Watch out for these red flags that your new client may try to skip out on payment, costing you valuable time and threatening your cash flow.
By JT Ripton
Most freelancers and small business owners will come face to face with this lamentable reality at least once: Clients sometimes skirt invoice fulfillment and renege on payment.
Keep a sharp lookout from the outset of your relationship with a client in order to protect yourself and your payments. Learn from the experience of the experts that have come before you by looking out for these seven warning signs.
1. Refusal to Sign a Contract
A legally binding contract lays out the terms of your engagement with the client from the outset. This gives you an opportunity to set your rates and expectations in terms of payment deadlines, etc. It is your best friend when it comes to invoice fulfillment, and there are platforms such as Invoice Ninja that offer free proposal templates that can be transformed easily into invoices once approved by the client.
A contract is an extremely valuable resource that creates clarity in your relationship with the client and, if it comes down to it, can be used to take legal action. Since having clarity on an agreement is beneficial to both parties, refusal to sign a contract is grounds for suspicion when it comes to dealing with your clients. Think twice about spending your time completing a project for someone who is unwilling to sign a simple agreement.
2. Haggling Over Rates
Similarly, make sure you settle on an hourly or project rate before investing your own time and energy into a project. Some clients may simply be unfamiliar with freelance rates and express initial hesitation, so be prepared to explain the market value of your work. Clients who understand the value of your entrepreneurial expertise should be willing to pay a fair price for it.
While some negotiation over pricing is a normal part of business, watch out for clients who are overly aggressive about rate haggling. That could be a sign of problems to come.
3. Using Dismissive Language
Be wary of clients who subtly undervalue your work by asking you to put together a “quick” proposal, misrepresent your role, or use careless language to devalue your input.
Sometimes carelessness can be the result of lack of knowledge. That’s why they hire you, the specialist, after all. But there is a difference between naivete and willful ignorance. Don’t let clients underestimate your value.
4. Inability to be Responsive
If clients are slow to respond to emails (or don’t respond at all), miss project deadlines or fail to return feedback in a timely manner, there’s a great chance they will give your invoice a similar tardy treatment.
Communication is a basic skill, and it is necessary to the success in any relationship. Your client relationships are no exception. If clients are slow to respond from the outset, issue a kind but firm warning. Since you’ve both signed a contract (you did sign a contract, right?), feel free to issue reminders about deadlines established in the contract terms.
5. Lack of Respect for Your Time
The other side of the coin is when clients are overly communicative or nitpicky about your work. If clients insist on updates or edits that stretch your time beyond a project rate, it’s likely they will find something to complain about in the finished project as well, or find an excuse to talk you down from established rates.
Clients will often value their time over yours, but be careful of getting caught in a dynamic where you privilege the client’s needs. Being responsive and meeting client demands is part of the work of a freelancer. But as a professional small business owner or solo entrepreneur, you have every right to draw the line if you are not being compensated for additional time and effort that wasn’t accounted for in the original project proposal.
6. They Won’t Pay Online
This is not 1993; payment through Paypal and other online services is normal in 2018. If you have clients who resist paying online, treat that as a warning sign.
With free and accessible options available, there’s no excuse for clients to refuse to pay online. The ease of online payment processing allows you to track your income and process it painlessly, and it also makes things easier on the client. Clients who insist on paying by check or sending payment by mail may have no intention of paying you at all.
7. They Demand Delivery up Front
Most freelance work is not like selling products. With a product, you can take it back and sell it to someone else if the buyer doesn’t pay. With freelance work, however, usually that isn’t an option.
So if a client asks for delivery before payment, be wary. Sure, there might be a good reason for this request — and your trusting heart or need to keep the client might urge you to meet this demand. But it doesn’t end well. It really doesn’t. So don’t cave to this request, and view it as a sign that there might be payment issues ahead.
It is completely reasonable for you to delay full delivery of your completed project until you receive partial or full payment. Clients are entering into a contractual arrangement to utilize your expertise. Depending on the nature of your work, you can deliver a preview or excerpt. Once the client has received your completed project, their incentive to come through with payment drops dramatically. So you are totally within your rights to retain your own creative property until they fulfill their half of the agreement.
Unfortunately, as a freelancer or small business owner, you can’t always rely on your clients. But staying staunch in your agreement is not only a necessity, it’s a sign of integrity for your business that will keep valuable clients returning. Get those invoices taken care of before the project has drifted past and you find yourself swimming upstream to chase down your elusive client.
As appeared in manta.com
JT Ripton is a business consultant and a freelance writer who enjoys writing about a myriad of topics, business and technology being a couple of them. Ripton has written for companies like T-Mobile, Frontier Internet, Hughes Internet and others. You can reach him on Twitter @JTRipton.