Late payment fees don’t mean much when the client you’re chasing has ghosted you 75% of the way through the project…
But this does →
The problem:
Chasing payments sucks and establishes a contentious (or at the very least awkward) relationship with the client.
The benefit of solving it:
You get paid on-time, in full, AND you maintain a great relationship with the client, so they’re much more likely to want to work with you again.
Why what you’ve tried has failed:
Penalties for late payments or holding onto the final deliverable may seem like a good plan, but it only matters if the client is still around and actually cares enough to pay you.
Here’s how to solve it:
This process is all about getting a disbursement BEFORE each stage of work is done, so that you’re never doing anything you haven’t ALREADY been paid for.
That might sound complicated, but it’s really not →
Collect 50% up front to cover the thinking work, the discovery process, and any other “pre-production.”
Collect 25% once everything’s been approved and you’re ready to start production (this will look different from freelancer to freelancer depending on your service).
And that leaves just the final 25% to worry about at the end of the project, where some first time clients have a tendency to disappear for weeks at a time.
Of course, you hold on to the deliverable until that final payment is issued, but even if they disappear on you, you’re only out 25%.
A lot of freelancers think having a late penalty written into their contract will cover them, but that method is pretty ineffective because if a client has ghosted you at the finish line, it doesn’t matter how big the late fee gets, you ain’t ever gonna see it in your account.
And if you haven’t collected ANY payments, you’re out the ENTIRE project fee.
So protect your freelancing ass and put this process into practice with new clients ASAP.
Best,
Jamie
P.S. Once you’ve developed a relationship with a client and feel you can trust them, this process doesn’t have to be as strict. Or, it could be…
We still do this in our agency with many long term clients just to keep everything official.
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