Ain't getting paid

Hello all,

It’s been a long time since I last posted. I have found my self in an employment conundrum and was hoping for some outside perspective.

For the past six months I have been freelancing regularly on site at a design/engineering consultancy that will go unnamed. The projects are stimulating and the people I’m working with are great. However there is one catch. They’ve been horrible about paying me. In my contract it states that I will receive payment 30 days from the time an invoice is issued. Since I’ve started working I’ve been lucky to be paid within three months. They keep asking me back to work on projects, which I’m happy to do, but they keep falling further and further behind in their payment. I’m currently owed not an unsubstantial sum of money.

I have confronted them about this and was told that the company was having “cash flow issues and to please be patient”. This was a couple of months ago and its been a month and a half since I’ve received any payment at all. How much patience is reasonable in this sort of situation? Has anyone else found themselves in a similar bind?

I don’t get the feeling that the company is going under, there seems to be billable work to be had and people are busy enough. Though it is a concern.

Should I just keep kicking the can down the road?

Thanks for the advice,

I’ve heard the “cash flow” excuse many a time. It’s the same old run around used by many not so nice bosses. I was in your situation a few years ago and had to simply stop working until payment due was made. The larger it snowballs, the less likely you’ll see the money. Sometimes it is a technique to drag it out so large that you’ll be hurting so much you’d accept taking a discount just to get paid something for all that work. It’s the “starving the contractor” trick so that he’ll accept eating crumbs and take the Oliver Twist porridge instead of the full meal he actually earned and deserved.

Now I have instituted a new policy where I only hand over the work upon receipt of payment. If you are working on site then I would simply bill bi-weekly and not continue further work until previous debts are paid. Doing a bi-weekly billing does a couple things. First, it keeps the amount digestable and smaller than waiting a full NET 30 days. Second it minimizes your risk of taking a huge catastrophic loss if they go south and stiff you. At most you’d lose a couple weeks of pay if they turn out to be total jerks. That’s still within small claims court range in terms of amount so you still have that option should you have the time to go that route.

One time I went to their client directly to ask for the money when the consulting firm stiffed me. I figure if it really was a cash flow issue then it would mean the client was not paying the firm. Ofcourse that wasn’t the case. Making the direct end-client aware the firm isn’t paying their consultants is an effective last resort move if all diplomacy fails. It embarrasses the firm and notifies the client what a jerky firm they hired and also gets your name known to the client. Now they know who’s doing the actual work ha-ha. If jerks try to steal hard earned pay from you, steal their clients. Touche tit for tat! I have no sympathy for firms that don’t pay on time or follow agreements. This was my way of salvaging something out of a total loss situation otherwise.

It’s slippery and too risky to kick the can down the road any longer. I don’t really buy the “cash flow” comeback as that is really THEIR problem, not yours. If you went to a restaurant would they let you eat for free if you said you had “cash flow” issues? The more you allow it the more people will abuse your patience and generosity. You have to eat and pay bills too! I’d find a polite way to tell them that. Stopping work is one of the best ways cause that puts a cog in the wheel of their machine and puts pressure on them to capitulate. Why do you think airline workers threaten strike during heavy travel seasons? It’s all about leverage and the value of your work.

I used to also attach an interst % penalty for each month that payment was late.

As a consultant, my best strategy was to withold the critical deliverables until payment was made and cleared. That beats all other methods of getting paid I’ve tried in my career cause it forces their hand. Another instance I asked for an advance PO amount which I billed against in hours like a retainer. When it ran out, I stopped until a new PO was issued. It’s like a haircut. I cut the hair until money runs out. Chances are they will continue to have you finish cutting the hair than walk out of the salon with a half done hairdo.

Good luck and don’t get bullied! There is likely no “cash flow” issue. My guess is they have the money if the lights are still on and people are busy.

Oh yes, in your contracts there should be a clause that they don’t own the work until payment is made in full. This one actually worked for me in one instance where they mulled over 6 months to pay and then finally did cause their lawyers probably said I could potentially sue if work was used and product was sold in the market. That’s huge with punitive damages. Remember, any patents need to list the actual “inventors” so there will be no notary of any assignment until payment is made in full. If they run off, they’re committing fraud on the IP recording if they leave you out cold. You can swallow them whole if they are so wreckless and arrogant as to try getting over this way!

Another one was for a corporate client who’s manager tried to stiff me. They often think we’re freelancing cause we can’t get a job and they throw us a bone thinking we’d be easy push overs. They fail to understand we may be freelancing by choice and we are immune to getting fired. I once spammed the entire client team and kept emailing up the chain of command until my bill was paid. This made for entertaining daily email soap operas in their office where this guy worked. I said we can go to arbitration, which is in my contracts as a way to settle disputes. In arbitration, you are usually awarded “the reasonable value of services” with any legal costs. That means mediators and legal folks go out to some firms and get quotes and use that to determine how much you should be paid. Well if they went and got quotes, it would be way more than my then paltry hourly rate so it scared them enough and the spamming embarrassed the guy enough amognst his peers where he coughed up the dough. He kept saying cash flow and didn’t have enough budget, blah blah to try to get a discount. I said I am talking to his boss and if they don’t pay, take the boss to small claims court. The guy was eventually fired. Serves him right. I think it was his job and he procrastinated so long that he needed an outside guy to put out the fire. I use legal jargon like arbitration to sound like I know what I am doing. Helps to learn some legalease. Even without a contract you can use threatening arbitration as a way to try to get paid. Sure you might be bluffing but at that stage you have nothing to lose.

Be very wary of people who call you on a Friday, expect delivery on a Monday. Usually they try to get you to skip due diligence and necessary precautions with contracts on pseudo hot rush jobs. I’ve learned NOTHING is that rush and I don’t do those kinds of hot rush freelance gigs anymore. Anyone wanting to change your terms, calling you “friend,” or not going by the protective policies you have in place are 99.999% of the time trying to con or cheat y0u out of your pay. When someone asks you to “trust” them, they’re almost always trying to con you. I always reply with the Reagan Gorbachev saying “Trust but Verify.” :slight_smile:

Best advice is to not get into the weaker situation in the first place. If you have the work, you have the upper hand. It’s like the antidote to the poison. When they need it you have the upper hand. Once you give it to them they can stiff you after they’re cured. So best is to get a deposit or advance to start work and deliver only after payment of balance in full. That way you will never be wasting time chasing the money and begging to be paid. Add that the rights to the work remain with the designer and is only transferred upon payment of all outstanding fees as a second layer of protection but it won’t be needed if you have the COD terms.

By all means, no matter how much they beg and plead or say they need the work handed over immediately for some kind of presentation or if they say the check is in the mail so you can release teh work, don’t buy it! It doesn’t count until the fat lady sings which means even a check can be stopped payment on. It has to actually clear and get into your account before you are really paid. I once had a guy purposely mess up the date on the check so that by the time the bank returns the check as invalid he’s run off with my work. So make sure payment CLEARS first. Otherwise you can wipe you booty with that piece of paper.

I’m glad there is a forum for us to discuss things like this now cause I learned from getting burned alot in my trusting, naive, younger years and constantly discovering new client tricks. Once I started seeing repeat tricks from different clients, I know I am closer to having “seen it all.” I think I have put just as much time into chasing after my money and thwarting con-artists as I have designing so hopefully you can avoid some of these pitfalls going forward. For some reaon our field attracts a lot of dirt bags cause the value of the work and amounts involved are more than just a cup of coffee. There’s nothing more repulsive than dishonesty, especially when our work is worth so much to them yet they don’t want to even give you basic pay for your talent and ideas. Best of luck to you!

This was an excellent piece of advice and should be pinned on top of the boards.


mp has some great advice. Add a percent % or “late fee” to future contracts (usually past 60 days), also perhaps demand 50% up front if they are having you come in for a week at a time. All else fails, with holding a critical deliverable is within reason. Simply put, it is not theirs until they pay for it.

I think this is the issue right here.

You need to stick up for yourself. Theres a lot of things that you can do in the initial contract, but the easiest thing to do is “politely” say that you are not continuing to to do any work until you are paid in full.

The fact that it’s gone on so long is a dangerous precident however. They may simply say “ok bye” and you’ll be left unpaid for months of work, it’s a very bad situation to be in but I think you need to take that stance because if you don’t they will continue to tag you along for even longer.

I think this is one of those things that can happen to everybody and you just have to learn from it and not let it happen in the future. It’s completely unreasonable to expect you to go a full quarter without getting paid.

I’ve heard clients say that kind of thing while at the same they’re making prototypes of your designs for their clients.

There is money, but they pay critical bills first. If you keep working without prompt payment… they have no motivation.

Take a stand. Halt work until you get at least a partial, then hold finished work til past bills are paid in full (maybe not the current work bill, to give them a chance to start acting professional).

I’ve had one client that used to be VERY slow to pay the last bill after I sent out final work. He always seemed to pay it when he needed new work though. For him, I started weekly invoicing so the payments weren’t that big and it cleared it right up

Chasing them in court is an option, but it might just waste a lot time. Outing them here ala Deez’s suggestion should be done, but benefits might not outweigh possible damage they could do to your rep + not allow you to repair the situation

I think the bulk of the advice centers around asserting your value… strongly and clearly.

Not getting paid sucks.

However, I do believe like any agreement, both sides are responsible. I’m not at all blaming the OP, but you need to stick confidently to your position, or get walked all over.

  1. Make reasonable demands. You can’t be lax for so long and all of a sudden threaten them with interest, contacting the clients and posting their name. That will get you no where fast.

  2. I recommend having a frank discussion with the principals of the firm. What exactly is the “cash flow issue”? It may indeed be BS, or just poor accounting.

  3. Balance your needs with their needs. They may truly have cash flow issues (i’ve dealt with many clients that have even larger companies), and being upfront about what you want and what they can provide can get you to a meeting point that everyone walks away happy from.

  4. What is your future plans with the company? If you plan on working with them into the near future, be careful how much you push. Not to you you shouldn’t be paid what you are owed or stand up for yourself, but it’s a different situation if you can walk away.

  5. 50% deposit or a retainer type contract is not at all unusual. I give all my normal clients a 50% deposit and due on presentation terms, though I normally get paid 10-15 days after invoicing.

  6. Lastly, in combo with #4, evaluate honestly what you provide and how your position stands. Who loses more if you walk away or get stiffed, while not providing final files? Think as they do and you can better evaluate your position and how much leverage you have.

Best of luck,


Trav is right about not outing people in public. I’d keep it within their company and not do any public internet postings. However don’t let the client say you’re “looking unprofessional” as a way to shut you up when dealing with them directly.

Actually one client’s co-worker/partner said my repeated requests for money made me look unprofessional and that I should not keep doing it. I had a quick come back for that. I said " If you want me to act like a professional then pay me like a professional. " You get what you pay for.

When I am paid like a professional I’ll act like one. :slight_smile: That shut him up good.

They’re just trying to make you uncomfortable and timid about asking for what they owe you. I used to be apologetic but when I thought about it more and grew a spine I faced the fact that they’re the ones who were putting me in a bad situation and they’re the ones who should be ashamed of themselves. This is my livelihood they’re messing with. You can be a nice person but firm. Nice does not mean push over.

I often see a tag team good cop bad cop act where maybe the head honcho looks like he’s kinda nice and befriends you while one of his underlings/partners make life hell for you. In reality it’s usually the boss that’s instructing the underling to be a jerk while the boss makes you think he’s a good guy so you give in to discounts, freebies, and consessions…cause he’s your “friend.” This is the classic “false friend” ploy.

Talk is cheap. See what people do, not what they say.

And that’s the way I would roll as well, but Deez was playing Devil’s advocate, ie. playing the role of the cheap-ass dirtbag that’s looking to get something for nothing, these people exist and that’s exactly what they do, look for some sap that isn’t covering his ass. Hell, they’re using craigslist because it’s free, if you use CL to advertise your freelance availability because it’s free what does that say about the value of what you bring to the table and/or how successful a designer you are?

I haven’t done tons of freelance and this is why. When I do it is always for people I know personally on a friends level, and only projects I find fun, rewarding, or interesting. My fulltie gig is more than enough “business” for me.


Thanks for the thoughtful advice.

I’ve slept on it, slept on it, gotten advice from friends colleges, parents and anyone who will listen.

At this point I am going to stop working for this client until I am paid for my outstanding invoices. It is irrelevant if their cash flow issues are jive or genuine. My rate is fair and the work I do is good. If they can’t or won’t pay I can’t work.

On outing the offender. While it is certainly tempting I’m going to keep the company name to myself. The design community is small and I feel as though I have little to gain by outing the company on an internet discussion board.

Again, thanks for the advice. I am currently drafting a tactful but firm email to those involved. I will keep you posted on the outcome.

I think that is a wise decision.

If you go to the grocery store to get a gallon of milk, the cashier says “that will be $2.50”, you say “I have a cash flow problem.” … guess who does not go home with the milk. You want to play you got to pay.Good luck, hope they realize the value you have been providing and it works out. If not, your better spending your time on clients who pay.

Someone I was talking to the other day said “I’m only interested in projects that will make me rich or famous, I don’t mind loosing my shirt if it is going to be a wildly publicized project, and I don’t mind busting my ass if I’m getting bank.” I think that is a good barometer. For myself I add in the category of projects I just really want to do and learn on.

To respond to Deez’s comments, no one is expendable on a project.

  1. You have to find a new person. This means new ads, calls, interviews etc. That’s a pain in the butt for your employer, because they would rather be golfing.

  2. Even if you have a competent designer at the door, you still need to bring them up to speed on the project, introduce them to project manager and other development people. It is all burning time and money that you would rather spend on developing product.

Deez: I’m glad you played devil’s advocate, but I would hate a naive young designer to whore themselves because of low self-confidence. I know there was a time when I would have taken your comments much more to heart. Now I know better.

In your contract state that they can view but not receive files until you have been paid, and that if payment is not received within X time frame, you retain ownership of the files and reserve the right to delete them.

EDIT- Deez is now gone permanently. Thanks all for your patience.


Cannot delete post… see below.

I am in this exact position right now with a long time customer, I mean exactly the same position. Typically work on-site, nice group, decent projects, good relations, ‘cash flow issues’, dodging, and all the rest. The customer and I are just now closing out overdue invoices that were submitted in September! (which incidentally is around the time my last assignment was over).

The advice so far has been pretty solid and has made me more confident in some rate/payment terms/IP ownership changes that I plan to make in the new year.

What I do:

Net 30 with invoices submitted first thing Monday morning for the previous weeks work.

1.5% interest on all overdue balances per month. Don’t be a softy about this one. You won’t be getting rich on interest but it is a solid reminder that you stick to your guns and expect to be paid for services rendered.

Reminders about overdue invoices (with interest) that are professional but firm.

Do try to be patient. Not being paid can eat at your head, especially with the ‘dodging’ then ‘cash flow’ issues that firms pull. It really is BS. If you cannot afford contractors, then don’t hire them. How many paychecks would a full time employee miss before saying screw it!

If you are in a position to turn down work, then go ahead and pull the plug until checks start coming in.

What I would NOT do (as a subcontractor):

Complain to the Customer directly about payment as it will just make all parties involved look bad, especially you. This could quite possibly get you and your principal fired.

Threaten IP ownership due to lack of payment, unless it expressly written into your terms prior to your beginning work on the project(s).

Hassle accounts payable excessively.

Discuss the issue with other workers unless someone asks or brings it up, and then be very careful what you say. There may very well be ‘cash flow’ issues that the full-timers are unaware of and could cause problems down the road.

Working on site makes things trickier of course. You can’t really just pack up your pens and take sketches off the wall at the end of the day and say Seeya! 'til I get paid… then show up the next day and do it again.


Whoa…what’d I miss?

Just some housecleaning.


Did he get nasty ?

I always thought he was quite amusing… but then I never got sucked into his trolling.