Getting paid promptly and reliably is one of the biggest challenges facing freelancers. When you don’t have the guarantee of a regular paycheck, ensuring that clients fulfill payment obligations can be stressful and time-consuming. Additionally, the independence that attracts many creatives to freelancing also means you lack the support systems to pursue non-payments.
However, there are steps freelancers can take to promote smooth payments and avoid falling victim to late or absent invoices. This ultimate guide covers proven methods for getting paid as a freelancer, from how to set clear expectations upfront, to resolving issues when clients don’t pay.
While occasional payment hiccups may be unavoidable, being proactive and assertive about your payment terms will ensure you receive fair compensation without too much wasted effort. Implementing appropriate financial procedures and controls also enhances your credibility as a professional business, commanding respect from clients.
By following this advice, you can focus on doing great work, not worrying about getting paid for that work. Freedom, flexibility and fulfillment define the freelance life when your payments flow reliably.
How To Ensure You Get Paid As A Freelancer
The best way to ensure timely payments as a freelancer is to set clear expectations with clients from the very start. When first discussing a project, be upfront about your rates, payment methods, and scheduling. Many payment issues arise from misaligned assumptions and lack of communication about financial matters.
Build payment protocols directly into your client onboarding process by:
Ask clients upfront about their payment terms and methods
During initial conversations with a potential new client, inquire about their standard payment procedures for contractors. Many companies have defined schedules for vendor payments, such as net 30, net 60, net 90 days. Some may have specific methods like ACH transfers or online portals.
By understanding their existing systems, you can assess whether they align reasonably well with what you expect and require. If their typical terms are longer than you can accommodate, negotiate alternative arrangements. Make sure to document the agreed-upon terms in your contract.
Asking these questions early allows you to avoid situations where 90 days passes after delivering work only to learn that’s their standard procedure. Clear communication ensures you maintain positive relationships with clients from the start.
Have a clear contract specifying payment schedule and terms
The contract you execute with a client before commencing work should clearly lay out timelines, deliverables, rates, and payment details. Specifically outline your payment schedule, such as 50% upfront and 50% upon completion, or milestone-based installments. Define what forms of payment you accept and timeline expectations – within 5 business days of each milestone or monthly upon receipt of invoices.
Also state what happens if they pay late. For example, you will charge late fees or stop work until they pay. Having consequences in writing makes them enforceable. Have the client sign so they agree to and understand the payment terms.
Putting the details in writing shows you take this seriously and prevents confusion later. Update terms as needed for large, complex, or long-term projects.
Find out more about creating strong freelance contracts here.
Require a deposit upfront, especially for new clients
For new clients, require a 30-50% upfront deposit before starting work. This shows they are serious about paying and protects you if they cancel mid-project. It also motivates them to stick to timelines and payments in the contract if they want an ongoing relationship. Making deposits standard sets clear expectations for all clients.
Use invoices and send payment reminders
Submit clear, detailed invoices to clients according to the payment schedules outlined in your contract. Itemize services performed, hours worked, expenses incurred, taxes, and total amounts due. Format invoices professionally with your branding, contact information, and payment details. Utilize accounting tools and software to store invoice records and simplify sending recurrences.
If payments become delayed or lapse beyond due dates, promptly send friendly reminders. Sometimes invoices get misplaced or overlooked, especially at large companies. Politely following up helps prevent non-payments resulting purely from miscommunications or process issues.
If the first reminders don’t work, send the invoices again saying payment is late. Warn you may charge late fees or stop work until paid. Just be sure fees match the contract.
Find out more about creating effective invoices here.
Build payment processing fees into your rates
Many popular online payment platforms like PayPal and Stripe charge transaction fees to freelancers. These fees can really add up over time, eating into your earnings. Rather than paying them directly out of your payments received, build a buffer for expected fees into the rates you charge clients.
When setting rates, check what you pay for payment services. Add 3-5% to cover their fees so clients pay your full rate.
As your business grows, recheck this extra amount covers your monthly fees. For big projects, add a line item for extra fees. Planning for fees means you get paid in full.
The Best Ways To Get Paid As A Freelancer
Beyond setting clear expectations for getting paid, leveraging the appropriate payment technologies and tools dramatically improves payment reliability and cash flow. Digital payments allow faster processing while accounting software helps organize financials and reminders.
Evaluate the following methods and systems to determine the right fit for your freelance business based on client type, project complexity, international considerations, and automation preferences:
Online payments
Online payment platforms like PayPal, Stripe, and Square allow freelancers to easily accept credit card payments and bank transfers without complex setups. They provide simple integrations for invoicing and collecting payments through websites, emails, or manually entering transaction details.
Services like PayPal also facilitate fast international payments critical for freelancers with overseas clients. However, they do charge processing fees, so the volume going through these systems impacts overall profitability.
If accepting online payments, research multiple processors for features and pricing to maximize affordability. Many freelancers offer clients choices by integrating two or more services into their payment system. Just ensure your accounting practices tally payments correctly across the platforms.
The convenience of online payments improves client fulfillment rates on invoices and provides quicker access to funds compared to traditional methods. Integrations with accounting systems further optimize tracking and financial management for solopreneurs.
Bank/ACH transfers
Bank transfers via ACH allow clients to directly deposit payments into your business checking or savings account. This approach avoids processing fees, allowing you to receive 100% of your invoiced payments.
However, bank transfers rely on clients initiating payments manually rather than through instant online payment links. Ensure you provide all necessary account details and paperwork if requesting clients to send bank transfers.
Bank transfers are best with reliable long-term clients. More coordination is needed compared to automatic online payments. With inconsistent clients, bank transfers can stall even though they avoid fees.
Accept credit cards
If providing a service rather than a discrete product, enabling clients to pay invoices with credit cards accommodates large sums not always accessible in cash. The universal acceptance of major cards like Visa and Mastercard also appeals to client convenience for an all-digital experience.
As outlined with online payment processors, passing credit card transactions does incur processing fees. These rates often fall between 2-4% of payments, a slight premium over bank transfers or check payments. Consider covering these expenses through your rate buffer as noted previously.
Accepting cards lets clients pay large invoices over time. But first discuss big charges and be aware of cash advances – they have different rules. Use Stripe or Square to safely and reliably accept cards.
Use accounting software to track payments
Investing in a quality accounting system tailored for freelancers and independent contractors saves administrative hassles for getting paid. Cloud-based solutions like QuickBooks Online or Wave seamless integrate with bank accounts to synchronize income and expenses.
Robust accounting software centralizes client records and financial histories in one dashboard for easy analysis and reporting. Built-in invoicing automatically tracks sent invoices and payments owed. Some systems facilitate automated reminders for outstanding invoices directly from the platform.
Also integrate payment processors with your accounting for complete financial data. Logging all client payments makes it easier to review projects for renewals or rate increases.
Freelancing allows flexible work, but financial tools boost profits through insights and efficiency.
Automate payment reminders
Chasing down late payments expends energy better directed toward revenue-generating tasks. Fortunately, accounting systems and invoicing software like FreshBooks, Zoho Invoice, and PayPal offer automation features for sending payment reminders.
Configure reminders to dispatch payment status emails as invoices become close to due and when they are past term. This prevents you closely monitoring due dates and manually sending messages hoping to receive owed amounts.
Automated reminders also maintain a documented timeline of notification attempts for reference if extreme situations require small claims court filings to retrieve very late or absent payments.
Set reminder cadence appropriately – not too frequent to frustrate clients but enough repetition to prompt them. Customize reminder language each cycle to vary tone from initial friendly nudges to firmer demands around 60 days lapsed.
Automating administrative tasks like payment reminders boosts productivity to grow your freelance practice.
Offer incentives for early payment
Besides setting payment expectations, offer incentives for early payment. Examples are small discounts or 1-2 hours of free work.
This rewards good clients you want to keep. It also gives leverage with late payers – make it a condition of working further.
State incentive terms clearly in contracts. The deal should benefit you through faster, more reliable cash flow.
Chasing payments hurts productivity. Early payment perks can dramatically improve cash flow.
What To Do If You Don’t Get Paid
Despite best efforts, some clients inevitably slip through the cracks or confront unforeseen circumstances impeding their ability to pay. Freelancers risk burning hard-won business growth reacting emotionally when invoices go unpaid.
Implement the following good faith efforts and disciplinary measures judiciously to secure what is owed you without rupturing client relationships prematurely:
Send polite payment reminders
First be helpful and collaborative. Say you may have miscommunicated and want to understand their process.
Gently note Invoice #XYZ is still unpaid. Ask what’s needed to pay within 5 days.
State you want to avoid hassling back and forth over due compensation. If there are hardships, discuss installments or postponing part of the amount.
Politely align with the client to fix this, rather than blaming. Offer a graceful way for them to pay.
Speak to accounts manager/decision maker
If reminders don’t work, contact accounts leadership about late payments. Explain how this impacts your business operations.
Sometimes cash flow issues or forgetting freelancer realities cause payment delays. Discuss with finance heads to reprioritize.
Avoid accusations that could lose future work. Just outline that late payments hurt your ability to deliver services expected. Involving higher ups often gives results.
Educate clients on freelancer dependence on payments versus large firms with financial buffers.
Charge late fees if specified in contract
If initial contacts fail and your contract defines late fees, charge them. Typically 2-4% daily interest on unpaid amounts.
Many avoid fees to not permanently damage relations. First give written warning that fees will be imposed unless paid by [date].
If imposing fees, apply rules consistently across clients. Only charge enough to prompt payment without losing the client long-term.
Halt work until payment received
Before cutting ties over unpaid invoices, pause active projects first. Tactfully cite administrative duties keep you from taking on new work with invoices outstanding despite reminders.
Stopping work shows the seriousness without accusations. It also limits growing unpaid balances. State you welcome resuming work once payments reconcile, like through a payment plan.
For long-term clients, briefly halting new work minimizes resentment versus terminating outright. It verifies their eagerness to pay.
Weigh impacts before this drastic step – consider the client’s profitability and strategic value. Frame this as trusting positive intentions on both sides, not punishment.
Send formal demand letter
If attempts to collaboratively secure late payments fail, send a firmly worded demand letter. Concisely summarize the original agreement, work delivered, invoices sent, and amount still unpaid despite multiple efforts on your behalf.
State that while you prefer a friendly resolution, ongoing nonpayment means turning this over to collections or a litigation lawyer by [date] without funds transfer or alternate plan initiated. Signaling escalation often demonstrates the seriousness and your unwillingness to accept a permanent standstill.
Aim to present a reasonable timeline for formal actions without emotions, while conveying you still seek to avoid irreparable damage through receiving the overdue sums. Outline you have exhausted ways of directly resolving this, now requiring indirect means of securing contractually owed payments.
Use debt collection/legal services as last resort
If both collaborative and aggressive attempts at recovering unpaid invoices fail after sustained efforts directly engaging clients, enlist professional support reclaiming justified freelance earnings contractually bound. Debt collection services and attorneys specializing in payment disputes represent intermediaries that amplify pressure securing rightful compensation.
Research thoroughly reputable partners with experience managing freelancer payment collections and reasonable terms, as their fees impact recovered disbursements. Demand letters from legal representatives or interactions from collectors often demonstrate required seriousness eliciting resolution where aggrieved freelancers directly were ignored.
While adding costs you shouldn’t bear, think strategically whether writing off substantialinvoice sums or pursuing every avenue recouping rightfully owed income best serves your freelance business’ interests. Especially with large balances or systematic nonpayment issues spreading across multiple projects, third party engagement signals unwillingness tolerating the status quo.
Dump non-paying clients
If sustained attempts to directly get unpaid invoices fail, enlist debt collectors or lawyers to apply pressure securing rightful freelance earnings. Their demand letters and interactions often demonstrate seriousness ignored from freelancers directly.
Thoroughly research partners with freelance collections experience and reasonable fees, as their charges lessen recovered amounts.
While adding unwanted costs, strategically assess writing off substantial invoice sums versus exhausting recouping rightfully owed income per your business interests. With large balances or nonpayment spreading across projects, using third parties shows you won’t accept the situation as is.
In Summary:
Getting paid smoothly as a freelancer reduces top stressors and distractions. Being proactive about payment expectations, carefully using tracking and reminder tools, and firmly enforcing reasonable policies put you in control financially.
Though requiring effort, freelancers prioritizing payment processes succeed more separating client needs from their own. Savvy freelancers know that just as clients have organizational interests, freelancing needs determined yet professional self-advocacy to realize your independent business vision.
Remember that:
- Getting paid smoothly takes some work upfront
- Prevent issues by having clear contracts and terms
- Most payment problems can be resolved through communication
- Don’t tolerate chronic non-payment; fire those clients
Good luck.