By Lori Widmer
Show of hands – how many of you have had difficulty getting a client to pay your invoice? Again, show of hands – how many of you have a process in place for securing payment? You don’t? That could be your problem.
As writers, we are great at the creative process. But as business people, we can suck. We think nothing of paying our bills, so we assume our clients will offer us the same courtesy. However, there are some unscrupulous people in the world who will avoid paying you if at all possible. That’s why you should have a payment process in place.
Other businesses, like healthcare providers and utility companies, have a process. If you don’t pay on time, you’re charged late fees. If you don’t pay within a set number of months, your bill is sent to collection agencies, who then pester you for payment. You need to take a similar approach. And there are a few ways to do it.
My process is this – I send three invoices. The first invoice is for the amount due. Thirty days later, I attach the first late fee. Mine is 25 percent of the amount due. Sixty days later, they get my last invoice, one more late fee (compounded onto the last month’s inflated total), and the following line attached to both my emailed communications and my invoice: “Please pay upon receipt to avoid litigation.”
In every case where I’ve had to use that line, clients have paid. In a few cases, clients have argued the quality of the work. Nothing doing. If there are problems with the content, clients must bring those up during the project, not upon threat of legal action for their late bills. It’s a common stall tactic. Once you see it a few times, your ego becomes immune.
Your process needs a small-claims process where you follow up that litigation notice with filing action. If so, try to file in the county where your client does business. It’s much easier to collect on that judgment than if you were to file locally.
You can choose also to hire a collection agency to collect those late bills. True, you’ll split the amount collected with the agency, but they tend to collect the full amount – including late fees. I’ve had no luck getting any but one client to pay the late fee owed.
The idea behind the payment process is to protect yourself against those few clients who insist on making it hard for you. If you establish the habit with every client, it’s much easier to collect on any litigation proceedings, and you’ll find fewer invoices slipping through the cracks.
Image from http://www.sxc.hu