A guide to handling unpaid invoices and refusenik clients.

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Creativepoolers in the fortunate position of holding down a fulltime staff job will be familiar with the warm glow of the monthly payslip. Sure, you'd probably like the net total to be larger, but at least your earnings show up on a predictable basis.

For the 'umble freelance (of which I am one), the fiscal merry-go-round is a much more haphazard affair. Once we've completed a job, in goes the invoice - then the waiting game begins. The law allows the client thirty days to pay and, with a bit of luck, the fee arrives within that period. Some clients are a bit tardy, others very prompt - but generally speaking, everything comes right. Except when it doesn't.  There are occasions, familiar to every self-employed creative, when it's clear the client is transforming into a cheat - they do not intend to pay for the work with which you've furnished them. Frustrating, infuriating and financially perilous - just what does one do when  owed for a job and the funds don't follow?

Here are some tips. I hope they're helpful:

The contract
Make it a policy to produce a contract for every project. This may seem a lot of work, but it's excellent protection for you and your client.  You can find sample contracts via a Google search (there's one here), or build your own. Either way, ensure it includes full details of the work you intend to undertake, all the costs for which you intend to invoice and exactly what you expect of your client. The document should be signed by both parties and copies retained on both sides.

The contact details
It's amazing how many freelances take on jobs without having a full postal address for the client. Because so many conversations are held over email, SMS or social media, it isn't uncommon for the client and supplier never to meet face-to-face. This isn't necessarily a problem, but if things go astray, you will need a valid, physical address to pursue payment.

The deposit
This is standard practice and simple common sense. Before you start work, ask the client for 25% - 50% of the total cost. The balance then falls due on completion, or in portions as benchmarks and deadlines are met. This protects you from complete loss if your client vanishes, stresses the value you place on your time and helps with your working cash flow. Any client refusing to pay a deposit should immediately be viewed with suspicion and is probably left well alone.

The statement
Bunging in a hand-written invoice on a grubby sheet of A4, months after completing the job is not only unprofessional it almost invites late or non-existent payment. As a one-person business, you should produce the same 'paperwork' as a bigger company. This means a timely and properly produced invoice and regular statements. Showing you are serious about your accounts and are actively monitoring your invoices can produce miraculous results. Fortunately there are many, free to use bookkeeping systems on the web. Brightbooks is a particularly strong contender.

The sanctions
Once you're sure your client is avoiding payment (and you should be completely sure as taking action will undoubtedly compromise your relationship), you should stop work on any project and refuse further briefs until all overdue and unpaid invoices are cleared. New clients should be prepared to pay before a project is released. Further work can follow a more relaxed path, but at first, you should keep a tight hold on the reins. If you have been forced to 'down tools' due to non-payment, politely and calmly explain to the client why this has happened and under what circumstances work will resume. Don't be pressured, don't be threatened - be strong and never cave in to demands.

The legalities
It is crucial you know your legal rights before a problem arises. You should always pursue a late payment as soon as it becomes overdue. At first, this should take the form of a simple reminder. If no payment and/or response is forthcoming  be persistent and firm. There is no point at which you are legally entitled to make threats or be abusive, so don't resort to these tactics, no matter how angry you are.
Instead, write to the client and explain you are exercising your right to charge a £40.00 late fee and add 12% to the original invoice. Then send a new statement with these charges added. Stress that interest will be accumulating as long as the bill goes unpaid. This should be enough to loosen the purse strings.

If it isn't, you should then inform the client you will be taking steps to recover the debt. The best way to collect a modest sum is via the Small Claims Court - details of using the SCC can be found here.
For larger sums, you may well need the help of a solicitor and/or  a debt recovery service. Again, do not be tempted to send some big guys round or show up and start taking the client's stuff away. It may seem like a handy solution, but you'll quickly end up on the wrong side of the dispute and the police.

The tiresome truth
Unfortunately there will always be times when a client goes bad on you. Hopefully this will be a rarity and matters can be resolved quickly when the problem does occur. But if matters become serious always be calm, reasonable and professional  as well as assertive, determined and robust.

Good luck. 

Magnus Shaw is a freelance blogger, freelance copywriter and freelance consultant



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