What to do if a client fails to pay, in 8 steps

There is no worse pain to us, designers, than making sure our clients are not only paying what it is fair to us, but to also make them pay it promptly and on time. In design work, as in any other creative work, corrections seem to drag projects forever. After any project is ‘finished’, we often find ourselves emailing back and forth with our clients in order to meet what we think is best for them (with the information – or lack thereof – that we are given) and their expectations. It is even worse when the work done does not meet their expectations at all and they refuse to pay or when they give us excuses for why they can not pay at the moment.

Here, prevention is the best measure. You should never work for:

• Someone who looks shady or who you do not trust
• Someone who is not clear on what she expects
• Someone who refuses to sign a contract
• Someone who refuses to comply to what you expect from a client
• Someone who drains you for very little reward

I know that saying ‘no’ can be hard, especially for someone who is just starting in the freelancing world and wants to make a name for himself or needs the money to pay the bills. However you need to understand that saying ‘no’ has many advantages to it:

• It is good for your health: it really is, so save yourself the headaches
• It is good for your money: although this can be counterintuitive because you are saying ‘no’ to money upfront, it will be good in the long run since you will have more time to focus on what really matters: the clients that are making you earn money
• It feels good: companies often fail to understand that talent does not ‘need’ to work for them, they can go work for someone else who actually appreciates their work (and who is open to pay whatever is necessary for quality work)

So remember to have your safety net ready whenever necessary, even if you think you do not need it, chances are that, at some point, you will.

A safety net can come in many forms. First of all, for new clients, a contract should be a staple. Make your client sign a contrat in which you clearly define your agreement, the delivery calendar, the payment method and whatnot. This will help you in court if (God forbid) you have to take legal action to get paid. In the contract you should also state your overtime fees, to prevent your client from dragging the project out  with an endless loop of tweaks and corrections.

However, if you believe that the work to do is not worth putting together a contract, you could ask your clients to pay 50% (or whatever other amount you feel necessary) upfront. This way, you guarantee you client will be rightfully engaged in the project and you will have some money to support yourself with.

What to do if everything goes wrong

The job is done. You did your best preventing this from happening but your client keeps dragging out and refuses to pay. What should you do?

1. Bill correctly, and in time

Make sure you did not make any mistakes on your end of the agreement. What distances top freelancers from the average guy is their ability to deliver in a timely manner according to plan. They also bill like clockwork, so if you are not familiar with the billing proccess, get yourself a virtual assistant (you can outsource them for cheap) or even a billing software to help you out.

2. Contact them directly, and be nice

Pretty straight forward. Reach out to them and explain how the project is done according to the plan you both put together. Explain how you are open to make any tweaks necessary (being paid overtime) AFTER they pay the set amount to agreed on for the delivery of the finished project. Never, never, ever argue, try to be understand their position and make them reason – do NOT let yourself go in the heat of the moment.

Here your main weapons are ‘feel’ and ‘fair’. Unless the client is an outright scammer, he has the intention to pay you all you deserve, but he believes that the job is not finished, at least not to his standards. Repeat after me: ‘Sir, I believe the work is completed according to what we agreed on in the initial briefing and I feel it is only fair that I should get paid for my work up until now’.

If you are nice and polite enough, he will feel guilty about not having paid earlier.

3. Don’t email

It is much harder to say ‘I won’t pay’ to your face or on the phone that it is to do it on email, so whenever possible, try to reach out directly to your client. Again, be polite, you do not want to start a war.

4. Understand their position

It is very different to have a client who is going through financial problems and cannot pay at the moment, but that has good faith, a client who feels that the work is not done and a client who is a scammer and will not pay. Make sure you understand why they do not want to pay and tailor your strategy to their thinking.

If a client cannot pay at the moment, chances are he will be able to pay in the future. Understand this has nothing to do with your product and work and kill them with niceness. Tell them you can put the project on hold or work on a new payment plan (small monthly instalments, for example). Better late than ever, plus, they will appreciate your kindness and work hard to make sure they can pay you.

If the client is not happy with the service, make sure to understand what they want to change. If a small fix can make them happy, do it. If that does not work, explain that the conditions of the work were clear when you agreed on them.

If the client is in defensive mode and just refuses to pay, you may have no other option than to take action.

5. Be active

Follow up every day and make sure to do it in multiple ways. Phone, show up to their offices if that’s a possibility. Make sure you are friendly, but firm. Once again, remember to keep your feelings out of the conversation and keep the tone professional.

6. Stop work immediately

If your client fails to pay in time, you should not deliver in time. Freeze all project you have assigned to their account and politely let them know. You should have protected your work, with watermarks, for instance, if you are a graphic designer, so if the client fails to pay, you will not send them the actual files. For web designers, for example, you should host the website on your own servers, so if the client fails to pay you can shut it down or even charge an extra fee for hosting.

7. Get help from the outside

The situation is explosive, and you reaching out to your client is not making it any better. You have offered them options but they refuse to respond or accept them. Then it is time to take action and get help.

Some inquiries can be solved by a polite letter from your lawyer. Nobody likes going to court.

Depending on where you live, some litigations can go through small court, and you do not need a lawyer for that. A judge will schedule an appointment with you and your client and set a deadline for them to pay you.

You could also hire a bill collector, who may take as much as 50% of the eventual payment. There are also some cheaper services online. Up to you.

Hopefully, you will not have to take your litigation to court. If you do, make sure you lawyer up and have every document that can prove useful (especially contracts and conversations) in reach.

8. Whatever you do, keep your cool

Clients who fail to pay can affect not only your financial wellbeing, but also your mood. Most of the time, when a client will not pay, it has nothing to do with your work, so don’t let that affect your ego. Keep doing your best work for the clients that DO pay and keep your cool when talking to the problematic clients. There is always hope.

How did you deal with clients that refused to pay in the past? What did you do? Who did you reach out? Let us know in the comments below, make sure you follow us in Facebook and Twitter and visit Freepik.com for the best graphic content out there!