Top Tips on How to Stop Struggling to Get Paid for Freelance Designers

by Laura Spencer

July 23, 2013 in Business/Freelance

US one hundred dollar bills falling from a blue sky.Have you ever had trouble getting a client to pay you? Some freelance designers struggle to collect the money that is due to them.

From a freelancer’s perspective, getting paid is the most important part of the project. The money we get from freelancing pays our bills and helps us to stay in business.

And to be honest, no one wants to spend weeks (or even months) trying to collect from a former client. But sometimes, payment problems happen anyway.

Happily, there are some steps you can take to reduce or even eliminate payment problems. In this post, I share some tips to help you get paid including the seven steps of effective invoicing and five invoicing tools. If you enjoyed this post, you may also like The Nitty Gritty Details Freelancers Need to Know About Getting Paid.

Start With a Businesslike Approach

As you approach a client, it’s important to do so in a businesslike manner. They need to realize that you’re a professional who gets paid for what you do.

All too often, freelance business agreements are casual, informal matters. But being too casual when you are running a business can be a mistake.

get-paid-businesslike

Be upfront about your fees and don’t apologize for them. You want the client to understand that you will be paid for your work. You aren’t just doing them a favor.

Above all, have a defined process for invoicing clients and follow it.

7 Steps of Effective Invoicing

Effective invoicing begins before you ever send the client your first invoice.

Here are seven steps to help you develop an effective invoicing process:

  1. Charge a high enough fee for your services. This point may seem out of place in a discussion about collecting payment, but it really isn’t. If your rates are too low, the client is more likely to view you as an unprofessional hack and try to wiggle out of payment. Unscrupulous clients know that you aren’t going to hire an attorney to collect $25 or even $50.
  2. Include payment terms in a written agreement. It still surprises me how many freelancers do business without getting a contract or at least a written agreement from the client. Getting it in writing is a good idea for both parties to any business agreement. If the client balks at a more formal agreement, I have to wonder about their intent.
  3. Ask for an initial down payment. Some freelancers hesitate to ask for a down payment, but reputable clients understand why it is necessary. Getting a down payment is an accepted practice in several industries. The amount of the down payment freelancers ask for varies, but I recommend collecting at least a third of the project amount in advance.
  4. Break large projects into phases and send an invoice for each phase. Another problem freelancers run into is with extremely large projects. If they wait until the end of the project to bill, they could go weeks or even months without payment. You can solve this problem by dividing a large project into phases and billing the client for each phase. (Be sure to include this in your written agreement.)
  5. Bill immediately after project delivery. Billing for your services should never be an afterthought. The sooner you invoice the client, the sooner you can get paid. Ideally, your project delivery should be fresh in your client’s mind when they receive your bill. Sending out your invoices is just as much a part of your job as creating designs.
  6. Send payment reminders promptly. Once the payment due date has passed it’s important to stay on top of things. When they don’t receive payment, some freelancers are hesitant to contact the client. Don’t be. You’re not in the wrong for asking for the money that you are owed. The client is in the wrong for not paying you on time.
  7. Track your income receipts. Finally, keep an accurate record of all payments that you receive. It’s important to do this so that you are aware of late payments. Accurate recordkeeping will also help you when it’s time to pay taxes. Fortunately, there are some great online tools available to help you with your freelance bookkeeping tasks.

Sometimes, despite your best efforts, your client still doesn’t pay on time. When that happens, it’s a good idea to have a plan.

What to Say When They Don’t Pay

If your client is late with their payment, you might struggle with how to approach them. Rather waiting until a payment is late and then struggling to come up with a payment reminder, create some late payment templates that you can send out quickly.

Here are some of the things I say to late paying clients:

When the payment is just a day or two late, I usually assume that the non-payment is just an oversight. Sometimes, just sending the bill again is effective. Or, I sometimes send a note that reads something like this:

Dear Client, Thanks for giving me the opportunity to work with you on the XYZ project. This is a reminder that payment for XYZ project is now due. For your convenience, I’ve attached the project invoice to this email. Please let me know if you have any questions.

This is often the only reminder I need to send. Of course, if the client replies that there is a problem, you can take steps to resolve the issue.

After several more days, if I still haven’t received payment from the client the note reads something like this:

Dear Client, This is your second notice that payment on XYZ project in the amount of $X.00 is now due. Thanks for your prompt attention to this matter.

I rarely have to go to the next step to collect payment, but if I have to, I’ll send another reminder that looks something like this:

Dear Client, Your account with My Business Name is in jeopardy. Your payment in the amount of $X.00 is now seriously overdue. Please take immediate action to correct the problem.

At some point, if you are still not getting payment you will need to make a decision about how far you will go to collect your money.

Notice that I don’t wait very long before sending out the payment reminders. Since I receive most payments through online tools, there’s really no excuse for a late payment. For the rare client who still pays by snail mail, I do wait a little bit longer before sending out the first late notice.

Also notice that my language becomes more formal and less friendly with each successive reminder.

5 Invoicing Tools

If you’ve never done it before, you may be wondering how to put together an effective invoice.
get-paid-invoices

Of course, you could create an invoice using your word processing tool, but that might be time-consuming. Plus, you’d still have to enter the information from the invoice into your bookkeeping system.

The good news is that there are many tools that combine bookkeeping and billing. Some of these solutions are free or are available at very little cost to the freelance designer.

Here’s a list of five invoicing tools you may want to check out (in alphabetical order):

  1. Billings Pro. The company behind has been around for 14 years. There are three payment plans, including one for freelancers. A free trial is also available. There are quite a few features, including 30 invoice templates and extensive training videos. It works on Mac operating system or on iOS.
  2. CurdBee. CurdBee offers a free version of tool and even the paid versions of the tool are available for a relatively low cost. This tool can be integrated with Google Checkout and PayPal. Other capabilities include the ability to create estimates, track time, create reports, and more. Some features may require the purchase of expansion modules.
  3. FreshBooks. This tool offers a 30-day free trial and there are four levels of pricing. FreshBooks allows for expense and time tracking as well as reports. It can be connected to a bank, PayPal, or an American credit card. There are also apps for the iPhone and iPad. Freshbooks is a cloud-based solution.
  4. PayPal. Many freelancers forget that PayPal has a basic invoicing feature built into it. You can also copy existing invoices to re-use them, set up templates, or send payment reminders. Of course, there are fees associated with PayPal transactions.
  5. Zoho Invoice. Zoho contains a whole suite of office productivity software. They have three pricing plans, including a free plan. All of the plans include the capability of estimating, time-tracking, and expense tracking. There is a mobile app for iPhone or Android devices. You can accept online payments from a wide variety of sources including PayPal, Google Checkout, Authorize.Net, or Stripe.

Your Turn

What’s your process for collecting payment for your design projects? What billing tools do you use?

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About Laura Spencer

Laura Spencer is a freelance writer from North Central Texas with over 20 years of professional business writing experience. If you liked this post, then you may also enjoy Laura’s blog about her freelance writing experiences, WritingThoughts. Laura is also on Google+.

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