Following on from my post about how I get paid by clients, I received this question about the risk of not getting paid at all:
“My one big fear of the Internet is not getting paid for services performed. How does one handle that?”
I’ve had a couple of times where I didn’t think I was going to get paid, but after following up a number of times the client did pay eventually. His bookkeeper hadn’t got around to it. But there is sometimes a niggling doubt, until that cash hits your bank account. He was a regular client so I wasn’t too worried, but you never know!
Another time I was engaged to design a website for a client. It was all very exciting because it was a quite a big company with an extensive range of products and they wanted a pretty big site. The person I was dealing with was very clear about what kind of website they wanted and showed me examples of other sites that they liked, wanting something similar.
So I started the work and everything was going well. Feedback was good about the work I had done so far.Then one day I got a call from the person I had been dealing with. He said that they had brought in a new manager who was going to be responsible for the web project. OK, no problem, I thought, until it transpired that the new manager had completely different ideas for the website and could I do a completely Flash-based site?
I don’t do Flash, and I made it clear that I wasn’t going to be able to do it. The project was cancelled, and they probably went off to find another designer. By that time I had done just over half the work. Fortunately I had negotiated a 50% deposit in advance before starting the job. This is standard in the web design industry and you can see why!
Other times, I have to admit, I have listened to gut instinct about clients, and sent them the work trusting that they would pay me. Most of the time, these were not big projects, so I was mitigating the risk. I was also doing it to show goodwill – often a client looks like they are going to turn into a regular, ongoing client, so I wanted to extend that trust and it always worked out. Touch wood, I’ve always been paid. I’m not recommending that everyone do this, but sometimes it can pay off.
Here are some other ways to reduce the risk of not getting paid:
If the client is new and local, you could arrange for them to pay on delivery.
For regular clients that you know well, arrange to bill monthly or fortnightly. Typical terms are 7 or 14 days nett. Put systems in place to remind yourself to check your bank account at specific times of the month and follow up with clients that are late. It’s easy to overlook following up with clients who are late with paying their bills, but it’s important. The longer you leave it, the more problems can occur.
With clients who want to use your services for a regular number of hours a week, agree to a retainer at a slightly reduced hourly rate, where they pay you for a certain amount of hours upfront. The benefit for you is that you get paid in advance, and the benefit for the client is that they get a slightly cheaper rate and know that you’re definitely going to be available to help them because they’ve ‘booked’ you for a certain number of hours.
Whatever terms you decide on, put these in writing in your Work For Hire / Services Agreement.
If anyone has any other tips or suggestions about how to make sure you get paid, please add a comment below!