Freelancers getting stiffed by clients is not exactly a rare phenomenon. It happens far too frequently. And after almost every instance, freelancers are left wondering “should I have seen this coming? What are the warning signs a client may not pay?”
Not long ago, I was working on a blog post for recent freelance statistics. And while I was reading the different reports I pulled the statistics from, I came across one statistic in particular that made my jaw drop: 44% of all freelancer report that they have been stiffed on an invoice.
Now, that's a pretty bad statistic, but what I think is worse is that these freelancers are often left with no way of recovering the funds. And even worse than that many freelancers blame themselves if they get stiffed.
Can you imagine? A bad client makes a bad deal and skips out on his or her legal agreement, and the freelancers blame themselves for it! That's like a restaurant blaming itself because someone ditched out without paying for their meal.
It is not the freelancer's fault
I guess that needs to be said first: it is never the freelancer's fault when a client skips out on his or her invoice.
However, as a freelancer, you can look for warning signs a client may not pay his or her invoice.
You cannot always know when a client is going to stiff you. Sometimes they just surprise you. But here are a few indicators to help you avoid getting skunked:
- Almost bully-like negotiating during estimates and proposals. When I first started freelancing, I dreaded the question “how much do you charge?” Part of this dread came from imposter syndrome, but part of it also came from experiences of clients coming back with a counter-offer. I'll be honest, I don't like counter-offers. I'm not trying to negotiate my value or the value of my work, I am trying to tell you how much I charge for my services. But that is for another blog post. All in all, most clients will come back with a counter-offer or negotiation of some sort. And most of the time it's because they want to get the best deal they can, or because they are worried over their budgets. The ones who seem extraordinarily tough or almost bully-like about it? Red flags.
- Unwilling to pay a reasonable downpayment before work commences. “Reasonable” will depend on the type of work they're hiring you to do — I've seen downpayments of anything from 10% to 50% or more. But requiring a downpayment is not unheard of. In fact, most freelancers are going to require a downpayment (especially those with a lot of experience). And while I understand when clients feel hesitant about paying before they've seen any work being done, it's pretty standard across the industry. Those who are blatantly against any sort of downpayment sent red flags.
- Trying to tell you how much you should charge or how much time the project should take. This is a big one for me. Granted, the majority of my clients are authors, and therefore have at least some understanding of how writing and editing works. But anyone who tries to dictate to me what my rates should be or how much time something should take sends up an immediate red flag.
- They demand that you provide a test for free. No. Just. No. It's one thing if you want to offer up a free sample or some sort of free offering. It's a completely different story when a potential client makes a demand of it. This is right up there with dictating your rates back to you or bully-negotiating over your fees. It's a major red flag.
- They start scrutinizing every word of your contract. It's no secret that when someone wants out of a contract, the first thing they'll check is the contract itself. They want to see if they can find a loophole or something that they can call a break to either invalidate the contract, absolve them of it, or to be able to place the blame for breaking up the relationship on you. When your client starts questioning the terms of a signed contract, that's a major red flag.
- Trying to change the terms of the contract. Whether they try to renegotiate a lower rate or try to add more work into the working deal, trying to change the terms of that contract is a big red flag.
- Unfounded and harsh complaints about your work. We all make mistakes, so of course clients will want those mistakes to be fixed. And as freelancers who want our clients to be happy, we are usually more than willing to fix our mistakes. But when a client's complaints are unfounded or unreasonable, it's a pretty big red flag.
And then, of course, there is the ultimate sign that a client may not be paying his or her invoice: they stop responding to all messages and emails.
Now, I don't want you to take this information and start cancelling contracts every time a client does one of the things on this list. These are warning signs, not indicators.
Even the client who stopped responding to their emails could have a valid reason for missing those emails.
How to Handle a Client You Think Might be Skipping out on Payment
If you see any of the warning signs a client may not pay his or her invoice, there's still plenty of time to turn it around and collect your payment.
First, don't assume the worst. Like I said, these are merely warning signs, not necessarily indicators. The last thing you want to do is throw an attitude at your client and risk hurting your relationship with them because you think they may be trying to skip out on your bill.
Second, make it easy to pay you. I mean, ridiculously easy. Research shows that clients pay up to 11 days faster when they can pay by a credit card. Include your PayPal link on your invoice and to encourage fast, easy payment.
Third, speaking of invoices, make sure you send them when you say you will. Send them early, and clients tend to forget about them. Send them late, and you'll show your clients that you don't care about the payment process. If you want your clients to respect your timelines, then you have to lead by example.
Fourth, you can offer incentives to quick payers. As a rule, I stay away from discounts and specials — except when it comes to rewarding my clients for paying me. For example, you might offer a small discount (3%-5%) if the invoice is paid in full within three days.
By offering a reward like this, it incentivizes and rewards clients for doing what you want them to do — which is pay their invoice on time — without attracting the ones who are just out for a discount. I don't even advertise the discount at all, just to help make sure that I don't start drawing the clients who are only out for a discount.
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