Ah payday – the one day of the month that everyone looks forward to! But when you’re freelancing, your income isn’t always certain. You could have more than one pay day in the month, or worryingly, no pay day at all.

Sometimes you’re swamped with work and your clients are brilliant, paying you exactly when you want them to. But other times work dries up and for whatever reason, the clients you do have just aren’t paying their invoices quickly enough.

Yes, you might be lucky and have regular clients each week or month, but often things will be a little more ad hoc. Here we look at how freelancers get paid as well as questions you need to ask yourself each time a new client comes on board.


What type of contract will you offer?

Firstly, you need to clearly lay out your terms and conditions – preferably as a contract – before you start working. Each project and client will have a slightly different type of agreement.

Sometimes you’ll bill a client monthly for a set amount of work, or perhaps weekly. But for others it will happen as you complete each project or piece of work, which can make predicting cash flow tricky. It’s why it’s so important that everything is crystal clear from the outset.


Working on retainer

Another option you might want to consider is working on a retainer basis for certain clients. This means you’re guaranteed a set amount every month from that client, as long as you complete the agreed amount of work.

For many freelancers it’s a great way of working with a more predictable income, but for others it doesn’t quite work in practice. This could be because you haven’t worked with a client before so would prefer to start off more ad hoc, or because your workload is unpredictable.

Just make sure your retainer is watertight and you know exactly how many hours you’ll be doing and what work is expected in that time. Be clear about your cancellation notice too.


How much will you charge clients as a deposit?

If a project is going to be very large, it’s worth asking for a deposit up front. How much this is depends on the type of work you’re providing, and the industry. Many freelancers will ask for a 30-50% down-payment before work starts.

This not only gives you peace of mind that you won’t end up totally out of pocket should things go pear shaped, but also helps you better forecast your cash flow.


What are the payment options?

There are all sorts of different payment options you can offer your clients nowadays, including bank transfers, PayPal, or even card payments. Some freelancers even accept cryptocurrency although this of course comes with its own risks, so you need to know what you’re doing.


What does your invoice include?

Invoices are essential to let the client know what they owe and when it’s time to pay – even if you’ve already agreed everything.

An invoice should clearly show:

  • An invoice number
  • The amount due
  • Your details, and your clients’ details
  • A description of work carried out
  • The date
  • How you want to be paid. If this is by bank transfer, make sure you include your bank details too.


What if payments are overdue?

Sadly, this is something just about all freelancers will experience at some point or another. If your client has a payment deadline approaching, it’s a good idea to send them a gentle reminder.

But if the deadline does pass and they still haven’t paid, you’re well within your rights to charge late fees. These fees can include additional costs to reflect the time you spend chasing.


Payment reminders and dealing with late payments: Our tips

Be assertive (and yes you might need a thick skin). For most of us, talking about money is pretty taboo and awkward. It’s easy to avoid the issue, but that’s a fast-track way to short-changing yourself. Because here’s the thing: it’s YOUR money.

Maybe you’re scared of appearing desperate, or you’re worried about annoying them, so they don’t use your services again. But we bet your client would soon be on your back if you were running late with their work – so why wouldn’t you chase for a late payment?

There’s no need to be rude or aggressive (in fact you definitely shouldn’t be). Usually, a quick reminder or two by email will do the trick. Because let’s face it, your client is probably busy and has just forgotten.

And what if they still won’t pay? Well, even after repeated nudging there will be times when extracting payment is still like getting blood out of a stone. But don’t be put off! There are still plenty of things you can try without going into full on dispute mode. Be clear, and act quickly.

  • Call them on the phone (this is much more personal and harder to delete than an email!)
  • See if you can resolve the problem amicably by arranging for mediation
  • Issue a Letter Before Action (LBA)
  • If you’re still working for them, stop and instruct a collection agency
  • Consider (as a bit of a last resort) taking the client to a small claims court.

Remember though, that taking any kind of legal action is likely to be expensive, so it really is a road you’ll only want to take in extreme circumstances. The debt will also need to be fairly large to justify this course of action.

Whatever happens, stay calm and consider your next steps rationally.


Find more freelancer support and guidance, or get a quote online for accountancy services.


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