What to Do When Your Client Doesn’t Pay
In the 10 years I have been a freelance producer I have never been stiffed by a client. Sure, late payments are no fun, but I have always gotten paid! Recently the prospect of losing $7000 to a deadbeat client became real and I discovered the problem is real for lots of creatives — just look at The World’s Longest Invoice.
After a month of being left in the dark and a threat of non-payment — I just got paid. My problem is solved, but the larger issue of clients thinking they can get away with not paying creative freelancers is still a huge issue.
Getting paid for your work is your responsibility and it starts long before you send the final invoice. For someone who doesn’t have a huge legal budget I have found Rachel Rodger’s CreativeLive course incredibly useful. Full transparency – I produced it.
Here are top six tips that’ll help you avoid getting stiffed by your client:
1) Research your client. Make sure that the company you may do work for is financially solvent and legit. Check out social media, customer reviews, ask questions and most importantly follow your gut. If something feels sketchy, move on.
2) Have a contract in place. You should NEVER start work without a signed contract and make sure your contract works for YOU. The best thing to do is hire a lawyer to help you create a client service agreement that is specific to you and the sort of work you are doing. Cutting and pasting from the web is not the best idea but if hiring a lawyer is out of your budget, It is important that you include these things:
– Define a Point person – Make sure you get a primary point of contact in writing. Who is responsible for decisions? Who will answer questions and resolve issues?
– No Guarantee Clause — While we work hard as creatives, we can’t guarantee that clients will like our work because taste is subjective, but we should still be paid for the work we do.
– Intellectual Property Rights — Be clear about who will own the copyright of you work. Are you reserving it or are you transferring it to the client? Watch Rachel Rodgers CreativeLive course to understand the difference.
– Timelines, client expectations and kill fees. Include timelines in your contract about your deliverables, client expectations and due dates. Include a kill fee clause in case the client cancels or doesn’t follow through on their responsibility. Depending on a project’s budget, I usually include a $5,000 kill fee.
– Mediation. Include a mediation and arbitration clause in contract as a first step to solving issues that arrive. Rachel Rodgers says it’s important to indicate which mediation and arbitration organization you will use in the contract as each one has different rules. I use California Lawyers for the Arts.
3) Define payment terms up front. There are lots of options for payment. I have done 50% upfront and 50% upon delivery, many people do 33 % upfront, 33% mid project and 33% upon delivery. More and more people are charging 100% up front. However you choose to break up payments, Rachel Rodgers encourages people to get a credit card number and authorization to process each of the payments agreed to under the contract. Use Square and make sure to include processing fees in the budget. Not all clients will go for this but try — it is the swiftest way to get paid on your timeline.
4) Clearly lay out the structure and timeline of a project. Often times we are working with people who have no idea what the creative process looks like. Share what you know and make sure they understand what they are in for. Make sure you verbalize important specifics in the contract. I specifically discuss the No Guarantees Clause.
5) Watch for red flags. Even after a contract is signed, it is important to watch of red flags.
Watch out for clients who try to negotiate the terms of a contract after it is signed. It’s just not professional and the could be a sign of problems to come. Also beware for clients who start trying to do your job. Be confident and have clear boundaries.
6) Change orders. Has the scope of the project changed? Get any changes in writing and add an addendum to the original contract. While I am producing on location, I have a change order document on standby in case there are any last minute shifts in expectations.
So your client still refuses to pay? Next week I’ll share my strategies for getting paid.
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