Financial management

6 tips for dealing with late payments from trusted clients

- December 19, 2018 2 MIN READ

If there was ever an issue that binds all soloist, it has GOT to be this one. Dealing with late payments!

Meet Caitlin.

She’s a member of the Flying Solo forums and a partner in an up-and-coming graphic design business, Sonja Meyer – Sustainable Graphic Design Studio.

Despite the recent success, she and business partner Sonja have encountered a very common soloist problem: how to deal with clients who don’t pay on time?

Caitlin writes: The only problem we’re having is that the majority of our client’s have stopped paying us on time since the upscale! It seems the clients who have been working with Sonja for a long time are getting a bit TOO relaxed about the relationship…

One long term client who is based in the States engaged us for some work at the start of July (!!) and still has not paid their invoice 3 months later… and is now ignoring our emails?

Sounds familiar right?

And here’s the crux of the dilemma:

“At what point (1, 2, 4, 6+ weeks overdue) can we say or do something about it? What, if any, are our options?”

Protecting yourself and keeping your client happy

The conundrum is real and we’re all going to face it at some point.

On the one hand, you NEED and should be paid, but on the other, you need to keep the trusted client on side to ensure future business relationship is maintained.

So what can be done?

True to form Flying Solo members shared some terrific ideas – a summary of which follows below:

1. Use an administration fee, says member @elissa.doxey:

“In a previous life, I used to add an administration fee if we had to follow up on late payments. It wasn’t an outlandish amount, but somewhat compensated the time and effort (although not the monetary value) of chasing up invoices.”

2. Set your own time-frame for chasing payment and stick to it, says @bert

“If they are a new client I will start hassling them before the next visit, or if none planned, after about 2 to 3 weeks. If an established client with a good payment record, I let them go up to about 4 weeks, before a gentle reminder, which is normally followed up by a huge apology from the client as they have let is slip. I definitely wouldn’t leave it beyond 4 weeks even for an established client.”

3. Establish aggressive timelines (but without the aggressive manner), says @paulb

“We have good results being aggressive in our timelines, versus  being more passive. For creative work, I think 50% up front with at least a further 30% when the final draft is approved is the way to go.”

4. Take a percentage as down payment, says @elissa.doxey:

“I always advise (creatives particularly!) to take a deposit up front, and depending on the length of the project, another at a certain timeframe/deliverable, and the final payment on handover.”

5. Offer a ‘choice’ in payment options, says @tomISW

“I have two payment options: 50% deposit/50% on completion, or 95% up front (5% discount.) It’s been working quite well so far.”

6. Get an imaginary bookkeeper *wink*, says @bert

“If it’s something I would feel uncomfortable saying, my bookkeeper sends out the reminders. Note that I don’t employ a bookkeeper, but gee she writes very compelling emails, and I get to choose her name to put on the bottom of the email.”

Do you have any ideas for dealing with late payments to add to this list?