Freelancers! Learn how to deal with deadbeats effectively
Freelancing can be a great way to make money, whether it’s on the side or full time. However, what can an individual do with late-paying customers, or ones that do their best to be deadbeats? Here are the most common types of problem customers freelancers face, as well as how to deal with deadbeats.
Deadbeats claim the check is in the mail
Every freelance worker has clients at one time or another that are absent-minded, cash-clutching, or both. The key to keeping them on track after invoicing clients is to remind them regularly via collection letter that they have an outstanding balance due. Reminder letters can be friendly and assertive, as a reminder to pay for services rendered or products delivered.
If the due date listed in the letter or email passes, call the client immediately. If time continues to pay, more sever reminders are appropriate. Just make sure the client clearly understand the consequences of blowing you off.
Creative ways to deal with deadbeats
If the standard rounds of collection letters don’t do the trick, freelancers can result to more creative means of getting a deadbeat client’s attention. Instituting a payment plan may be all that it takes to get a customer back on track. If the customer is generally cash-poor, they’ll appreciate your efforts to work with them, and you may actually get some of the money.
Unfortunately, some clients are perennial problems. Reminders and payment plans don’t work, so a freelancer might consider not doing business with such clients again. Don’t be so eager to extend future credit to customers who consistently pay late, in partial or not at all. Run credit checks if you believe you have any reason to worry. Your time is valuable in the end, so why waste it on deadbeats?
If a client disappears before they can pay and they’re far beyond all due dates, consider bringing in a pro debt collector.
How to deal with deadbeat clients – Common steps
- Get a signed contract. Use an invoicing system that automatically sends 30-, 60- and 90-day past due notice.
- Use email and telephone to send additional reminder notices. Make it short, such as “Hi, I notice you haven’t paid. Let me know if there’s a problem or if you think my records are wrong.”
- Don’t work with non-paying clients. They’ll overpromise and underdeliver, time and again. Establish a clear cut-off policy, a point after which you’ll refer a client to collections and no longer work with them.