Here's Exactly What To Say to a Client Who Is Late With a Payment (or Two)
There are lots of things that may keep you up at night as a self-employed person—and late payments from clients is one of them. An estimated 29 percent of freelance invoices are paid late, according to new reports. As such, chances are good that, if you work for yourself, learning how to handle late payments from clients is a skill worth acquiring.
It may feel awkward to do so, but discussing late payments with clients is necessary for the security of your business because late payments disrupt cash flow needed to cover business expenses and personal needs. Their financial strain can also impact your ability to meet financial obligations, invest in your business, and maintain work-life balance, as well as strain relationships with clients and affect credit ratings, leading to reduced operational flexibility and increased stress.
In my experience, people are typically afraid to approach a client about late payments because they’re afraid of annoying or upsetting the client. But here's the thing:
Your clients do not hold all of the power.
They should be just as concerned with annoying or upsetting you by being late with their payments. And more likely than not, these situations can be easily solved with some good ole fashioned communication. So let’s break down how to approach and communicate with your clients about a late payment. Because you need to get paid.
Scenario No. 1
You’ve been working with a new client and after the first month of service, you've submitted your invoice. Another month of work has gone by and you’re about to submit your second invoice but haven’t been paid for the first invoice you submitted. You originally agreed to payment schedule terms with your client at the start of your working relationship and put a “net 30” payment deadline in your scope of work and invoice.
If the terms have been agreed upon and this is the first time you and your client are working together, it may take time to get the first payment process into rotation with human resources (HR) and accounts payable (AP).
While this isn’t ideal for any situation, it’s one of the many hurdles of freelance life, and it’s better to prepare for it than not; but that doesn’t mean you shouldn’t say anything when a payment is late either.
Say this:
“I’m getting ready to submit my second invoice and wanted to let you know I still haven’t received payment for last month’s services. Do you have everything you need from me to get this processed? If so, can you please let me know when payment is expected to come through?”
Don’t say
“….” (Silence is not an option here.)
The breakdown
When it comes to talking to your client about getting paid, more people opt for saying nothing over something. It’s imperative you keep an open dialogue about payment processing so you can better manage your personal finances.
Freelancers don’t have the luxury of bi-monthly paychecks, and your clients will understand this. Remember, your services are an investment, and they should respect your time and business by actively communicating when payment may be late.
If you approach your client about a late payment and they’re able to share why it’s running late and when it will be processed, that’s a great first step. Take note and document it in a follow-up email with the information that was shared if the conversation is held in person or over the phone.
From there, hold your clients accountable. If the date comes that they said you’d receive payment and it doesn’t process, follow up with another email. Chances are, there’s another department that handles payments and your client will do their due diligence to make sure you get paid.
Scenario No. 2
You’ve submitted not one, but two invoices that have not been processed. You’ve approached your client about the first late payment and they gave you a timeline for when it would be processed. Now you have two late invoices and it’s time to submit invoice number three.
Say this:
“I’m getting ready to submit my third invoice and have still yet to receive payment for my first or second invoices. The terms we agreed upon have not been met and I’ve followed up several times to try and resolve this matter together. With respect, I will have to cease my services if these late invoices aren’t processed by one week from today. I hope you can understand the difficult circumstance this puts me in and that we can work together to reach a solution.”
I have a feeling this is going to cause some mouths to drop.
What? Cease services?
YES. You need to get paid!
Freelancers, hear me! This is business 101.
Clients and freelancers create a circle. You should be getting just as much value from the relationship as your client is getting from you. This isn’t just measured in dollars. This is measured in reliability and respect. If you have continually met your deliverables and communicated your expectations for payments and they’re not being met, then it’s time to take a stand.
It will be difficult, but it is necessary. And it will light the fire under your client’s butt because if you’re doing your job right, having you around makes their work-life easier, and they should want to keep you happy and, ultimately, paid.
This article was written by Audrey Adair-Keene and has been updated.
How to Professionally “Break Up” With a Client
Cutting ties is tough, but worth it.
Photo: ColorJoy Stock
As a business owner, your natural inclination may be to please clients, and it can be tempting to fall into the trap of taking any client that wants to work with you. The hustle is addictive. And the thought of saying “no” is scary, especially when faced with the uncertainty of when your next client will be locked down. But while cultivating and growing your clientele, your list of frustrations might follow suit.
PSA: There will likely come a time when you’ll want to cut ties with some clients. It might be something you’ve been considering for a while now as a result of clients behaving badly (hello, unpaid invoices), or maybe you’ve simply become too busy and need to edit your client base (high five, boss). Whatever the reason, it’s uncomfortable AF. And considering your reputation is on the line, you’ll need to finesse this difficult convo.
So to help you manage your business relationships and determine which clients are giving you good vibes and which ones deserve “goodbyes,” we spoke with Andrea Crisp, a life coach, host of "The Couragecast," and author of “Designed With Purpose.”
Is it time to break up with a client?
According to Crisp, here are six signs you are subconsciously done with a client:
1. You feel completely drained after having a conversation with them because you rehash the same thing over and over.
2. You work overtime trying to please them when it becomes apparent no one can satisfy them.
3. You find yourself watching the clock every time you have a meeting with them.
4. You believe there is no amount of money in the world that makes working with them worthwhile.
5. You contemplate going back to your 9-to-5, just to escape this client’s requests.
6. You stop billing them in the hopes that they don’t contact you again.
And here are six signs that a client is giving you life:
1. You are willing to put aside time to work on a project; in fact, you look forward to it, even on weekends or at 3 a.m.
2. You feel compelled by the cause and are passionate about the impact it is making.
3. You are fueled by every conversation. Every time you speak with the client you are motivated and energized and feel even more creative.
4. You think of ways to help them, even during your “me” time.
5. You are on the same wavelength and kinda want to be their BFF.
6. You are willing to go the extra mile for them, even though it’s not part of your mandate.
How do you break up with a client (and prevent it from happening in the first place)?
If you’re starting to feel the “cons” outweighing the “pros,” it’s time to release these clients—and release yourself in the process.
Here are some ways to do so:
Set boundaries right from the start
This not only helps you as an entrepreneur, but also gives clear guidelines to your clients as to when they can expect work to be done, and when they can expect you to respond to their emails, texts, and calls. So you avoid receiving emails on weekends (if that’s not part of your mandate) and avoid anxiety-inducing emails with subject lines that read: “Urgent: need this ASAP.”
“At the beginning of every client relationship, I outline a clear coaching expectation so that my clients are aware of how this relationship will work,” explains Crisp. “It has served me in so many ways. And, I have to constantly remind myself that even if I don’t think a client needs to hear my expectations, I need to say them. It keeps me in check and accountable to my clients, and allows them the freedom to ask the right questions.”
Know your niche
Your dream clients are ideal because you’re passionate about helping them, and your expertise matches their needs and vision. As soon as you take on clients outside of your niche, you have to work harder than ever to figure out what they may need. This becomes super frustrating, as there starts to be a disconnect between your “dream clients” and your “dreaded clients.”
Release yourself from the pressure
Crisp puts it clearly: “Release yourself from the pressure that you need to be everything to everyone. As entrepreneurs, we may want to have all the answers, have the biggest client roster, and have a strong social media following, but in the end, that does not produce results and only pushes us closer to burnout and fatigue. The biggest obstacle that stands in our way of making an impact as female entrepreneurs is ourselves.” Boom.
Give yourself a break, allow yourself to have a day off, turn off your phone. The world will not end. Trust.
Look at your numbers
If you know you simply can’t even with this client anymore, look at your upcoming projects and revenue. Can you afford to let this client go? If this customer is draining you of all your energy and not allowing you to perform at your best, then it sounds like letting them go will help open the window for other awesome clients. And, after all, good clients lead to other good clients. If the client is mistreating you, then you’re better off without them.
Have the difficult conversation
Don’t procrastinate; the longer you put off the inevitable, the harder it will become to have “the talk.” After all, there are times in every relationship, like with your squad, team, or clients that you have to tell the hard truth. This may involve being honest and vulnerable, which can be very difficult.
Face it head-on, take a deep breath and stand tall—you’ve got this.
Don’t look back
Once you make your decision and fire your client, don’t look back. See the situation as a key learning for the future. Upwards and onwards. Trust the process.
When is enough, enough?
The moment you start to believe that you need to fill your calendar with clients out of your niche is the moment you have to work double-time to accommodate their needs.
Don’t go there.
When trying to determine “the last straw,” you have already passed the point of no return. This may sound counterintuitive, but the real question you need to be asking is: “Do you have the confidence and assurance you need to only take clients you want?’
TBH, it really is more about you than them. Ask yourself these tough questions and don’t become addicted to the hustle by taking clients that drain your energy and creative flow.
Another key point is that as you grow, your focus might narrow, which can lead to some clients no longer matching your brand. Recognize when this happens, too, no matter how lovely the client might be.
Remember, a client-supplier relationship is a partnership. And if you’re no longer satisfied with your end of the deal, it might be time to say, “K, bye.”
About the author: Karin Eldor is a coffee-addicted copywriter with a long-time love for all things pop culture, fashion, and tech. Ever since she got her first issues of “YM” (remember that one?) and “Seventeen” in the mail, she was hooked on the world of editorial content. She's a contributor to Forbes, Coveteur, MyDomaine, and more.
This story was originally published on November 28, 2016, and has since been updated.
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Pro Tip: How to Approach a Client About a Late Payment
If you‘ve continually met your deliverables, then it’s time to take a stand.
Photo: ColorJoy Stock by Christina Jones Photography
We’ve all more than likely been through this particular situation but I’m curious: how many of you reading this are happy with the way it was handled? In my experience, people are typically afraid to approach a client about late payments because they’re afraid of annoying or upsetting the client.
Your clients do not hold all of the power.
They should be just as concerned with annoying or upsetting you by being late with their payments. And more likely than not, these situations can be easily solved with some good ole fashioned communication. So let’s break down how to approach and communicate with your clients about a late payment.
Why it’s important
You need to get paid, that’s why.
Scenario #1
You’ve been working with a new client and after the first month of service, submitted your invoice. Another month of work has gone by and you’re about to submit your second invoice but haven’t been paid for the first invoice you submitted. You originally agreed to payment schedule terms with your client at the start of your working relationship and put a “net 30” payment deadline in your scope of work and invoice.
If the terms have been agreed upon and this is the first time you and your client are working together, it may take time to get the first payment process into rotation with Human Resources (HR) and Accounts Payable (AP).
While this isn’t ideal for any situation, it’s one of the many hurdles of freelance life and it’s better to prepare for it than not; but that doesn’t mean you shouldn’t say anything when a payment is late either.
Say this
“I’m getting ready to submit my second invoice and wanted to let you know I still haven’t received payment for last month’s services. Do you have everything you need from me to get this processed? If so, can you please let me know when payment is expected to come through?”
Don’t say
“….”
The breakdown
When it comes to talking to your client about getting paid, more people opt for saying nothing over something. It’s imperative you keep an open dialogue about payment processing so you can better manage your personal finances.
Freelancers don’t have the luxury of bi-monthly paychecks and your clients will understand this. Remember, your services are an investment and they should respect your time and business by actively communicating when payment may be late.
If you approach your client about a late payment and they’re able to share why it’s running late and when it will be processed, that’s a great first step. Take note and document it in a follow-up email with the information that was shared if the conversation is held in person or over the phone.
From there, hold your clients accountable. If the date comes that they said you’d receive payment and it doesn’t process, follow up with another email. Chances are, there’s another department that handles payments and your client will do their due diligence to make sure you get paid.
Scenario #2
You’ve submitted not one, but two invoices that have not been processed. You’ve approached your client about the first late payment and they gave you a timeline for when it would be processed. Now you have two late invoices and it’s time to submit invoice number three.
Say this
“I’m getting ready to submit my third invoice and have still yet to receive payment for my first or second invoices. The terms we agreed upon have not been met and I’ve followed up several times to try and resolve this matter together. With respect, I will have to cease my services if these late invoices aren’t processed by one week from today. I hope you can understand the difficult circumstance this puts me in and that we can work together to reach a solution.”
I have a feeling this is going to cause some mouths to drop.
What? Cease services?
YES. You need to get paid!
Freelancers, hear me! This is business 101.
Clients and freelancers create a circle. You should be getting just as much value from the relationship as your client is getting from you. This isn’t just measured in dollars. This is measured in reliability and respect. If you have continually met your deliverables and communicated your expectations for payments and they’re not being met, then it’s time to take a stand.
It will be difficult but it is necessary. And it will light the fire under your client’s butt because if you’re doing your job right, having you around makes their work-life easier and they should want to keep you happy and ultimately, paid.
What financial situations have you found yourself in that you wish you had communicated better? Share them in the comments or send me an email at hello@thescopeblog.com.
“Clients and freelancers create a circle. You should be getting just as much value from the relationship as your client is getting from you.”
—Audrey Adair, Founder of The Scope
About the author: Audrey Adair is a seasoned freelance communications professional and founder of The Scope, a platform providing resources and community to freelancers and the self-employed. Connect with The Scope on Instagram and join their email list to receive your free resource, The Freelancer Starter Kit.
This post was originally published on April 30, 2019, and has since been updated.
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