10 Tips for Freelancers to Avoid Unpaid Invoices and Delayed Payments

Missed or delayed payments are one of the most demotivating things that can happen to a freelancer. Sadly, some freelancers experience working hours on a project and not receiving compensation afterwards.

This experience gets even more frustrating when freelancing is your only source of income. Applying the tips in this guide will help you minimize the risk of delayed payments or unpaid invoices.

1. Regularly Check In With Clients

no attribution required: Unsplash

Effective communication is key to building strong client relationships, which helps you in getting paid. As they say, “out of sight, out of mind.” Since some clients may be unorganized or too busy, it’s your job to set up a system and be more intentional with your communications. Here are some tips to regularly keep your client up to date:

  • Set regular meetings and send meeting reminders through an appointment automation platform such as Calendly.
  • Use your client’s preferred instant messaging platform to send follow-ups.
  • Give more than you take. You can send free resources or gifts on special occasions to build trust with your clients.
  • Organize client files in one of the most secure cloud storage services, so your clients can easily access them if they have questions about your performance.
  • Keep them on track of your progress by using a project management board like Trello.

2. Create a Contract

Photo of Employment Contract

A job contract helps your clients take your role as a professional seriously. An agreement sets expectations on both ends and emphasizes that your relationship is professional. It also serves as a form of protection for you and your client, so you can agree on fair terms in case your client fails to pay on time.

Review your agreement before sending it over. Some things you can add to your document:

  • Specific deliverables or milestones.
  • When will you get paid, and what is the exact cost?
  • Payment options.
  • Additional fees for late payments.

If you don’t know how to create a client contract, you can search for a template on a platform like LegalTemplates. The site lets you customize and download an “Independent Contractor Agreement” in Word or PDF format.

3. Send a Complete Invoice

Bookipi Invoice screenshot

You can choose from the best free invoice apps for freelancers and small business owners. For instance, a free invoice app like Bookipi helps you send and track invoices. The app lets you itemize your charges and add payment terms, aside from other helpful features.

You can also preview your invoice before sending it over through email or sharing it via a link. The app also sends reminders if your client forgets to pay you after a prescribed period. Whenever you send an invoice, include all the necessary details to help you get paid on time:

  • A breakdown of the charges
  • Payment terms
  • Payment options
  • Payment deadline

4. Offer Upfront Payment Incentives

Hand showing a sale tag

Incentives can include discounts, gift certificates, exclusive sales, free upgrades, or any reward for clients who pay in advance. Choose an incentive that will motivate them to send their payments earlier. For example, you may offer a 20 percent discount if they set up automatic credit card payments or pay upfront for the whole year.

5. Impose a Penalty

hand holding stopwatch with credit card and money at the background

Some clients might take advantage of you when you’re too lenient with late payments or unpaid invoices. Because they think you’re okay with the delay, they might prioritize spending on “more important” expenses first. To avoid this, you can also give penalties for late payments. For example, a half-month delay may incur a two percent fee.

If you’re going to impose a late fee, ensure that your client knows this beforehand by including this condition in your contract. As a reminder, also include late payments in your invoice. If your client paid you on time, you could just put zero on the charge for late fees.

While giving a penalty might motivate clients to pay on time, be sensitive enough when the times call for some empathy. For example, their business might be affected by the recession, or they might have a personal emergency. In these cases, you may waive the fee. Your client will be grateful for your consideration, and you’ll have acquired a loyal customer.

6. Make It Easy for Clients to Pay

Person holding a phone with a payments app open.

Are there any reasons that make it difficult for clients to pay, leading to delayed payments? There’s no excuse for not having multiple payment options when you have digital options available. You can opt to get paid by debit card, credit card, or apps like PayPal and Payoneer.

Go through this freelancer’s guide to alternative payment methods, and choose the most applicable for you and your clients. If you can’t decide, you can also ask your clients what payment channels they prefer.

7. Protect Your Output

Macbook pro on desk with blank white screen

There’s nothing more frustrating than seeing your unpaid work on someone else’s site. To avoid this, protect your output and don’t release it until you’re paid. For instance, you can ask for a 50% down payment before you get to work.

If you’re a graphic artist, use watermarks and don’t release a high-resolution version of your project unless you can be sure of payment. You can also upload the project on your site, use it as one of your work samples, or modify and sell it to another client. This way, your hard work doesn’t completely go to waste.

8. Choose Platforms With Payment Protection

upwork site screenshot

Freelancing sites such as Upwork have disadvantages, but one benefit is that they give you payment protection. If you meet Upwork’s criteria for hourly payment protection, you’ll get paid for the hours you log on to the Upwork Desktop App. Clients must deposit funds in escrow if you’re being paid a fixed price. These are then released to you once your work is approved.

Registering on credible freelancing sites may save you time and stress in case of conflicts. They may have provisions for you to file a dispute in case of non-payment. If you and your client reach a stalemate, the site acts as a third party or mediator to decide the outcome of your dispute.

9. Avoid Job Scams

Laptop with scam alert written on it

If you’re a new freelancer, get familiar with the most common job scams, such as money laundering, too-good-to-be-true promises, and pyramid schemes. Sadly, even freelancing sites that offer payment protection can be a hotbed for scams.

Also, be wary of jobs posted on Craigslist, Facebook, and other online platforms. Do a background check, protect your documents, and learn how to identify scammers on freelancing sites and social media.

Bonsai Dashboard screenshot

Business management tools help you organize the most common freelancing tasks from one platform. For instance, Bonsai lets you send invoices, track your hours, use document templates, and track your expenses from their dashboard. If you feel overwhelmed by multiple apps, use a one-stop solution such as this to help you get paid faster.

If you’re comfortable having your hours tracked and as a freelancer paid by the hour, consider using one of the free, quick, and amazing time-tracking tools to record your daily activity.

Is It Time to End Your Contract?

How long has it been since you’ve been paid? If your client has made it a habit not to pay, move on and end your contract. If they experience a downturn in their business, wish them the best and end positively. Think of it this way—you’re opening the doors to better freelancing opportunities once you let go.

A missed payment for a job you worked hard for is never your fault. But the reality is that both new and experienced freelancers are susceptible to this problem. By following these tips, you can avoid legal disputes and minimize the risk of delayed and unpaid payments.

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