Getting paid: A designer’s two-minute guide to invoicing

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getpaid

Many freelancer designers seem to shy away or delay the process of invoicing a client after a project is completed. Somehow this same notion is shared by the client when it comes to paying-they shy away from it. Admittedly, invoicing is no easy task, especially when it comes to collecting a late payment, but it’s time for designers everywhere to be more bold in requesting payment for their work completed.

We all have had invoices that were either ignored or forgotten by the client. For whatever reason that may be, you were not paid in time for the work you completed. As a great freelancer you provide a superior product, impress the client and throw in a few favors at times but when it comes to getting paid, you might too shy to pick up the phone or send that email reminder. Meanwhile your client is up and running with your great design and conducting business as usual.

It’s time you get paid for the work you do. Don’t worry, it’s not rude to ask to be paid–it’s business. This article discusses a few tips for designers who are timid when it comes to collecting invoice payments.

Terms of payment

First, have you agreed to terms of payment with your client? In any preliminary contract or invoice you should mention what your payment terms are. Do you ask for C.O.D. or ask for payment within 14 or 30 days? Do you have a late fee? If so what percentage do you charge? Both you and your client should be clear on what the terms of payment are. This will lead to less confusion in the future.

Late Fee

The most important thing to remember when it comes to late fees is be consistent. If you apply a late fee to overdue invoices sometimes, then it is wise to implement it every time. Having this policy and not practicing it can convey a sense of being unprofessional about your business. Do you think by charging a late fee you’re encouraging prompt payment? Of course.

Rewarding your client

Another option is to reward your client for paying their bills on time. Sometimes people need motivation and, while paying the invoice is their obligation, perhaps offering a reward for prompt payment (something like 10% off the bill if you pay within a week) can make it easier to collect payment when a project is finished.

Auto reminders

Auto reminders are great way to remind your clients about their pending invoice without stressing you out or causing extra work for you. Kindly remind your client eery few days, every week, or every month depending on how your business is set up.

Online payment

Online payments are also a great way to speed up the process. You’re more likely to get paid using this method rather than to wait for a check to arrive. Having this option on your invoice is very helpful and can help getting your client in the habit of paying promptly.

When nothing seems to work…

Lastly, what about when your client is ignoring you, regardless of your efforts?. After months or years of unpaid invoices, if the amount is substantial, you may want to consider more legal or more effective tactics. A collection agency is one tactic that some designers use to kick-start the process. Some stop delivering any future requested work until they are paid. The stories are many, some end nicely and others may not, but it is up to you as a designer to find the best option and stick with it.

What else would you add?

Tell us how you would go about getting paid on time, or ways to improve the process of invoicing. What has worked for you in the past? What hasn’t? We’d love to hear your thoughts on the matter.

About Behzad Jamshidi

Comments

  1. another great article!

  2. When I’m working on a project that has tangible deliverables, I always make sure that a ‘face-to-face training/consultation session’ is included in the price and it follows completion of the tangible deliverable. I then make payment due at the time of that meeting. It’s a lot tougher to worm their way out of payment when they are looking you in they eye.

    • @Dave,
      That’s a great point, Dave. Do you ever deal with clients with whom it’s impossible to meet face to face? What do you recommend in those types of situations?

      • @Preston D Lee, I use Skype’s Share Screen feature. Very handy and free!

      • @Preston D Lee, I used to work with remote clients, and as a rule now, I won’t. If they put you in a situation where different laws apply to client / vendor relationships, you just ain’t gonna get that money.
        This may sound a little bit Neanderthal, but to my mind, the whole, “beg them then take them to court” method is a bit of a pussy method.
        I’ve turned up on a client’s doorsteps more than once.

        They paid.

  3. I’ve been very lucky in that the only clients that have ever stiffed me for my full fee were from eLance (but I get an up-front payment there, so it wasn’t a total loss). However, I also won’t start a project until my rather detailed Statement Of Work (which includes payment terms) has been accepted (in writing) and (for first-time clients) a deposit has been made for the job.

  4. If your client is ducking your calls, get a Skype account and call from a number they don’t recognize . Often going to their office helps. Out of town customers can be more difficult. Get a down payment up front. This proves they are serious and are more likely to pay at the end of the project.

    • @Scott Sawyer,
      Good advice. Using another number to “trick” them into paying is sometimes a difficult one. You don’t want to get a bad reputation, have them spread bad opinions about you, but you also want to get paid.

      I think it’s agreed that upfront partial payment is a great way to handle the issue. How much do you charge upfront?

      • @Preston D Lee, In my opinion, using a different number isn’t what I would consider a “trick” to get them to pay, just to get them on the phone. It may be a little bit on the edge, but I hardly think it is grounds to spread bad opinions about you. What would they say, “I was trying to avoid paying this guy, but he called me from a number I didn’t recognize”?

        We typically charge materials plus 25% of labor up front. Every time I have agreed to a project with out the down payment, it has come back to bite me. A legitimate customer will not have a problem with a down payment, and it establishes a precedent for paying. Even if there is a problem collecting at the end, my materials and some of my time is covered.

        Thanks for follow up questions. It is nice to see some one actually interact with their audience.

        • @Scott Sawyer,
          That’s a great point, Scott. I guess my thoughts are, when people spread bad rumors about another person they aren’t always truthful. They could say something like “All he cares about is getting paid.” But, a valid argument. I see where you are coming from.

          Totally agree with this statement you made: “A legitimate customer will not have a problem with a down payment, and it establishes a precedent for paying.”

          Well said.

          Also, Thanks for the kind words. I enjoy interacting, so I hope to see you back frequently for a chat. Best of luck.

  5. PROGRESS PAYMENTS
    Divide the contract amount into thirds and negotiate terms. Bill the first third to be due upon initiation — especially if it’s a new client. (good for cash flow). The second third should be billed halfway thru the project and the final third upon delivery. Cash flow is king and this helps.

    • @dave, Good point, but some freelancers have enough of a hard time getting the first payment, let alone 2nd and 3rd. However valid point for large projects.

      • @behzad, though easier to say than do, no one should begin work for a new client until they get some money upfront. too often you risk payment based upon a subjective appraisal as to whether or not the client “likes” what is first presented.

    • @dave,
      A very good point, Dave. I like the approach. Thus far I have primarily heard of billing half at the beginning and half upon completion. Dividing it into thirds can help your business grow (especially if you are new) by creating steady cashflow.

      What other things do you do to help cashflow stay steady?

      Thanks for sharing!

      • @Preston D Lee,
        what other things? invoice regularly (right after the job is complete). negotiate the terms as “due upon receipt” (and print that on the invoice). rarely does a client pay immediately but, psychologically, it helps when you call and remind about past due amounts. you can gently remind the client that the signed estimate states “due upon receipt”.

  6. Great article, thanks again Preston.

  7. As a web designer/developer i find the most convenient and effective way of getting someone to pay up is by threat of pulling down their site which can sometimes eventually happen.

    Give it a go if situations leave you no other choice.

    • @Dan Hanks, This will open up a whole new can of worms, it is best to try all other options.

    • @Dan Hanks,
      This is a common response, but I would be extremely cautious about it, Dan. Before doing something like this, I would make sure you have a signed agreement that specifically says that you are allowed to take down the site if they don’t pay.

      Has this worked for you in the past?

    • @Dan Hanks, Also why not get the final payment before uploading the files to the server, this is how I do it.

  8. Excellent tips for invoicing. Late fees are great way for catching clients that tend to either pay in an untimely fashion and/or have cashflow issues. I have turned down work simply because clients have said it shouldn’t cost me anything extra if they’re off by a “couple of days”.

    I have even stated on projects that until the client has paid in full I won’t launch their site and hand over the final deliverables. In this case, staging the work on your server is key to maintain control over the project. To put it bluntly, you can’t walk into a clothing store and borrow a shirt for 30 days.

  9. Thank you for this article! The only one that doesn’t sit well with me, at least not entirely, is the payment reward. Payment is expected and required, not to mention professional. I’m not training a puppy with treats, *lol*, I’m doing a job and I need to be paid. However, there is something to be learned from the idea. Maybe if a client is consistently good at paying on time you can offer rewards. A 10% discount on every Nth payment if all were on time. Or a total % refund on the total of N payments if all of them were on time or early.

    And I wish auto-reminding worked. :( I once setup invoicing to send email reminders based on how late payment was. After one month it starts weekly. After 2 months daily. After several months it can get to hourly if I don’t stop it. I once had a client who was over 4 months late and I found out they had filtered my reminders as spam, so even when it got to daily+ they weren’t getting them.

    • @TheAL,
      I understand what you mean about the payment reward, but you’d be surprised how many businesses actually do this as a means to get paid on time. Large companies many times will offer a discount for paying within ten or fifteen days instead of thirty.

      Although, the suggestions you made about after so many on-time payments in a row is a great one as well.

      What about clients who only pay once or twice (only a one to two-time jobs)? How would you suggest handling the same situation with a one-time client?

      Thanks for sharing.

  10. Not much to say on this topic other than to make sure ALL expectations, in terms of payment, process, deliverables, etc, are made absolutely clear right away, before you even open your sketchbook or they open their checkbook.

    Other than that, just felt like saying how much I dig the discussions that go on here on GDB.. comment threads are often more valuable than the actual articles, and I like it!

  11. Colleen Cole says:

    This is a great article. Thanks for the tips and suggestions.

  12. I was contacted by someone on craigslist for a web design quote. We’ve only had email contact. I gave a preliminary quote. He is contacting me on behalf of his client who is in a different state. I’ve told him that I need to meet with both of them so that we can hash out the details and have them sign the contract. So he say I can only meet with him. I saw the idea re Skype above, so that may be a solution.

    I wonder if I should just forget about this situation thought. It’s making me nervous.

    Is there a service where the client pays in full, as in escrow, and once the site has been delivered, the designer gets paid? There should be one. I’ve had bad experiences with getting paid and don’t want to repeat the same situations.

    Any advice on contract terms, negotiation, payment terms, etc. would be welcome.

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