to work with for having these bullet proof terms and said other designers he works with aren’t so difficult.

I think if we continue to share techniques on not getting ripped off, establish good and fair terms and stick to our guns, things become accepted norm.

It takes a few to cave in to make it harder for everyone. If one guy does stuff for free and make concessions it hurts the rest of the industry and lowers expectations/respect for the entire profession.

If we all stick to our guns, they can’t go to the next sucker which is what some of these clients think they can do.

I understand your frustration, but I think you need to strike a balance between protecting yourself and building a friendly relationship with the client.

Assuming for a minute that my company had a policy of paying on time, I still would not work with someone who asked for 50% up front and payment before delivery. Most freelance work is fairly short term. Lets say I need a new drawing from a contract CAD drafter - I would have to go hound accounting and wade through the bureaucratic process of circumventing the system to cut a check the same day (possibly twice) to get a few days of work done. Someone else who is willing to wait 10 days for it to get processed the normal way would save me a lot of trouble.

The other thing is trust is mutual - if you treat a well meaning client this suspiciously, it will probably leave a bad taste in their mouth even if your work is excellent.

I think you should give new clients the opportunity to do the right thing before you assume the worst. You can still invoice weekly, and maybe write a penalty clause into the contract, so you’ll find out what their practices are early and adjust thereafter. Good relationships make work go smoother and get you repeat and referral business. It’s worth the risk to give them the benefit of the doubt at first.

Disclaimer: As an engineer I don’t know how IDers are treated across the board. Perhaps you could run a poll on the forum to see what percentage of clients don’t pay on time.

Asking for a credit card and charging if one day late? Nevermind the fact that processing the credit card will cost you more than you’d make if you charged 1% interest per month.

I think your following post is a bit more reasonable.

I understand your frustration, but I think you need to strike a balance between protecting yourself and building a friendly relationship with the client.

Assuming for a minute that my company had a policy of paying on time, I still would not work with someone who asked for 50% up front and payment before delivery. Most freelance work is fairly short term. Lets say I need a new drawing from a contract CAD drafter - I would have to go hound accounting and wade through the bureaucratic process of circumventing the system to cut a check the same day (possibly twice) to get a few days of work done. Someone else who is willing to wait 10 days for it to get processed the normal way would save me a lot of trouble.

The other thing is trust is mutual - if you treat a well meaning client this suspiciously, it will probably leave a bad taste in their mouth even if your work is excellent.

I think you should give new clients the opportunity to do the right thing before you assume the worst. You can still invoice weekly, and maybe write a penalty clause into the contract, so you’ll find out what their practices are early and adjust thereafter. Good relationships make work go smoother and get you repeat and referral business. It’s worth the risk to give them the benefit of the doubt at first.

Disclaimer: As an engineer I don’t know how IDers are treated across the board. Perhaps you could run a poll on the forum to see what percentage of clients don’t pay on time.

I have never been stiffed. I ask for 50% deposit up front. I ask for payment of invoices on presentation. I’ve never held back final work for payment. Still, some of my best clients are a bit slack on paying immediately and may need a bit of "reminders’. I think it often may not be from spite that payments are neglected, but sometimes, it’s just the bureaucracy of the company, or honest laziness.

It should be an honest relationship both ways, and if not, you are picking the wrong clients from the start.

R

Definitely. I know many businesses where it takes a small mountain of paperwork to get a check cut. Many only cut checks on one day of the week because of the amount of work involved. But, I say the sooner you invoice, the better. And if your terms are agreed upon up front, whatever they may be, the better it will be in the end.

I should have qualified that - if they give you the runaround once. What constitutes ‘the runaround’ is a judgment call.

Yes, the credit card tactic would get you less money if you went through with it. In my experience just having it on file is enough. It works because it tells them they’ll be paying anyway, so might as well cut the check. You could technically also add the transaction costs to the invoice.

Absolutely. Invoice total+3% or so.

I’m interested in hearing the eventual outcome of BlenderDefender’s letter to the client. How did they react and did they eventually pay or drop out of working with you? It’s like waiting to see how a story ends and finding out what kind of people they really are. I admit, after a couple decades in the biz, I’ve become somewhat cynical. Is there any restoration of hope for humanity or are they rotten to the core?

I know this post is an old one, but it pretty much applies to my current situation. I’m currently freelancing for a company and will be submitting my third monthly invoice tomorrow. I had hassle getting my first paid, and payment for the second is yet to materialise. I think the best way to avoid this happening again will be to add the caveat:

Payment must be received in 25 calendar days of receipt of invoice. Failure to pay within 25 days will result in an additional charge of x%, failure to pay within 40 days will result in an additional charge of y%.

My question is what should x and y be? I’d love to go large but understand that this would make me look stupid, so was wandering what is generally acceptable.

Interest is normally 1-3% per month. You won’t get rich on interest and it’s rarely that much an incentive for someone to pay. If they won’t pay $2000, another $20 is nothing.

R

Thank you for the quick response. I think I’ll go for 3% as it’s probably more than their getting for the money sitting in an account. I think also adding the caveat of all work belonging solely to me until full payment has been received (as mentioned on here) should hopefully give them that little bit of encouragement they seem to need.

Depends where you are.

In the UK you can charge up to 8.5% apr. But this isn’t much of an incentive to pay on time, so it’s worth adding an admin fee as well. In the UK you’re allowed to charge an admin of £40 (if the invoice is <£1000) or £70 (if the invoice is >£1000)

You’ll come across clients who will try to put off payment for as long as they can, so it’s wise to have late fees in your contract.

Thanks for the info. I’m in the UK but decided to go with the 3% a month (being a smaller number it looks less intimidating yet adds up to more than 8.5% apr). I left out the ownership to try and keep it feeling friendly and went with ‘Payment to be received within 28 calendar days of date of invoice.*’
*Failure of payment to be received within 28 calendar days will result in an additional charge of 3% invoice total, and an additional 3% cumulative every 28 days thereafter.
I told them in advance that I would be adding this to my invoice (in an email chasing payment for my last invoice) so hopefully it will provide that little incentive to pay me on time without putting their nose out of joint. The 28 days also aligns with when I submit my invoices and they pay their salaried staff.

Craigslist freelance design adverts = Huge red flag

Just wanted to add another note to this post. In order to prevent this, I drafted up a Statement of Work, which basically outlines any agreement between myself and the client and requires them to sign it in order for work to begin. Sometimes negotiation would drop off at this point because the client doesn’t want to sign a document stating that they will pay x amount at y date. It helps me filter out those who plan on paying and those who don’t. I welcome any input regarding this practice; yes I’ve lost a client or two, but at least I didn’t spend time working for free.

This was a common practice at frog as well. SOWs were pretty standard and used as an initial kickoff milestone, basically both parties agreeing on the specific scope of the project, deliverables, timeline, and fees. I think it is a good practice.

Not Industrial Design per se, but here’s how one graphic designer deals with it: It's like Twitter. Except we charge people to use it.

(Above GIF copyright of Simon Edhouse)

BlenderDefender???