Tough Clients & Late Payments
Late payments are inevitable when working for yourself. Although not frequent it does happen from time to time. Often with large clients the people hiring you are unaware of the finance guys holding out on payment and a simple phone call to your client can rectify this. Keep in regular contact as invoices can mysteriously just slip through the cracks? Polite persistence is a good way to go.
A good approach is to start softly and enquire as to whether there is a problem. “Did I send the invoice to the correct department” or “I’m not sure if you guys received all the necessary paperwork to process this invoice”. Also always ask for when you should expect payment to organise your finances, which prompts them to give you an estimated time of arrival on the money while reminding them that this is your income they’re holding back. Communicating through email is good, as you have documented proof of the job request, so never delete emails until after payment has been received.
If it turns out they really are holding out on you, be mindful of your clients financial issues but not responsible for them. Any upcoming jobs for this client should be used as a pivot point to get the previous one paid. When you call for payment status, the trick is to be persistent to the point of being annoying yet always polite. Don’t get upset, stay calm and Stay on the subject which is when are you going to get paid?
Build in a late payment tax for serial offenders. If they don’t like your prices then you’re better off without them. Alternatively put in your terms and conditions that you charge interest for late payments? This approach is a client by client approach in order to not frighten off potential new clients.
In Australia at the time of writing, the majority of large advertising agencies have policies of “end of month plus 60 days” for payments. This can translate to three months if an invoice is submitted at the beginning of the month Be mindful of your clients payment terms as being late by a single day can result in an extra month.
Simply put when it comes to tough clients evaluate whether or not they are really worth it. Is the stress and additional work of chasing invoices worth the money or should you retrench all the tough clients and free up your time to concentrate on good ones.
As always use your best judgement which will improve with time.