Late payments are one of the biggest headaches for freelancers. Chances are you collect payments from multiple clients at different times, so things can get messy when even one of them is late.
Luckily, you have several ways of dealing with clients who take payment windows as suggestions. Personally, I prefer to lay the groundwork from the moment you sign a contract with a new client, to avoid problems down the line.
In this article, we’re going to talk about three ways you can ensure your freelance payments arrive faster. That way, you won’t have to worry about how to make ends meet from one payment to the next. Let’s talk money!
1. Provide More Than One Payment Method
Most of the clients you’ll run into as a freelancer will want to stick to one of their preferred payment methods. Some deal only with PayPal, while others will want to do wire transfers, and a few dinosaurs might prefer to pay with a check. If you force clients to use payment methods they’re not used to, it will probably take longer for the money to get to you.
In some cases, clients might get fed up and take their assignments elsewhere, which is something none of us want. Ideally, you want to provide more than one payment method for your clients. Here are your top options:
- PayPal: It’s the most common method of payment for freelancers, so get an account set up if you haven’t yet.
- TransferWise: This platform enables you to send and receive wire transfers without losing as much in commissions.
- Credit card payments: Some platforms enable your clients to pay you via credit card without signing up for an account and then they transfer the money to you.
- Wire transfers: They may be slow and expensive, but bank wires are reliable and a good option for large payments.
Your best bet, in most cases, is to offer PayPal and an alternative payment method of your choosing. The former will cover you in most situations, and you have a backup for clients that don’t like to use the platform. Just keep in mind, you’ll cover payment fees in most cases, so your per word rates need to reflect that.
In the past, I also suggested using Bitcoin to process freelance payments. However, clients that know how to use Bitcoin and are willing to pay with it are few and far between. You can mention it as an option, but if you try to force customers to pay with crypto, you’ll probably lose out on a lot of work.
I know it can be a hassle to set up multiple payment processors. However, the easier you make it for clients to pay you, the more likely it is that you won’t have to wait overly long for your money, which makes up for the inconvenience.
2. Adding Late Fees to Your Contract
As a freelancer, it can be tempting to circumvent protocol and work with clients using simple verbal agreements. However, once you start contacting and pitching clients directly, you’ll want to make sure you have a standard freelance contract ready to go.
The word ‘contract’ sounds intimidating. However, they protect you as a freelancer and tell clients you’re a professional, instead of someone who works odd jobs from home. You don’t even need a lawyer to help you draft a freelance contract (although it doesn’t hurt). You can find a lot of great contract templates online, which you can adjust depending on each job.
I’ve written about what clauses your freelance contracts should include in the past. However, for now, let’s focus on clauses that deal with late fees. Ideally, your contract should stipulate a due date for delivering your work and window of time for your client to pay. If they go beyond that window, your late fee clause kicks in. Here’s what that might look like on a simple contract:
Any invoice not paid within five (5) working days of billing is subject to a 5% weekly interest charge. The freelancer reserves the right to use any and all means of collection available under applicable law to collect any amount past due.
A payment window of five working days is plenty for most clients. I’m also partial to not adding exorbitant late fees since the goal is to use them as incentives rather than to intimidate clients. In any case, I’ve been pretty lucky when it comes to freelance work, so I haven’t had to resort to collecting late payment fees in years.
Remember – both you and your clients should sign copies of your freelance contract before you start work. Since a lot of people tend to skim such documents, it’s also an excellent idea to re-iterate your payment methods and window via email before you get to work.
3. Ask for a Deposit When You Take On New Jobs
If there’s one thing that separates serious clients from those you want to run away from, it’s the fact the former are often willing to put down deposits. For example, if you’re a freelance writer contracted to do a lengthy white paper, it makes sense to ask for partial payment up front.
Asking for a deposit benefits you in several ways. It gives you flexibility since you have money on hand from the get-go and it helps you weed out clients that aren’t willing to part with payments. If someone flat out refuses to pay a deposit for lengthy contracts, you spider senses should should start to tingle.
Now, when it comes to freelance writing, you’ll often sign up clients that require multiple articles over more extended periods of time. In those situations, asking for a deposit might not make as much sense since you’re working on several pieces at once. What works for me then is to ask for immediate payment once you submit your first article. Then, you can move on to scheduled payments, as outlined in your contract.
This approach helps build trust between you and new clients, but your mileage may vary. If you’re finding that too many clients balk at the possibility of a deposit, it might be your portfolio doesn’t inspire much confidence. On the other hand, you might just be looking for good clients in the wrong places, so you may want to check out the Paid to Blog Jobs listings instead.
Conclusion
If you’re juggling a lot of clients, it can be hard to keep up with who is paying when. It can make sense to schedule all your payments for the start of the month, for example, and incentivize clients to pay then. However, other clients will want to pay upon completion only, so you need to budget accordingly to avoid running into money problems.
In my experience, there are three ways you can ensure your freelance payments arrive faster, and they are:
- Providing more than one payment method for your clients.
- Adding late fees to your contract.
- Asking for a deposit when you take on new jobs.
Do you have any questions about how to collect freelance payments more effectively? Let’s talk about them in the comments section below!