How To Deal With Clients With Longer Payment Timelines
The other day I was in a Facebook group where someone talked about a company that was taking forever to pay. They asked if this made the company shady, and to my surprise, other freelancers were saying yes. Not all clients can pay within seven business days. You might be your boss, but some companies can’t give you money as quickly as you want it. Here's how to deal with those clients.
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In today’s episode, we’ll be chatting about how to deal with clients with longer payment timelines.
When You Are Working With Solopreneurs, You’ll Probably Get Paid Quickly
I love working with solopreneurs because they can usually pay quickly. Solopreneurs only have to answer to themselves, so there isn’t a ton of red tape when it comes to paying you. Most of the time when you are working with an individual they can settle a bill in a few hours. This spoils a lot of freelancers, especially when they start working with big companies.
When You Work With A Company, You Have To Deal With Their Structure
Business structures are there to protect the company. What if someone sent an invoice that wasn’t approved? What if the number you put on the invoice was drastically different than the number you should have given? Structure helps protect the business, so they can keep their doors open.
The Person You Are Talking To Might Not Be The Person Who Pays You
Unless the person you are speaking to works in the finance department, there is likely a disconnect between you and the person who pays you. Someone else handles the bills because it’s what makes sense. A marketing manager doesn’t make a great bookkeeper.
Understand What The Payment Timeline Looks Like
Before you begin a contract, you need to understand the payment timeline.
Understand what the payment timeline looks like.
When do you invoice, when should you expect payment after an invoice is sent, etc.
Hammer that out in the contract, so you can attach things like late fees if necessary.
Don’t Set Yourself Up For Failure
Setting a net 7 payment timeline sounds great, but many businesses can’t accomplish that. You need to set reasonable expectations, so businesses can meet you there.
Related Reading: How To Pitch Multi-Million Dollar Companies In Your Industry
Once You Understand The Payment Timeline, Set Late Fees Accordingly
If you agree to Net 30, you can feel free to set late fees if it takes them longer to pay you. If they’ve been good about paying on-time, you may opt to waive a late fee once. Don’t be afraid to add late fees if they were expressly written in the contract and they broke the terms of that agreement.
Who Has These Longer Payment Timelines?
Next, let’s cover who might have these longer payment timelines.
Big companies
Magazines/Feature Writing
Government contracts
Heavily regulated industries
Be Flexible
Last but not least, be flexible, but firm. Understand that your clients' version of a reasonable payment timeline might be different from yours. Bend with it, as long as you discussed it previously. Don’t be afraid to add on late fees after the company has passed its due date.