Clients Who Don't Pay
Qualifiers: they pay (1) nothing, (2) too little, (3) something "when they feel generous".
If they did this with their Internet service fees or in a store, they’d be called thieves. These are not clients who’ve truly fallen on hard times, but generally pay. This is an attitude.
Why they get away with it:
- No contract: the client hasn't signed yet, we haven't created one or the existing contract has expired.
- No retainer: the client doesn't want to pay upfront, we feel badly about being paid upfront.
- Allow excuses such as they "can't pay now" or they're "not getting the service (they) expected".
- Continue to work regardless of outstanding or unpaid invoices.
Stop enabling bad behaviour; if their values, budgets or policies differ, walk away. There’s no relationship to preserve; they didn't consider relationship when they chose not to pay.
What Now? They Won't Pay
- Don't deliver anything more until you get paid ALL outstanding sums.
- Cut your losses and walk away: your time is better spent on paid projects.
- Go to court: if your outstanding balance is huge and you have the time and resources.
Get Paying Clients
Quite simply - get paying clients. This is not simple; hence the millions of articles on lead generation. Still, nothing worth anything was ever easy. Start (today) as you mean to go on.
(A) No signed contract no service – no friends in business
What happens without a contract?
- Ever-changing scope of agreement - subtle scope creep or constant large changes.
- Redefining "billable/non-billable" hours: e.g. 'meetings' are no longer billable.
- Schedule delays: "'X' charges hourly, finish that first; we'll come back to…” you.
- No obligation to pay: real or imagined.
Create a 3-6 month contract (or use a free online template); include a retainer fee. 3-6 months is long enough to establish compatibility, but short enough to ensure complacency doesn’t set in. To ensure contract clarity:
- Get a second opinion.
- Review with the client to clarify – not change – the contract.
- Ensure relevant parties sign and date the contract.
- Don't start work until the client signs and dates the contract.
No exceptions. Walk away from anyone hesitant.
(B) No retainer or no client
- 50% retainer on ALL small projects (as defined by your organization).
- 20%-50% retainer on ALL larger projects.
Professional clients know this is the price of doing business. If they can’t afford it or ‘want to see your work first’, walk away.
Know Your Worth
"Sometimes walking away has nothing to do with weakness, and everything to do with strength. We walk away not because we want others to realize our worth and value, but because we finally realize our own."
-- Robert Tew