Home – New Forums Other discussions Designers, writers, etc: how do you avoid late payments?

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  • #991090
    Lauren Shay – Full Stop
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    Good morning.

    I am looking for some advice from other designers, writers, editors or anyone who provides similar services. Do you watermark the designs, writing, etc, you provide to your clients and then provide them with the final, high-quality file once they have made payment? Or do you ask for payment up front before you provide them with anything? I have had some late paying customers lately and I am trying to work out the best way of avoiding late payments, or worse – no payment (thankfully I haven’t encountered refusal to pay yet!!).

    TIA. :)

    Lauren

    #1179923
    Zava Design
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    Depending on the size of the project, my payments are either:

    1) 40% up front, 30% at some midway milestone, 30% after final delivery.
    or…
    2) 50% up front, 50% after final delivery (small projects).

    So for any substantial budgets, I’m only ever waiting on 30% once project is over, which if they’ve paid the other two in good time I don’t usually wait too long for.

    The initial payments are good tests for how prompt they’re going to be with paying, but having payments up front and midway through project ensure that any delays on their end impacts their project. Hence they usually pay fairly promptly. I’ve never really had any issues.

    #1179924
    BenAtherton
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    You could stipulate that late payments attract a X% late fee? People usually pay straight away if they realise there will be a penalty of some kind.

    Of course you should be taking a deposit of some kind anyway to cover your costs.

    #1179925
    Zava Design
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    For me that would add a bad vibe to my relationship with my client, and put me up there with traditional bill collection companies. I’d rather ensure the relationship didn’t need to get to that stage in the first place.

    #1179926
    BenAtherton
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    I can understand that and I dont enforce such a rule if it is a regular client. But if they respect you as a business then they should be happy to pay you asap.

    It is a catch 22 really, you need to get paid and can’t let people walk over you but at the same time you need their business!

    Usually where I get caught up is where the person im dealing with simply forwards the invoice to their “accounts” person where it is then put in the to-do pile and forgotten about!

    #1179927
    Zava Design
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    As someone who has never had payment problems from a client, I would suggest that the upfront payment + possible milestone payments must contribute to that.

    Plus good communication with the client at all times about the project itself but also their responsibilities in terms of feedback, payment schedules …etc. Communication is probably more important than even the specific payment schedule.

    #1179928
    BenAtherton
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    Yes you should communicate payment terms from the beginning but dont come across as too anal about it.

    A few other subtle tips that have worked for me are:

    – Include payment date at the top of your invocie in bold red then below the Total as welll.
    – Include a paragraph summarising your payment terms at the bottom of the invoice then a url to the full T&Cs on your website.

    #1179929
    Zava Design
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    My payment terms are outlined clearly next to the costs in my proposals, along with an estimated project timeline.

    That way they see both my expected schedule, but also clearly their’s.

    #1179930
    MissSassy
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    Hi Lauren,

    Sometimes clients will just be bad payers!

    You must however, make sure you have terms and conditions, created by a law firm so if you ever have to try and enforce payment you actually have a leg to stand on.

    Don’t be afraid to ask for upfront payment with new clients, it is not fair for them to use you as a credit agency and you probably can’t afford that either. Once you have a relationship then you can allow the credit terms that work for you.

    #1179931
    Tom ISW
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    I use a carrot instead of a stick. Before I start work, clients pay a 50% deposit. If they pay within 5 days of sending out my final invoice, I give a 5% discount on that remainder. If they don’t, they pay in full.

    To date, I’ve not had a single late payment using this system. Clients usually pay on the same day.

    #1179932
    Lauren Shay – Full Stop
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    Thanks, Ben, that is very helpful. I appreciate your advice.

    BenAtherton, post: 209790 wrote:
    Yes you should communicate payment terms from the beginning but dont come across as too anal about it.

    A few other subtle tips that have worked for me are:

    – Include payment date at the top of your invocie in bold red then below the Total as welll.
    – Include a paragraph summarising your payment terms at the bottom of the invoice then a url to the full T&Cs on your website.

    #1179933
    Lauren Shay – Full Stop
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    crushtor, post: 209845 wrote:
    I use a carrot instead of a stick. Before I start work, clients pay a 50% deposit. If they pay within 5 days of sending out my final invoice, I give a 5% discount on that remainder. If they don’t, they pay in full.

    To date, I’ve not had a single late payment using this system. Clients usually pay on the same day.

    This is a great idea, thank you.

    #1179934
    Lauren Shay – Full Stop
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    Thanks everyone for your advice. I think the option that would work best for me and my clients is paying 50% of the free upfront, and 50% at the end. I also think the idea of offering a 5% discount for early payment will work well, especially with new clients.

    Thanks again!

    #1179935
    Mirella Vertigo
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    Hi Lauren,

    We charge a 50% non-refundable deposit up front. When presenting a design for approval, we send a very low-res image with “CLIENT PROOF” watermarked all over it. We then send an invoice for the remaining 50% balance, and once cleared, we send high-res files.

    Payment terms are included in our client contract. After quickly realising that chasing up payment was costing money, we started charging a small late fee. We haven’t had a late payment since. We also offer alternatives for clients who can’t pay on time for whatever reason, as long as they notify us before the due date of the invoice. Regular clients who pay on time receive a percentage off their next project.

    I hope that helps. :)

    Mirella

    #1179936
    Lauren Shay – Full Stop
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    Mirella Vertigo, post: 209867 wrote:
    Hi Lauren,

    We charge a 50% non-refundable deposit up front. When presenting a design for approval, we send a very low-res image with “CLIENT PROOF” watermarked all over it. We then send an invoice for the remaining 50% balance, and once cleared, we send high-res files.

    Payment terms are included in our client contract. After quickly realising that chasing up payment was costing money, we started charging a small late fee. We haven’t had a late payment since. We also offer alternatives for clients who can’t pay on time for whatever reason, as long as they notify us before the due date of the invoice. Regular clients who pay on time receive a percentage off their next project.

    I hope that helps. :)

    Mirella

    Thanks for sharing that, Mirella, I appreciate it! That could also work well for my business. :)

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