Even if you signed a contract, completed a project successfully, and sent over an invoice, there is a chance a client won’t pay you. Is this legal? Not at all. But it can happen and taking the legal steps to pursue payment aren’t always worth the time, money, or effort. You’ll have to decide what lengths you want to take to pursue payment. To what to do when a client won’t pay you, here are some steps you can take in order of how you will likely want to proceed as the situation escalates. Hopefully you’ll never get to the last step!
If an invoice is a little bit late, start by following up via email. Oftentimes this is just oversight on the project manager’s end or a mix up with their accounting department. This isn’t fair, but it’s also not necessarily an act of ill will.
If they don’t respond to your follow up email and payment continues to not arrive, it’s time to alert them you will be pausing all work with them until payment is received.
If your main point of contact isn’t being responsive, you can reach out to other key players at the company. During this process you can follow up via phone and email with your contact at the company or their accounting department as much as you feel comfortable with. Take note here of how much time you’re spending on this process, because it may be enough to make you reconsider the value in working with them. Oversights happen and can be forgiven, but only to an extent.
If no progress is being made, follow up via email and attach your original contract and invoice again. You may want to loop in the accounting or HR department here if you have contacts in those departments. If you don’t have a formal contract in place, you can forward the company the original email they sent you with project details such as price and deadline. While a contract is better, in many cases emails can be used to show a “deal” was made.
Step 5. Take legal action and file complaints
If an invoice is drastically overdue, you may want to threaten to involve your lawyer (yes, even if you don’t have one) or file a complaint with the Better Business Bureau. If the client is based in New York, you can remind them of the Freelance Isn’t Free Act which provides many protections for freelancers to ensure they get paid for their work.
If after months of effort on your end, payment still hasn’t come through (and you don’t want to hire a lawyer), it may be more worthwhile to cut your losses. Is this fair? Absolutely not. But your time is valuable and it’s understandable if it makes more financial sense to move on and focus on your other work. Try to reflect on any learning lessons from the experience so you can better protect yourself in the future.
In general, one way to give yourself some extra financial protection in case a client won’t pay, is to only start a project for a new client (or even existing ones) if you’ve received a 50% deposit. Then you’ll invoice for the remaining amount due once you complete the project. Even if they do cause payment problems, at least you have a solid portion of what is owed to you and have money coming in to sustain you during the project.
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