Struggling to get paid for a freelance project?
The life a freelance worker has plenty of great benefits, like choosing your own work hours and having the freedom to move around the globe, setting up your location-independent office in beach bars and chic rooftop cafés.
However, one of the biggest frustrations of this lifestyle is the constant battle to get paid on time for freelance projects.
Does it really have to be so hard? The simple answer is no.
Some figures suggests that over 4 million Australians have joined the remote work revolution, with another 746,000 working as freelancers on the side.
Despite concerns, the movement is set to continue. However, before many people take the leap into full-time freelancing, they want to know they have the security that a steady job offers, which brings us to the question:
How can you avoid late freelance payments?
Let’s find out.
5 ways freelancers can avoid late payments:
Getting paid late is more common than many people realize. As many as 58% of freelancers are getting paid late by clients, or in some cases, not at all.
Here are some measures you can take to make sure it doesn’t happen to you.
1. Set a clear credit limit from the outset
Sometimes clients are busy. Sometimes they simply forget to pay their invoices. We get it, it happens. But sometimes clients don’t pay because they don’t care. Whatever the case may be, don’t be taken advantage of.
By establishing a clear credit limit before you commence the first project with a new client, you effectively create boundaries that will protect you from being ripped off down the line.
Something along the lines of, “The credit limit is capped at $200 for all clients, with zero exemptions. Until outstanding invoices are paid, I’m unable to continue working.”
2. Send invoices like a professional
Here’s something many new freelancers don’t understand: It’s perfectly fine to bill your clients up front.
In fact, it’s fair dinkum, and no, it’s not at all rude! It can be tough to make ends meet freelancing, so by asking for at least 50% upfront, you maintain a steady cash flow.
You should strive to present yourself as a professional, and you can do this in the way you handle your invoicing. It may differ on a case-by-case basis, but it’s a smart move to set up a reminder to send out your freelance invoices with a predictable pattern – either weekly or monthly.
Sending your invoices out on a Monday allows payroll teams the entire week to process it, whereas requests for payment sent later in the week may get lost in the scramble for the weekend.
3. Create crystal-clear invoices
Just as your timing must be on-point, the invoices themselves should look the part. Taking the time to create professional invoices that are clear and concise will save you headaches.
Payroll departments can get pretty hectic, and an overworked clerk may have little time to decipher a confusing invoice – it is much easier for them to put it in the “later” pile.
Before sending your invoice, cover the following bases:
- Make everything easy to read.
- Make sure it is aligned with any contract or agreement you have with the client so nobody spits the dummy.
- Clearly define the amounts and currencies so there are no misunderstandings.
- Include your contact details in case the client has any questions for you.
This may take a little more effort, but by getting better at your freelance invoicing, you can reduce the chances of late payments.
4. Streamline the payment process
If you haven’t quite caught up with the digital age, you may still only be accepting payment by cheque. Let me tell you that this is a surefire way to keep you stressing about cash as a freelancer.
It’s bad enough if you’re getting paid late, so don’t exacerbate the problem by restricting the ways that clients can pay you.
Get proactive to make it easy for your clients by providing them with multiple, fast ways to pay you.Check out Xero, Rounded, MYOB, Wave or QuickBooks.
5. Be flexible with your rates
There are plenty of clients out there who just want the world but aren’t prepared to pay for it. While you should always endeavor to get paid your worth, it can benefit you to be a little bit flexible with your freelance rates in the beginning.
Whether you want to get paid hourly, by the project, or on retainer, you can curry favor with new clients by offering discounts on larger projects.
Negotiating as a freelancer comes with a learning curve, but with some flexibility in the early days, you can win more clients, and may even get some referrals that help take your freelance business to the next level.
Staying proactive and professional makes the cash flow
The life of a freelancer is supposed to be about freedom. You don’t want to spend too much time worrying about a late freelance payment.
It’s always wise to research prospective new clients before diving in, but whether they have a good reputation or not, you should always be prepared to make payments simple.
By creating clear invoices with multiple ways to pay, and delivering them promptly each week, you can establish a professional system that earns the respect you deserve. Soon enough, clients will see as the professional freelancer you are, and you’ll have fewer worries about your next meal ticket.