Over in our forum one of our members told story about how a writing client hinted that they might be running out of money to pay him.
“What should I do?” He asked. “Do I stop writing for them? Do I limit my deliverables to what I’ve already been paid for? How can I avoid this in the future?”
Be grateful for the warning
Several of us, including me, suggest he should first of all be grateful that his client had given him a heads up in advance. It’s actually rare when writing clients let us know about company financial problems, at least this directly.
We lucky if we pick up even a hint that the company is experiencing financial difficulty. More often our contact just informs us they can no longer pay us. That can happen even when we have a contract.
The only way you have any chance of finding out what’s going on is to ask. If you’re talking to someone who has hinted or even said specifically that they company may be running out of money is simply ask, “What is that mean for me? Will I get paid?”
Just know that the person you’re talking with may not be at liberty to tell you much. It’s worth asking because sometimes you’ll actually get the whole truth. If not, you may be able to into it more by their response and the way it said.
What about your contract?
Assuming you have a contract or letter of agreement with the client you may wonder if that doesn’t require them to pay you no matter what. Yes it does, in theory. But that doesn’t say much about how likely you are to get paid if the organization is in financial trouble. If they are headed into bankruptcy, or shutting the firm down, the truth is there’s not much you can do. You can always try a suit in small claims court but this is expensive and time-consuming. If they don’t have money to pay you now, they are unlikely to have any when you go to court.
The reason I urge everyone to have an agreement with the client in writing is to help solidify the relationship and have something you can both get back to when you need to figure out what you originally were trying to do. If the company goes under the contract doesn’t guarantee you’ll get paid.
So, what should you do?
If you’ve been paid in advance, and it’s always a good idea to get at least some, if not all payment in advance, then you should certainly complete the writing you’ve been paid for.
If you haven’t been paid or haven’t been paid completely, stop writing and invoice the firm for what you have completed right away. It may help if you tell the person who hinted the company was in trouble that you’re going to submit a bill and that you’re not going to write anymore for them in till your paid completely. Make it clear that if they want additional writing for you they will have to pay in advance.
Taking this firm line may very well cost to this client even if it turns out they aren’t in financial trouble or they somehow managed to get out of financial trouble. It doesn’t matter. As is very small business person you need to protect yourself. You’re not responsible to help company get out of trouble in less you’re being paid very well to do that.
It’s not rude to send an invoice order asked me paid what’s owed you – it’s only good business!
Maybe I don’t need to say it but I’m going to anyway – this is a great example of why you should have more than one client. Businesses to go out of business and run into financial problems. If you’re working with a particular person at a company that person may get fired dropdead or move on. You have no way to control any of this. You can only take care of yourself by making sure you have got income coming from more than one source.
It really does make sense for you to spend some time thinking about what you’ll do if your major client somehow is unable to pay you. You’re the only one who can take the action to protect you against such an eventuality.
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