As a freelancer, once in a while you get a client who is just mean and stingy. You signed the contract, followed the instructions, delivered work on time, and when the job is done, your client disappears.
Welcome to the world of business where it isn’t uncommon to be stiffed.
It’s frustrating enough to deal with cheating clients who don’t pay you or pay you too late. Saying mean things to them or use of force would only exacerbate the dilemma and result in a worse fate: no payment plus negative testimonials. So, what is it you can do about this?
The best you can do is to avoid this situation from occurring in the first place. Here’s how you can deal with these clients should they ever cross your path.
Always Do Background Checks
To prevent this from happening in the first place, it’s best to do a bit of research on your client to know who you are dealing with. Most stingy and unpleasant clients don’t have a good past record with other freelancers either. Find and read any reviews, testimonials, or comments on your potential client. You can even Google the company or find reviews on websites such as Glassdoor, Vault, or Yelp.
Make Sure You Have a Solid Contract
Contract is very important when you have made deal with your client as it is a legal proof that you and your client have mutually agreed upon certain terms and conditions. So, make sure your contract is very detailed and specific, especially regarding the payments relative to the amount of work you give. Also include clauses about late fees and legal fees.
Collecting money upfront, like a down payment by client, is a best practice to ensure you aren’t completely cheated off. As a benchmark, try to collect at least 50% of the total payment. After a set amount of hours, the upfront payment should be non-refundable. Make sure you put EVERYTHING in writing.
Offer a Discount
If it’s a fault of your own, you should try to satisfy your upset client by offering a discount on the total payment. If the client complains about the service you offered and confesses to have expected a bit better, then you can “sweeten the deal” by cutting down the bill by 10% or 20%. This is a great way to make the client feel he is actually valuable to you.
Consistently Remind Them
Don’t give up on the client just yet. Be persistent in requesting for you overdue payment. Send email, call them, or conduct a face-to-face meeting (if possible) to demand your payment. In case your client is away or has simply “forgotten” it’s best to be polite and wait patiently. Investigate their problem before you take any action.
Send a Serious Note
If the client still refuses to pay, it is obvious that you need to try a little harder. You can write a formal letter that outlines the dates at which late fees will be charged. List down all the deadlines and start adding up the late fees charges. Later on, keep sending the client updated invoices that include the late fees charges.
Pursue Legal Action
Let’s hope it doesn’t go that far, but in some cases where the price paid it quite hefty, it is utterly necessary.
Hire a lawyer and discuss your issue related to “breach of contract”. Note that the cost of the lawyer should be less than what you expect to receive should you win the case. Again, you need to send a format letter at this point stating that you will pursue the case with legal action. Make sure your client receives this information directly – or through the most direct and immediate contact- and as soon as possible. This will most certainly get your client’s attention, and hopefully will get him to pay you before you decide to play the hardball.
Take the Matter to Court
We’ll admit, it’s easier said than done. If you dues lie in the $2,000 – $8000 range, your case will be best suited to a Small Claims Court. The fees for these courts are generally lower than most others. However, check the limitations and requirement of your local small claims court to be sure.
For claims that are much larger, you can opt for Civil Court, Mediation, or Arbitration. However, most of these methods and courts will require you to hire a lawyer and the fee amounts are higher than those of small claims courts. If you are not willing to spend the great amount of time and money it takes, you’re better off trying simpler techniques listed above.