4 tips for finally getting paid + how to handle invoice disputes the right way

finally getting paid

“Well, maybe just one more day to see if they pay.”

Have you ever said this to yourself? (I have.)

One of the most troublesome parts of freelancing is invoicing and collecting payment. Nobody likes to be the bill collector, but sometimes it has to be done – and as freelancers, we get to wear that hat, too.

If you’re anything like me, you know that anxious knot that forms in your stomach when you expect a battle over a bill.

You also know the frustration and anger that comes when a client tries every trick in the book to get out of one.

So I’ve developed these few tips that have saved me time and time again when gently but firmly rejecting invoice disputes. For sure, the haggling isn’t any less unpleasant, but armed with these tactics, you’ll have the upper hand.

Get paid first.

Every time I’ve ever started working for a client without getting a deposit first, I’ve kicked myself. Not only does it set a precedence and make it very hard for you to get a deposit on your second project, it also leaves you stressed about the possibility of having unintentionally done work for free.

Repeat this to yourself: “NEVER start a project without payment.

Getting payment first also helps to establish time frames. In my contracts, I stipulate that work begins when I receive the deposit. This helps define when a project officially starts.

So when your client says,

“But you said three weeks on April 30! You missed the deadline,”

you can respond with,

“I didn’t receive the deposit from you until May 15, which is when, per my contract, the project starts. I finished the project within the time frame.”

Get it in writing.

The longer I freelance, the more wary I am of verbal discussions because there is absolutely no record of what was said. So whether in-person, over the phone, or via Skype/GoToMeeting, be sure to take notes.

As soon as possible (while it’s fresh in your mind), email your client summarizing the conversation. Ask them to respond if they perceive your meeting differently.

This way, if you have a dispute in the future, you can point back to the email and show them what they agreed upon.

Example email: “Hi Andy, Thanks for calling today – I think we’ve developed a great plan of attack for the following revisions: <insert revisions here>. As we discussed, the total cost for these will be $385. If you have any questions or concerns regarding this or any portion of our project, please contact me as soon as possible.”

Always have a written record for the following:

  • Requested project changes
  • Budget/price negotiations
  • Time frames & due dates

Save all email correspondences.

No joke, recently a client of mine actually tried to claim I owed them in an effort to get out of an invoice!

I got the better end of a deal on trade services agreement for a previous project that wound up falling through, so I agreed to apply some of the invoice to that previous deal, which left them with a reduced invoice of less than $250.

A month passes of me trying the “friendly reminder” invoices. Then they come back with me owing them for the original lopsided trade services agreement. Perhaps a simple oversight, but I saved the previous emails where we both agreed to the reduced invoice.

After showing them the conversation history, they relented and cut me a check that day.

Moral of the story – SAVE YOUR EMAILS. You never know when you might need to refer back to them in an invoice dispute.

Add a usage clause to your contract.

I’m always amazed by this, but I’ve had the following conversation multiple times:

Client: “Hi, I got your invoice for <insert project here>, but we decided not to use it.”

Me: “I’m sorry to hear that, but per my contract, payment is due regardless of whether or not you used my design.”

Client: “But we didn’t use it.”

Me: “I understand that, but I still did the work, and per the contract you agreed to, your invoice is still due.”

For some reason, many clients feel that if they don’t use your work, they don’t have to pay for it. So I’ve added a usage clause to my contract explicitly covering design work that’s ultimately not used. It goes like this:

All payments are non-refundable and required even if deliverables are not used by client.”

The dos and don’ts of invoice disputes

  • Always be professional and mature, regardless of your client’s behavior.
  • Don’t be afraid to confront the issue – the longer you wait, the harder it is to collect payment.
  • Start out friendly and understanding. You’ll have plenty of time to dig in and express your disappointment as the situation drags out.
  • Phrase your statements as the choice your client has made (e.g. “I have no choice but to,” “I’m disappointed that I’m forced to,” etc.)

Tell us about your invoice disputes.

Have you ever succeeded (or failed) in invoice dispute negotiations? Do you have specific situations you’d like advice on handling? Leave a comment on this post and share your situations!

About April Greer

April is a go-to freelance designer with a rare combination of creative expertise and technical savvy. She is available for subcontracting and speaking engagements – visit Greer Genius for more information.

Comments

  1. The best part about email is you can compose a letter and then NOT SEND IT. So my first rule of thumb is to write an email about an invoice dispute freeform. Then I let it sit and go back to it and remove all the emotion. Stick with the facts, using dates or old emails where possible, and lead the client through the process. Most times this will result in clients seeing their error and remitting payment, or you may even see an area where you dropped the ball and can offer amends (reducing the fee, another round of revisions to make it right, etc.)

  2. Samantha says:

    Hi April!

    Again a very helpful article. So far I haven’t had any issues with clients since I’m fairly new and most clients are from friends of friends.

    I was wondering if you were ever in a situation where it involved lawyers. Did you need lawful advice when it came to contracts/service disputes? Some of my previous professors recommended to get a lawyer, but when it comes to freelance is it possible that we don’t need them?

    • Samantha,

      I’ve never had to employ a lawyer as a freelancer, but if I were to pursue a nonpayment legally I am prepared to consult with one. I do have a financial/business consultant, though. They can also help with contracts as well as do your taxes and minimize your tax bill.

      If you need help with your contracts, I highly suggest you check out Preston’s ebook, Contracts for Creatives. The resources he provides are worth tenfold the asking price.

      Great question!

  3. Great post! I really appreciate the advice on the usage clause. Adding that to my contract immediately!

    • That clause alone has really strengthened my contracts and it goes a long ways toward creating something your client actually uses! (It sucks to hear “oh, we didn’t use it.”)

      Glad to help!

      April

  4. Many many thanks. I just got into freelancing and payments are usually a sticky issue, but your article has cleared all my doubts. Thanks a lot again.

  5. Great article!

    If I can offer one bit of advice, it would be to remain stern but fair. Clients are bound to miss an invoice or payment from time to time. Heck, we’ve all been there with bills ourself, we forget, get overwhelmed with work, or something else. Always be clear and consise with your agreements or contracts.

    • Joe,

      So true. Even good clients miss a payment, and it’s not worth ruining the relationship over one late invoice. Freelancing is all about more flexibility!

      Thanks for sharing.

  6. Really great article. Invoicing disputes are one of my biggest fears, and this article really helps clarify how to handle them. Thanks!

  7. I may state the actual value on a invoice and would get paid up front, but another problem of mine is those that want to barter and I clearly state that I take checks and credit cards in my invoices.

    • Whitney,

      Trading services is a popular way for new businesses to try to get services with a small budget. If you aren’t interested in accepting them, make sure you state that up front and put it in your contract that you do not accept service trades. This will stave off requests after work is done.

      Good luck!

  8. I forgot to do a contract with a lawyer and he decided that he only will pay me $200.

    “I did not like your design/we are not going to use it” phrases are my favourite.

    And the last case.. was a corporate design that I did for a “buddy” of mine and I don’t know why I decided to proceed without a contract. At the end of 3 weeks of work, he only paid me $500 of the $1800 owed saying that he will be giving me more ASAP.

    I trust him, and waited… It’s been more than a month already.

    He always gives me a date and time of the payment and he never calls and the money is never there. For the last 2 weeks, he had been ignoring my calls and giving me so many excuses about bouncing checks from payments from his clients and that he does not have the money. Then he starts using other people’s cellphone. I have even gone to his business to ask for the money & an explanation—always very politely—but it’s always lies..

    I don’t understand why people don’t like to pay the money that the owe. It’s so unprofessional and gives a lot to say about your personality.

    • Fesaco,

      Unfortunately, not everyone has stellar morals and ethics in business. People, even “friends,” will cheat you in the name of business.

      Lessons learned, huh? ALWAYS use contracts.

  9. It’s a shame that you have to go to such great lengths to ensure payment for creative work! Generally, people wouldn’t try to get out of paying a plumber or a mechanic. And the fact that they would try to get out of paying for your design just because they chose not to use it. What do people think this is, seriously ?!

    It would be interesting to know how different clients react when you request upfront payment. Does it effectively weed out the dodgy cheapskates ? Have you found that it influences the way they deal with you through the project, i.e. do they respect you/ your work more just because they paid for it ?

    • Sheila,

      Almost none of my serious clients/prospects shudder at the down payment. The most wonderful thing about getting a down payment is the incentive to finish the project since money is on the line.

      The cheapskates just don’t follow through, and they wouldn’t have anyway. I set my rates above the cheapskate pricing, anyway!

      Great questions!

  10. Lucky I live in a pretty honest town, the only payment I have never received is when I was told that the business cards that I designed for a start up business, went out of business before it even got started. I actually just let it go, I was sure that there were plenty of people taking this guy to collections and he only owed me 200. It was sad but when he told me that he couldn’t pay and all his savings was invested in lawyers I thought well you already got what you deserved. The man was hard to deal with and I had better ways to spend my time.
    I always send low resolution unusable jpegs until I receive a payment. If they ask for a higher resolution I take the time to add a transparent PROOF to the file. It surprises me when people say they don’t use it so therefore don’t need to pay. I always explain to my customers honestly but kindly, its like asking someone to mow your lawn and then explaining that you went on vacation and never had a chance to use it, so you want your money back. When people see the correlation between labor and time they relate better, especially if the example used is something they have done before.

    • Shauna,

      For just $200, it sucks, but it’s worth it to just drop it, especially since it’s very unlikely you’ll ever get it.

      Using metaphors works so well – when you can relate to something they understand, usually they become human again and relent.

      Thanks for sharing!

  11. Wow, your experience is very usefu, especially when you just start and need to be sure the client pays, but as many are afraid to ask for the first payment. But I totatlly agree with you – first payment is a must in any work – it’s like insurance – everybody understands wh they need health insurance, the same thing is with the payment first

  12. Good tips. I’ve also developed a ‘discount caveat’. We all have a rate card fee over and above what we are happy to earn, but it’s often pitched to allow some negotiation (we get paid what we want, the client feels like they’ve got a discount).
    Well I always quote/estimate/bid at the rate card rate then put a line item in deducting the ‘discount’ and adding a note, “discount only applies to invoices settled within the terms agreed.”
    This allows a friendly call a few days before the terms period ends to remind them to pay and keep the discount.

    Of course, some clients just don’t care, and will delay and delay. When it gets stupid, I email the project manager and withdraw copyright and (as my clients are design agencies) tell them I will be approaching their client to recover the funds (allowable in UK). That really concentrates their minds!

    The hardest thing is the designers get caught in the middle, the designers are lovely, and would always pay on time, but their accounts departments often have cash flow agendas we freelances often have to ‘subsidise’. Pity. Makes the job uncomfortable sometimes…

  13. Josh Pearce says:

    What about completing a job and final payment was a bad check? Called left messages no responses.

    • Josh,

      Getting a bad check is no different than not getting paid at all. If you can’t get a response from them, you have to decide if it’s worth it to pursue legal action. Don’t threaten unless you’re willing to do it.

      If it is, send a letter informing them that they have a week to pay or you’re going to pursue legal action. You can also email them and leave a phone message to be sure they’ve gotten it.

      If they still don’t pay, you’ve got to get a lawyer and go after them. It’s expensive, though, so make sure you’re doing it for profit, not for pride.

      Good luck!

  14. Good article! Invoice disputes are problematic for many small businesses, not just freelancers. And today, even the large ad agencies are fighting clients who drag out payment. (See AdAge: m/article/agency-news/p-g-stretches-time-frame-paying-agencies/241303/.) Always have a scope of work, explain key contractual clauses up front, and record and archive all client communications as part of project records. Everyone today seems to expect designers to work for free (for the love of their art, yadda yadda). Behave like a professional to be treated like one–your perceived value in the eyes of clients will be enhanced.

  15. April,
    I’ve certainly never heard of any freelancer/independent contractor NOT going through this, at least once anyway! I wonder sometimes, if businesses and contractors realize how frustrating it is to have to send invoice after invoice with follow-up emails and potential phone calls only to either get no response or continued delay.

    I too, now employ the “deposit down,” approach. It seems to help a great deal with getting the ball rolling and establishing a firm date/timeline.

    I think it’s also important to establish a reasonable time table for payment once the invoice has been submitted…and to do this from the start of a project. This discussion might reveal that the client isn’t in a position to pay in a certain time period and then you have to make the decision to work with them or drop them all together. An example: ask/tell the client that you expect to be paid within a two week period and if not then a possible 10%-25% markup of the initial invoice total goes into effect after each week the payment is late. They might tell you, they don’t operate that way and they only pay once a month or something to that effect. This might just be too long of a wait…so it’s important to establish this timeline, either way, and could ultimately determine if you think it’s worth working with them or not.

    Thank you for taking the time to write this post!

  16. So far I haven’t run into any invoice disputes. Here’s hoping that trend continues. Thanks for the article April

  17. Alejandra says:

    Thank you very much for this information, it was very helpful!

  18. Use Harvest and use the automated reminder, every 7 days as soon as they don’t pay in time. This really works, because 1. you don’t have to think about sending that e-mail or making that phone call, so little less to worry about 2. it gets on their nerves, while at the same time it doesn’t get in the way with your professional relationship – they know it’s automated and it looks very professional

  19. Thank you for this great post April!

    Do you have any suggestions as far as where I can start to draft a contract? I’ve run into issues in the past where a contract would’ve been more than handy and I just have no clue where to start.

  20. Nice tips!

  21. Hi April
    Recently towards the end of a project a client sent me an email headed address for brochures. The email just had an address.

    Thinking this was to go on the brochure I added it to the back of the brochure. I emailed a proof and also posted a hard copy proof as the client was interstate at the time. The client okayed the brochure and it was printed.

    It turned out that this was the address he wanted the brochures delivered to and should not be on the brochure.

    He is now blaming me and refusing to pay.

    • Lee,

      Do you have any communication stating that they have the burden of okaying the final proof? That would be really handy for your case.

      It’s generally understood that the client has the final responsibility of proofing their project. Did they email you an “okay to print” or anything that shows they expected the project to be printed as-is from the proof?

      If you can’t prove that they signed off on the proof, you have a couple of options (depending on how you want your relationship to go and how much money we’re talking):

      1) Demand payment, reminding your client that they have the burden of signing off
      2) Offer to split the cost of reprinting the brochures

      Good luck! Let us know how it goes.

      April

  22. Great article. Cheers to this.

    I have never been employed. I came out of campus and ventured into freelancing… I had mentors in this field but some things you have to experience to learn. When starting out, i didn’t apply the deposit first rule… HUGE BLUNDER… I was new and didn’t have much confidence in my work. I once got a client through someone (sort of an agent) and when the job was done everything went silent. It got to a point I jumped the agent went to the client and asked if the payments were done. She replied and said she cleared it and even got a receipt . SHOCK ON ME… i had to go to the agent and demand my pay…FRUSTRATING…she said she will give me money for the logo and business cards. When I asked for the brochure pay, She said, THE CLIENT DID NOT USE IT, SO IT WONT BE PAID FOR… from then on, I learnt even simply securing a PDF design to send out might sound extreme but it does help when they call and say why can’t I print it out… you simply say, you have not cleared your invoice. :)

    Then came the LAWYER clients… I learnt the hard way, that with this category, I just have to apply a 100% pay before the job starts.. The reason is this, graphic design is an important job just like any other. I take pride in what I do and i love it. No one has a right to take me for a ride. If you seek services from a lawyer they make you pay non-negotiable, non-non-refundable fees just to get at times a 4 line paragraph advice. So why then should they take me round in circles when it comes to them paying for my services?

    Every-time someone seeks my services, 1. I state clearly my terms and conditions. before i agree to take on the job, I send out a detailed quote/contract stating what the client wants, How many (working days) it will take, how many samples the client will receive, EDITS ALLOWED and the final product, if in hard or soft copy. I then put in bold that work will commence after a 75% deposit. (This covers my running costs and a bit of my profit). Just when the job is about complete, i send my invoice to ask for the balance then after i receive it i send out the final work.

    Then there are those clients who think that editing includes redesigning a layout. I once handled a client who kept making edits that kept making the design of the annual report shift. meaning every time I had to adjust 50 pages. Warn your clients in advance. It helps cut so many back and forth changes and you won’t feel short changed. Most clients don’t accept new invoices once they agree to work with you… ALWAYS INCLUDE YOUR COMPUTER TIME FEE when you do your costing.

    For new freelancers, take heed of good advice when you get it to avoid frustrations that will make you want to quit the best job ever…

  23. Kate,

    Y’know, every professional I talk to says if there’s one piece of advice to adhere to, it’s to stay away from working with doctors and lawyers. I’ll add you to the list.

    Sounds like you’ve learned some valuable lessons – hopefully your luck turns around soon!

    April

  24. One thing I’m learning is to not just put a deadline on payment once the invoice is issued, but a deadline on the return of proofs etc. I’ve had some projects that have dragged on and on because the client couldn’t get around to sending revisions. I have no problems with getting the deposit or getting paid once I send them the final, but sometimes I’ve done the majority of the work (the main design and a round of proofs) and then the project falls into a black hole for awhile. I need some language to add to my contract the will allow me to invoice for the parts of the work completed if edits aren’t returned in _____ (time). These are good, honest clients — just very busy. Thoughts?

    • BW,

      I’m the same way – by far the largest time-suck in any project is the client getting information to me. So now I stipulate when the first proofs can be expected, or when the steps that I have total control over can be expected.

      I find most clients don’t bat an eye over this, and when the project is waiting on them, all of a sudden it’s not quite the priority that it once was.

      Now, for clients who drag the project out, I have a clause that goes, “Projects will be considered inactive after 4 weeks of client inactivity. Inactive projects will be billed for work completed.” Does this help?

      Thanks for sharing!

  25. All great advice. I’d add that in addition to our payment terms, we print on every invoice: ““Unpaid amounts past 30 days are subject to all applicable collection fees.” No one likes to have to go to court to get paid, but at least if this unprofessional situation occurs, we have a leg to stand on when it comes time to applying interest/fees/etc.

  26. Amy Gypps says:

    Hi,

    I am work in events and I’m freelance. I recently took a job for a company where I was booked for 2 x travel days and 2 x live days. But while on the job the company changed the rules to the travel day stating that in order to receive payment for the travel days I’d have to do additional work of unloading the van which involved me going into the city and back with no additional payment.

    Now because I did not come and unload the van the company will not pay me a travel day. My question is I have invoiced for the correct and agreed orginal payment but they have taken off the travel day. I want to know if legally they can do that? I thought you have to pay the invoiced amount?

    Thanks Amy

    • Hi Amy,

      First, I have to add I’m not a lawyer and you should contact one for legal advice. I’m simply a fellow freelancer offering tips.

      What does it say in your contract? The contract is the binding document, so usually the courts abide by what both parties agreed upon prior to the job. Also, if you have any emails or other written communication prior to the change, save those to back up the agreed-upon terms.

      Generally, if the company wishes to change the terms of the contract AFTER a contract is signed, you have the option of accepting the new terms, renegotiating the contract, or refusing the new terms and terminating your participation (you still get to charge for the work you’ve accomplished thus far in accordance with the original contract). It matters when they told you in relation to the travel days, too. You should keep all correspondence between the two of you over the changing terms as well. I don’t know if finishing the job sans disagreeing to the new terms is a tacit acceptance or not. And then there’s also the grandfather clause, and I don’t know if that applies here or not, either.

      For your reference, an invoice is not a binding document, meaning just because you send someone an invoice doesn’t mean they are required to pay it. Otherwise, people would be randomly sending invoices to other people and they’d be legally forced to pay. The invoice itself is more for record-keeping and a reminder to pay as specified by the contract.

      Does that help?

      April

      PS – Sounds like the company is a bit under-handed in changing their terms in the middle of a job.

  27. Hi,
    I have a very difficult and shifty client (my only at this stage) who has been playing games to wriggle out of paying outstanding invoices. He has now started disputing the invoices now that these are due.

    I tried everything and been very patient but firm when asking for my money. I have an email trail and have sought informal legal advice, as engaging a lawyer would cost me too much.

    Can anyone help me with some ideas as to how to deal with this?

    • Have you considered Mediation?

    • Andre,

      Dea has a great point – mediation is a much more cost-effective way to go. I don’t know anything about it, but you might check into selling the debt to a debt-collection agency.

      Also, for future projects, read Jayne’s comment above about putting a clause in your contract that the burden of collection fees are on the client.

      ——

      However, it sounds like your real problem is finding good clients so that you can dump this one and chalk it up to lessons learned.

      Check out the many awesome posts here on GDB about finding new clients so that you can remove yourself from this crappy client!

      Good luck!

      April

  28. I agree that these are great terms to abide by, and I wish I had thought them out sooner to avoid the situation I’m in right now, but at least I’ll know to be this thorough in the future. I’ve just begun freelancing during my break between semesters (senior in art school) and man, it’s a drag to have people ask you to cut your rate, then ask you to consider only charging for what they used because of “creative differences” when all their feedback until that point had been positive! I fear now that they’ll snub me if I send an invoice, but am trying to be confident in pursuing payment. I’ve heard it time and time again that you protect yourself by taking yourself & your work seriously. You’re right that newbie freelancers don’t feel 100% confident in their work, as I don’t! Definitely will handle this differently in the future. Thanks for a great rundown of things to watch out for.

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