Home – New › Forums › Other discussions › Designers, writers, etc: how do you avoid late payments?
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March 11, 2015 at 11:06 pm #1179937Up::0
Yep, like most here, some sort of % up front, with further %s as the project continues / finishes is the way to go.
March 12, 2015 at 1:44 am #1179938Up::0Lauren Shay – Full Stop, post: 209775 wrote: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
Hi Lauren,
It’s good to see the response you’ve received on this thread and the advice some people have given is really good.
I’d also like to if I may suggest another alternative which is using an escrow service like CheckVault.
You can use it to secure your payments upfront before you start the work. The funds do not reach you unless you finish the work as per contract hence the client knows that you’ll offer the service as expected. And you can work freely knowing that the funds are secure and waiting for you once the work is finished.
Now I’d like to mention that although I am suggesting a service which is the business I work for, my main intention was to offer an answer to the question you have asked and not to solely promote or drive business to CheckVault.
Wishing you all the best.
Regards
March 16, 2015 at 6:28 am #1179939Up::0Payment up front.
50% deposit, 50% upon completion but before the release of the final files.
Any clients that balk at this are not good clients.
Aint nobody got time for chasing payment!
April 24, 2015 at 12:06 am #1179940Up::0Those people that are asking for a deposit or stage payment, do you not start or suspend work if you don’t get it on time?
I also like the 5% discount idea, sounds like it works. I guess though for a late payer, who ignores this discount, it probably means you’re going to have a problem anyway.
April 24, 2015 at 12:15 am #1179941Up::0Regarding the carrot concept; I noticed last year on an invoice from Energy Australia that they added the late payment fee to the total by default, but it was phrased in such a way that it appeared like we would get an early/on-time payment discount.
Although deceptive, I was certainly intrigued by the psychology. I was much more committed to paying on time, even though I was paying what was due.
Obviously with fixed price agreements this extra fee will stick out more, but as an idea you could introduce an additional line next to the total:
Total if paid before X date: $100
Total if paid after X date: $120April 24, 2015 at 12:50 am #1179942Up::0I recommend using carrots and sticks – discount for payment within X days, late fee for chasing up client if unpaid Y 30 days, plus interest payable after Y days, and full indemnity for any legal or other enforcement expenses incurred chasing unpaid invoices. The late fee and interest can be waived at the discretion of the service provider.
April 24, 2015 at 4:55 am #1179943Up::0For me it’s 50% up front, and they don’t get the final files until the final payment is made. I don’t consider a payment late because if they don’t pay, they don’t get the work, simple as that.
April 24, 2015 at 5:39 am #1179944Up::0Besides a portion of the total payment being upfront (which could be 100%), the customers must sign in the “approved” square which includes words to indicate that an extra percentage of the fee will be charged if the total is not paid by the end of the month. If they still haven’t paid, I take legal action and charge the clients the costs associated with this action. If that happens, the customer is deleted from my list of clients.
April 24, 2015 at 7:50 am #1179945Up::0For my services it depends on the type of contract. I have both an ongoing fee engagement offer and a project offer. For the ongoing fee engagement we negotiate the monthly fee, I bill monthly, but ask clients to set up an automatic bank transfer to pay weekly. For projects, it’s similar, except I take a 50% upfront fee and then discuss incremental payments, whether they’re weekly, fortnightly or if it’s a long project monthly.
Because I work with small businesses who need to carefully budget their weekly cashflow I’ve found the incremental payment method to be the most successful. My clients have appreciated knowing the total and knowing they can then budget the weekly amount in with their other expenses.
In terms of what happens when clients don’t pay, well, I recently started a new contract for an organisation that was to become an ongoing fee engagement. The nature of the work I do means I need to know I can trust the owners and they can trust me very quickly. To establish that rapport I set us a ‘hurdle project’. This tells me very quickly what they’re like to work with, and whether I want them as a client – and vice versa.
In this particular instance, I decided that the contract was not one I wanted to continue. They tried to not pay the invoice. Rather than get my lawyer involved (at $400/hr) I decided to simply retract the recommendations I had made to my network for their services. One very simple email to the people I had referred to them; word got back and I got paid.
April 25, 2015 at 3:28 am #1179946Up::0No matter what business you are in you must clearly state the terms of payment. When we were in the construction industry there was one builder who l had to chase up payment every time. So the next account l just asked for payment by a certain date and he paid before that date and for him l kept on doing it, he was not offended by it – l thought l might offend him! Put your terms of payment on your quote and or invoice (and stick to your guns about getting paid). Everybody else does, if you are late in paying they chase you up. You have to do it – be strong you are running a business not a charity. No it is not nice to phone, email about late payments but think about your cash flow.
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