In recent years, the trend toward remote work has been gaining traction thanks to advances in technology. Not surprisingly, this has also been accompanied by a similar rise in freelance work. More people can enter flexible working arrangements; this opens up opportunities to run a lucrative side hustle, or eventually turn that gig into a full-time job.
Freelancing is excellent in terms of lifestyle and balance, but it can be especially hard at the outset. You’re mostly running your own business. There isn’t an HR team to give you legal advice, or a payroll officer to ensure that you have steady cash flow.
A lot of freelancers accept the fact that mistakes will happen. Learning from experience is part of the job. But one particularly painful lesson is that some clients might shirk payment. What can you do in that situation?
The all-important contract
One significant problem freelancers run into in this situation is the lack of a detailed contract (or any contract, for that matter). Businesses don’t leave this stuff to chance. They live and die on deliverables and deadlines; they hire lawyers who specialize in business litigation to ensure that contractors live up to what they promised in the fine print.
Sometimes, you feel like skipping the legal language and documentation when you take on a project. After all, informality can speed up the flow of work. It’s nice to operate based on trust, but when all’s said and done, the contract is there to back up the invoice.
What does your contract state when it comes to the terms of payment and the scope of your work? If you don’t have a lot of previous freelance experience, you might have copied-and-pasted from a previous contract or downloaded a free template online.
Without customizing them to suit your needs, these terms could be a significant factor resulting in your exposure to non-payment for your work. Every client and every project needs to be treated as a unique arrangement. You’ll have to continually review and update the wording of your contract.
A proper contract still doesn’t always guarantee a client will pay you. So if you had an agreement, whether contractual or informal, and you deliver your end of the bargain but the client does not, what should you do?
First, bear in mind that honest mistakes can happen. You’d appreciate it if a client is considerate when you fudge up something, so give them the benefit of the doubt. There might be an accounting error or other oversight on their end. Send them a gentle reminder through your standard communication channel. This is usually email, but if you’ve been comfortable sending them a direct message through text or chat, go ahead.
What if you’re still ignored after that? When you call customer service and aren’t satisfied with the resolution, you ask for a supervisor, right? So it’s time to escalate the issue. Go up one level, and try to talk to the person who’s really in charge. If the client is an individual, look into their professional network to find someone who can help hold them accountable.
If the matter still isn’t settled, you can escalate things from another angle. You can send them a letter threatening legal action, or a new invoice for overdue payment. And you can hire an attorney or collections agency to take things further.
Prevention over cure
You can threaten legal action because a contract is legally binding. But in the freelance industry, it can be challenging to sue a client to get the payment you’re due.
The same factors that allow more people to take on freelance jobs easily are working against you here. Online platforms can make it harder to verify and track down clients. The global reach of the Internet means you could easily be working with someone based in another state or country.
Legal action can be impractical unless you’re chasing compensation worth thousands of dollars. The best thing you can do is to avoid getting burned. And that means making an effort to iron out your contract. Word it properly to protect yourself. Work out the manner of payment to be as precisely detailed as possible; require half up front, and specify any charges for cancellation or overdue invoices.
Finally, as your freelance work begins to gain traction and increasingly becomes a reliable source of income, raise your standards when it comes to your clientele. Research so that you can filter them by reputation and avoid taking on big jobs for unproven or potentially risky clients. Go for quality clients, and hopefully, the first time you don’t get paid for your work will be the last.