Freelancers: how do you make sure that you get paid on time?
I have done some work for another web designer in my area, who was hired by a company to do their website. They designed the website, but needed someone to do some backend work.
Well, I completed the work and sent the web design company an invoice, who, in turn, sent the company that hired them an invoice. It has now been 70 days, and I haven’t received payment for the work. He keeps saying that the client has been slow paying him, but should that matter? If he hired me to do work that he couldn’t do, then isn’t he now MY client, and shouldn’t he find a way to pay me on time? Or am I being crazy?
How do I avoid this happening again? Any advice would be much appreciated!
generally you can’t make sure that this never happens to you, bu the following things help.
get contract and 30-50% deposit at all times.
check the credit worthyness, association with bad people or references for every client
have shorter payment terms and enforce them
do not extend credit when other payments are overdue and/or do not start new projects before old ones have been paid - alternatively have a credit limit for every customer and reasons to raise/ decrease it.
have formal project acceptance documentation, so it cannot be used as an excuse for late/not payment
It is common that payment cannot be made if the client down the chain has not paid, however the ultimate responsibility lies with your contracting partner. To ensure this is honoured you have to enforce it at times with debt collection, lawyers letter, small claims etc. Word will get around that you mean business.
Definitely get a deposit up front. I don’t work in these types of situations without one. You don’t have contact with the client, so you’re reliant on the person who hired you to go after them for the payments. If you have a deposit from the beginning, at least you’re reducing the amount of risk you take in these scenarios.
Ultimately it’s not your problem that the client hasn’t paid yet. The guy that hired you is still responsible for taking care of your invoices in a timely manner, regardless of whether or not he gets paid at all. Of course that’s how things are supposed to go. In reality, far too many people think they can hold off on paying their contracted workers until the client pays them.
I agree, the fact that the client isn’t paying him is beside the point. Your agreement is with him alone, unless you signed something to the contrary. His cash flow problems should not be yours.
I assume you have no contract (as you didnt mention it), so pull up all your email communication and double check what you agreed to with regard to payment. Keep pushing for payment, put it all in writing via registered delivery, and take it from there. It really depends on the amount owed - if it’s not much you could just chalk it off to a lesson learnt.
In the future, I suggest you clarify the exact terms of the agreement in writing. It doesn’t necessarily need to be a formal contract, but at the very least, email them your queries and make sure you receive a direct answer to all of them, in writing (email). For example:
I require a xx% non-refundable deposit upfront
balancing payment is due upon completion of agreed work, irrespective of whether the client has paid you (or bill them monthly)
additional work is billed at $xx per hour
Basically when working with a new client, I’d always ask for a deposit and expect a written agreement. Once you have developed a relationship, you can dispense with the deposit and just bill them.
Yes, it is a huge mistake that I didn’t make a contract with him. I have done projects with him before, and he has always been good at paying me on time. But I guess everyone can fall behind at any time and come into cash flow problems.
The down payment is a great idea, and is what I do with all of my direct clients, and has always worked well for me. I guess the same is true with working for other web companies as well.
Can this be as simple as a one-page document, or should I send them my standard contract that I use for everyone else?
"Yes, it is a huge mistake that I didn’t make a contract with him. I have done projects with him before, and he has always been good at paying me on time. "
Most of the people that I have worked with in this fashion have always been in the same boat as me, and so I have never felt too bad about either waiting to pay until I get paid, or waiting until they can pay me… that is just how it is among friends. This is for folks that I don’t need a contract to deal with, because I know them.
I wouldn’t feel the same if it weren’t something that was reciprocal or had to do with my overall relationship with the person. If they are not my buddy, they are a client just like anyone else, and even if they are subcontracting me they need to follow my normal practices just like any other client.
As far as getting paid faster, offering “discount” for prompt/early payment and then adding on the late fees as part of the bid has been working well for my partner and myself.
It is the subcontractors job to pay you for your work whether or not his/her client paid them. Otherwise he/she shouldn’t be outsourcing someone until they have the means to pay. They are right about a deposit too, you should always get one. If someone won’t deposit any money, I wouldn’t do any work for them. 70 Days it too long.