Get Paid On Time: The Freelancer’s Guide to Securing Income
Post #55: These 5 top tips will help you get paid.
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Did you know…?
⚠️ 72% of freelancers report having outstanding invoices that clients have not paid. (source)
⚠️59% of freelancers are owed $50,000 or more by late paying clients. (source)
⚠️ In the U.S., small businesses are burdened with approximately $825 billion in unpaid invoices, equating to 5% of the nation's GDP. (source)
In this newsletter, I’m calling attention to a major challenge that freelancers and small business owners commonly face (and which poses the greatest risk to business success): Getting Paid On Time.
Specifically:
The importance of using contracts and not starting work until they are signed.
Best practices for requesting payment via invoicing.
The benefits of up-front deposits and completion milestones.
Why you need to follow up and set boundaries with clients who push your limits.
What to do when you just can’t get the money you’ve earned.
In this brief guide, you will learn how to set up your business for success and reduce or avoid late payments and non-payments after the work is done.
👉 Also, be sure to check out these resources:
Bootstrap Your Business Workflow - a step-by-step guide with the links to all of the top daily posts that walk you through the process from scratch
BYB Book Recommendations - a collection of the best business books to help you on your entrepreneurial journey
BYB Alerts & News - urgent updates for self-employed and business owners - delivered to your inbox - so that you can be more prepared
BYB Documents - a repository of guidance for important business documents with instructions and guides to use them in your self-employment journey
Getting Paid Late …or Not at All
Freelancing offers a great deal of freedom, but it also brings one of the most common and stressful challenges: getting paid on time.
Late payments can disrupt your cash flow, delay bills, and introduce unnecessary stress. And non-payment can put you and your business at risk of failure.
But the good news is that with a few proactive strategies, you can significantly reduce the chances of late payments and ensure you’re compensated for your hard work.
5 Top Tips to Get Paid On Time
So let’s get into what you can do to avoid late payments or non-payment.
(1) It’s Not Real Until the Ink Is Dry
Before you start any work, it’s essential to have a solid contract in place. A clear agreement helps protect both parties and sets expectations from the outset. Without it, you’re left vulnerable and with no recourse should any issues arise down the line.
Your Contract should cover these absolute basics:
Agreed-upon rate (a monetary value, such as Dollars).
How you’ll be paid (i.e.: hourly, per project, or on retainer).
Payment terms (Net 15, Net 30, upfront deposits, or milestone payments).
An outline of the scope of work (to prevent any misunderstandings about what is included).
Clarity on when ownership of the work is transferred.
Late fees for overdue invoices.
This is just a basic list, so be sure to consult with a lawyer to ensure you’re covered.
"Never sign a contract without reading it, and never make a contract you’re not willing to enforce." - Mark Twain
(2) Invoice Like a Pro
How you invoice can make a big difference in how quickly you get paid. A disorganized or unclear invoice is likely to cause delays, so make sure your invoices are professional and easy to process.
Try these tips:
Use reliable accounting software or a clear template
Always include payment instructions (i.e.: bank details, PayPal, or another method).
Send invoices promptly once the work is complete.
Number your invoices to make it easier for both you and your client to track payments.
If your client requires a purchase order number, be sure to ask for it in advance to avoid delays caused by missing details.
Discover more guidance for invoicing and download an invoice template:
(3) Get Paid Upfront or in Milestones
One of the best ways to ensure you’re paid on time is to ask for money upfront or establish payment milestones.
Requesting a 50% deposit for larger projects or splitting the project into smaller, milestone-based payments can provide a safety net if the client delays or doesn’t pay in full.
For ongoing work, consider using retainers so that payment is predictable and comes before you start the work.
🚨 Warning! 🚨
If a client resists paying upfront, be cautious as this could be a red flag.
Serious businesses are accustomed to paying deposits to secure services.
(4) Enforce Boundaries & Follow Up
Sometimes, clients simply "forget" to pay. Other times, they may be hoping you’ll let it slide. Either way, you need to follow up to ensure you’re paid.
Don’t be afraid to chase down a payment.
Try these steps:
Start with a friendly reminder as soon as an invoice is overdue.
If there’s still no response, escalate to a firmer follow-up. Be clear about your expectations, and if necessary, stop all work until payment is received.
If your contract includes late fees, be sure to enforce them.
Remember, the longer you let the payment slide, the harder it becomes to get it settled.
Here’s a simple email template to get you started:
"Hi [Client],
just a friendly reminder that Invoice #1234 was due on [Date].
Please let me know if payment has been processed or if you need any details from me to complete it.
Thanks!"
You may need to remind your client of the payment terms, methods for receiving payment, and late fees per the signed contract.
(5) Protect Yourself From Non-Payers
Unfortunately, some clients will just refuse to pay, even after reminders. If you’ve followed up and the client is still ignoring you, it’s time to take action.
Here are a few options:
Start by sending a final warning, outlining the next steps you’ll take if payment is not received.
You may need to consider more formal avenues like collections or small claims court, especially if the amount owed is significant.
You can also leave a factual, professional review to warn other freelancers about your experience.
Regardless of the steps you take to pursue your earnings, having a clear, enforceable contract will make it easier to navigate legal action.
Getting paid on time is all about being proactive, setting clear expectations, and protecting yourself.
Start with a strong contract, use professional invoicing practices, and don’t hesitate to follow up when payments are delayed.
By taking these steps, you’ll ensure that getting paid is the least of your worries, so you can focus on doing your best work.
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