12 Effective Ways to Get Paid by Clients on Time
Honestly, who likes to ask for money? In case you are working in the creative industry, it’s probably part of your job to ask clients for money. Situations like that often make us feel ashamed or give us an uncomfortable feeling. But why? We did great work for our clients and we put in a lot of effort. This is money we deserve.
Clients are, surprising as it may sound, human beings like you and I. Maybe they just forgot to pay you before a certain deadline. But there are other clients as well. Clients who exploit situations like that. They change their opinion after every draft or they just don’t want to pay the pre-agreed money.
But no worries, there are some great tactics to make them pay. In this article, I am going to introduce you to 12 tips which will help you get your well-deserved money on time. Without feeling embarrassed and without the fear of getting no subsequent orders. Let’s go!
Excite Clients with Quality
I know this seems like dopey advice. In your opinion, your work should always be great. And it should always excite clients. Otherwise, you should not send it out. But you are not able to affect a client’s feelings. Sometimes clients are chronically dissatisfied. You have no influence on that.
If your work is indisputably well done, your client will pay on time. If there are discussions about your work, you should have reasons behind everything you did. If that is a proven fact, the client will ask for more work. I am pretty confident about that. So just do a great job and become your client’s best option.
Using contracts may look a bit clinical and distrustful. Nevertheless, contracts give you the security of knowing that you are going to be paid in any case. Of course, there are some things you have to consider. Primarily, your contract has to be uniquely defined. Especially when it comes to feedback loops, change request and payment deadlines. Your requirements, accomplishments, rates, deadlines and milestones should be unambiguous.
Don’t experiment with contracts. I am not a lawyer, and this is just general helpful advice. In case contracts are completely new territory for you, you should ask an expert for help. I know, lawyers are expensive. That’s why I would recommend working with a template. When it’s done right, you can easily adjust it for all upcoming requests and further projects.
Use contracts to be on the safe side.
Offer Benefits for Paying on Time
This aims to give your client a good feeling when he or she is paying your bill. Offer small benefits that excite your client. Take your client to a point where he or she wants to work with you again. If there was no trouble during earlier projects, try to make the client a regular.
Offer price reductions for further projects. If you did a great job, this is an additional motivation for your client to hire you again. He or she saves costs and you get the chance to complete subsequent orders.
Make the Payment Process Run Smoothly
By adjusting your client’s usual behaviour you can show interest in his or her prefered payment process. Clarify that you want to deal with this process with less effort and time. Clients really like that.
Find out how his or her usual paying process is done. By credit card? Via PayPal? Or the good old bank transfer. The way doesn’t matter. All you want is your cash on time. Never offer payment systems you are not familiar with. Otherwise it will backfire.
An additional advantage is that you can take away your clients excuses. In case he or she paid the first 1000 times via PayPal, the 1001th time should be easy. No doubt about that.
The first and most important skill is to know your strengths and weaknesses. Start every new business with a dialogue to hear what the client wants, analyze what he needs, if you can deliver it, and how he deals with suggestions. Side effect: You assess, if he’s professional and/or pleasant. Thereafter you have the opportunity to accept the brief, discover that you “don’t have the time or skills for this project” or simply realize that your dog ate your laptop.
Elias Kouloures, Freelance Strategist, Copywriter & Filmmaker
Build a Personal Relationship
This is a powerful yet difficult strategy. Try to build mutual trust by communicating on a regular basis. Unfortunately, in many cases it is just not possible to meet up in person and get to know each other. But hey, there is social media, video conferences and many great ways to communicate without meeting up in person.
Whenever you have got the chance to build up such a relationship, do it! Let me give you an example. Who do you let down more easily? A friend or somebody you just met online? You see. Make it hard for your client to leave you behind.
You should work as a team. Not as opponents.
A great way to make clients pay on time and lower your risk is to split payments. Either you do it just for new clients or you implement it as a standard. I would recommend the splitting of payments in parts such as 25/25/50.
25% prepayment before you start working on a project. You should request the next 25% after you finished the first draft. So, before you reach the point of annoying feedback loops and tons of changes you already have received 50% of your salary. Assuming you mastered all the changes and you satisfied your client, ask for the last 50%.
“Clients trust you to deliver the best creative outcome you’re capable of and you trust them to pay on time. Unfortunately this attitude doesn’t work all the time.”
Christoph Gey, Freelance Digital Art Director
Implement Retainer Agreements
For long term jobs you should offer retainer agreements. Nowadays, everyone is familiar with monthly payments. And there are good reasons for that. People prefer to pay small amounts every month rather than paying a large amount at the end of the year.
I recommend using small, monthly rates. Why? Because they feel much more comfortable to pay. I pay $9.99 every month to get Spotify Premium. This amount can easily be compared to other amounts of money I spend monthly or even daily. If I would skip the $5 breakfast twice, the Spotify account would be refinanced.
When I receive a $120 bill at the end of the year, there are no daily amounts I could compare this to. This makes the amount feel much greater. Your clients would end up feeling the same. In addition, there is a big chance that he or she will pay monthly rates via an automated bank transfer system. So there is no possibility to forget about your money.
“Lowering the commitment level is very useful when trust has not been established. It allows your dream client to agree to low level commitments that have little or no risk attached to them—other than you not making that time valuable for them.”
Anthony Iannarino, Executive Sales & Marketing Leader
Always try to be on top of negotiations. Try to control the conversation. You should always be on the hunt for the best deal for you. Again, for you. The trick is to give your client the feeling that he’s the one getting the better deal.
When it comes to pricing, you should add 10% to your standard rates in your mind. Now tell the client your increased rates. In the following sentence you mention that there is a 10% discount, if the client pays on time. It’s that easy. Now your client will make every effort to save the 10%.
Fight for the best deal.
Use Accounting Tools
Do you remember the introduction of this article? I mentioned situations we try to avoid because of the shaming feeling. Modern online billing tools can take away the fear of such a conversation. There is no longer a need to write several emails to remind your client to transfer money. All you have to do is to define a deadline and a space of days within which you would like to remind your client.
I don’t recommend using these tools when the matter concerns personal relationships. In cases like that, a simple phone call should solve the problem. Clients sometimes just forget to pay on time.
If clients are not willing to pay, it’s easy to reduce the time interval between reminder emails. Furthermore, billing tools are able to support you in creating bills and accounting. So you can save time, money and nerves.
Hold Your Work Hostage
If there is a sign that your client will not pay on time, or you already had some bad experiences with certain clients, don’t hesitate to hold your work hostage. This strategy may have an impact on your client relationship. But you are not the bad guy in this story!
It’s important to communicate in a friendly manner. Don’t provoke with angrily written emails or phone calls. You keep the hostage. Keep cool and argue matter-of-factly. Never get cheeky or offensive. Perhaps your client will accept the situation and there is still a backdoor for subsequent orders.
Relax, People Make Mistakes
To wait and see seems like an important concept to grasp in the freelancer’s everyday life. According to Christoph Gey: “Most of the time problems don’t arise because your client isn’t willing to pay you at all. Mostly it’s because he simply forgot, the financial department goes through some changes or other small but solvable problems. Remember that you’re always dealing with people. And people make mistakes.”
Just relax and keep cool.
Avoid the Legal Stage
Although contracts put you on the safe side, you should avoid taking matters to a legal stage. In most cases, it is sufficient to have a contract up your sleeve. Usually, nobody is looking for a lawsuit particularly.
Going to court means having to spend a lot of time, energy and sometimes money on top of it. Furthermore, if you get involved in a legal battle with your client, that client is gone. No backdoor, no second chance. Other clients may hear about it as well. Whenever it is possible to choose another way, you should take it. But if there is no way out, you should fight for your money and take what is rightfully yours!
1. Excite clients with quality. If there are discussions about your work, you should have reasons behind everything you did.
2. Use contracts. Contracts give you the security of knowing that you are going to be paid in any case.
3. Offer benefits for paying on time. Take your client to a point where he or she wants to work with you again.
4. Make the payment process run smoothly. Find out how his or her usual paying process is done.
5. Build a personal relationship. Try to build mutual trust by communicating on a regular basis.
6. Split payments. A great way to make clients pay on time and lower your risk is to split payments.
7. Implement retainer agreements. Nowadays, everyone is familiar with monthly payments. And there are good reasons for that.
8. Negotiate smartly. The trick is to give your client the feeling that he’s the one getting the better deal.
9. Use accounting tools. There is no longer a need to write several emails to remind your client to transfer money.
10. Hold your work hostage. Don’t hesitate to hold your work hostage.
In Addition: The easiest way to make reviews and approvals more efficient is our web application Filestage. It is a tool to share, review and approve files with clients and co-workers.
More information: Visual Feedback On Creative Projects
What are your experiences? How do you make clients pay on time? Let me know in comments. We at Filestage really looking forward to discuss with you.
Julian Sieber is a marketing associate at Filestage. He thinks that through exciting people, marketing is no more like selling.