In this instalment of Essential Lessons for New Freelancers I’ll be looking at an awkward situation that every freelancer will face at some point: chasing unpaid invoices. It’s hard to know how best to handle unpaid invoices when you’re new to freelancing, so here’s the way I’ve found works best for my business.
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Firstly, try not to be embarrassed about reminding clients that they owe you money. You did the work, now you need to be paid. It’s easier said than done, but with practice you won’t feel bad about asking for the money you’ve earned.
And be polite but firm. Hopefully you got your client to agree to your terms upfront, including a payment schedule, so assuming you’ve abided by the terms, they should too. If they try to quibble over your payment terms politely remind them of the terms they agreed to.
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How I chase unpaid invoices
My payment terms are 15 days as I’ve found this works best for my business’ cashflow. On the 15th day I send a simple reminder email. It’s a friendly message so worded as a gentle nudge and most of the time the payment arrives a couple of hours to a couple of days later.
Here’s an example:
This is a quick reminder that my invoice, #27, is now due; I’d really appreciate it if you could arrange the payment.
If the payment still hasn’t arrived a few days later and I haven’t had a response, I’ll send another slightly firmer email:
I just wanted to remind you that my invoice, #27, is now overdue. Can you let me know when to expect payment?
If in another few days and there’s no payment or response, call to remind them and ask when to expect the payment. Keep calling at regular intervals – your persistence should work by either not letting them forget about the invoice, or they’ll pay just to stop you calling! I haven’t actually had to use this tactic yet, but I know people who do use it for very late paying clients.
I use FreeAgent* for my accounts and they have a handy feature to automatically send out reminder emails as soon as the payment is overdue and at regular intervals after that. Once I mark the invoice as paid, the reminders stop.
This can be a great time-saver, but I don’t use it with every client; it depends on the relationship I have with the client whether I use automation or send the reminders manually.
One last tip
Make sure that you’re sending invoices and reminders to the right person. If like me, you deal with a lot of small businesses and sole traders, it’s likely that your contact for the project is also the person who will deal with invoices. But if it’s not them, you don’t want to be calling them regularly to chase up payment. You want to speak directly to whoever will be arranging the payment.
Chasing unpaid invoices can suck. It’s definitely one of the less fun parts of being a freelancer, but it’s essential that you learn to handle it. Make sure to get your hard-earned money!
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