What To Do When Your Writing Client Can’t Pay You

While economic cutbacks may have benefited many freelancers there is one consequence that is not so welcome — when your client has a cash flow crunch and can’t pay you. What do you do in a case like this? Here are some ways to work out your next course of action.

Are you sure the client can’t pay?

Make sure that it really is a case of inability to pay. Some clients are just forgetful and your invoice may be languishing in an inbox or in-tray somewhere. A friendly e-mail reminder ought to do the trick if your invoice has slipped off the radar, and it’s the first option to try before moving to tougher measures.

Is the client new?

If a new client fails to pay up, then you can cut your losses without too many regrets. Freelancers should always take a deposit from new clients. This is part of establishing a relationship of trust and will make sure that your client won’t disappear and leave you out of pocket.

How much are you owed?

If the amount is a small one, you might be able to let it ride for a while. If there’s no chance of you ever receiving payment, then perhaps it’s best to write it off and move on. This is not an option that I like as my view is that if I work for the money I should get paid. However, sometimes the amount you are chasing is less than the amount you would make if you took on a new client instead. Do a cost-benefit analysis and work out whether chasing payment is worth your while.

Is the client established?

If you have had a relationship with a client for a while, then that’s where it gets tough. One option is to continue to work while hoping that things will improve. The downside of this option is that within a short time you could be out by thousands of dollars and the prospect of getting paid may be no nearer.

Another option is to explain to the client that you can’t continue to work until at least some of the balance owed is paid. If your client is holding out on you, this might work, but if the client really has no money, then this option won’t help you get paid. In fact, depending on the business your client is in, your failure to deliver content could kill any chance the client has of making money and being able to pay you.

Set up a payment plan

Perhaps your client will be open to staging payments so that you get some of what you are owed. An initial payment as a show of good faith might help you feel better about continuing to work. This is a good option when you want to retain the client relationship and the client has always paid up on time in the past.

Legal options

If you are completely ready to write off the client relationship then you can consider suing the client for the amount owed. This means burning your bridges, as there won’t be any trust after taking this step. You may not even get paid, though you might get a legal judgment that says the client has to pay you once money comes in. And don’t forget that a protracted legal battle may cost more than you are owed. As a first step, consider naming and shaming in a bid to get the money owed to you.

What I’ve tried

In the past my solution has been to stop work on the client’s project until I receive payment. That worked well when I had a lot of clients paying small amounts. However, now that I have fewer clients who pay larger amounts, that’s not such a great option. In some cases, it might be better to take a long view and keep the client relationship going. The only trouble with that is that if you have more than one client like that, your own financial stability is seriously threatened.

Another option I’ve tried has been to reduce the work I take from any one client, so that my client portfolio is better balanced. Unless I have very bad luck, I should get paid on time most of the time.

Which option is right?

To be honest, no option is exactly right. The choice you make will depend on the client’s history with you (if the client has always paid on time but is having a temporary difficulty then you can afford to be understanding provided there is an end date), and how much money is owed.

How have you handled this situation in the past?

(Photo: shaghaghi)