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Your Payment Process

paid writing invoiceBy 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.

Lori Widmer blogs at Words on the Page. You can learn more about her at her business site, and if you want to follow her on twitter it’s:http://twitter.com/LoriWidmer

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{ 9 comments… add one }
  • Thanks, Allena!
    .-= Lori´s last blog ..Will Specializing Save Freelance Writers? =-.

  • absolutely priceless advice, Lori. I’m going to send my About reader here to see your process! I LOVE the fee tacked on.
    .-= Allena´s last blog ..How I Know You Are All Slacking, Freelance Writers =-.

    • Anne

      Lori is priceless isn’t she?

  • Carol, it does get their attention. And it gets the bill paid!

    I think 2-3 percent is low if we’re talking a thousand bucks or less in invoice amounts. Sometimes the late fee would add up to a few dollars and no client would notice or care about that. The 25 percent I charge usually results in instant payment. I’ve avoided a lot of litigation threats that way!

    Lauri, some clients have odd billing processes. It’s weird to me that they expect us to amend our own processes to mesh with theirs. A novel idea – pay within thirty days! What a concept! Yet some of them refuse the late fee because “It’s our policy to pay within 6 to 8 weeks.” Great. And did you consider what my policy is? I attach a late fee. I don’t modify for someone else’s process. If a client calls me directly and asks for a waiver of the late fee, it’s waived for 10 days tops. Then I’ll know if it’s a stall tactic. I hate being that strict, but I’ve been burned so much I feel like an overdone marshmallow. 🙂
    .-= Lori´s last blog ..What Lost Taught Me About Freelancing =-.

  • Woo! You are harsh Anne. 25%! I love it. Bet that gets their attention.

    I charge like a 2-3% late fee a month for a couple months, then hit the litigation button. But I really haven’t had to go there — usually the first month when they see I will ask them to pay more the longer they wait, they fire the check right off. Sometimes they actually pay the late fee and sometimes they pretend they didn’t see that and mailed it before my second bill…but in any case, the check usually shows right up.
    .-= Carol Tice´s last blog ..A Poll For New Writers — Take It, AND Take $50 Off My Mentoring Service! =-.

    • Anne

      Carol, it’s Lori who wrote the article for my blog… but I take your point… but Lori’s comment back to you also makes sense to me.

  • Lauri

    That many writers are more creative and less business-oriented is a label that I’d encourage many fledgling writers to dodge. I was just recently reminded that too many writers approach their work as a hobby, or a craft, rather than as a business. Approaching your writing as such is great if you do it in your spare time or are working on a personal piece. But if you want to make a living at it, you must think of yourself as a business person first and foremost.

    That said, I modify my invoicing process per the client. For example, some large clients I work for take 6 – 8 weeks to remit payment. That’s fine with me, and I just keep careful tabs on where my invoice is in their system, and manage my own funds appropriately in the meantime.

    On all invoices, I include a unique project ID and number, all contact information, my SSN, the project title, and also a fairly thorough description of services – sometimes this is taken from the contract I’ve signed for the work.

    I then have two very simple baskets on my desk: submitted invoices that have yet to be paid; and invoices paid. When an invoice is filled, I write the date it was paid on it in large red Sharpie hand. This is both so I know it was paid and so I know which quarter to pay estimated taxes on it.

    Great post! Having a solid invoicing system is critical to the functioning of any business – of course this includes writing.

    • Anne

      Unique numbers for each client is a great idea…

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