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Anne Wallingford, WordSmith


Freelancer's FAQ

Collecting Fees from Clients

To provide both encouragement and to help other freelancers, I have obtained permission to share this newsletter article with you.

     Source: Writers-Editors eZine, © CNW Publishing. Sign up for a complimentary subscription at (link will open in a new window).

     Collecting Fees from Clients The best way to avoid becoming your own part-time collection agent is to set up a good system that starts with your very first client meeting (whether that "meeting" be in person, over the phone, or via e-mail). You may not eliminate every instance of needing to go after slow paying clients, but you will at least cut way back on the need to do so. Try implementing the following system --

** Talk about money during your very first meeting with a new client. While discussing the project and what you can and will do, explain clearly your payment terms -- what you charge for and how, when you require payment, and that you always use a letter of agreement to be signed by both parties so you both know you are working from the same page.

** Request payment in advance. Unless it is a very small job of less than $100, explain that you require one-third or one-half or a minimum of $xx on deposit (or as a retainer), and that you will begin work on the project as soon as you receive that deposit.

** Compromise on the amount of the deposit or any other of your stated terms IF the client provides a good reason for why it would be impossible for them to comply, and IF it fits within the "ballpark" parameters you have previously set up in your system, and IF that client appears to be promising enough to work with.

** Find out their payment chain of command -- who gets the invoices, how preferred (fax, mail, e-mail), who must approve, who writes the checks, how long their process usually takes. By knowing this, you will know when best to get an invoice to whom and how.

** Prepare your Letter of Agreement, once all terms have been agreed to. Describe your understanding of what you will be expected to do, when you will have it completed, who must sign off on approvals and when they will do so, and what your fees will be for each task or segment of the project and when payment will be made.

** Begin work when you have exchanged signed copies of your Letter of Agreement, with any changes agreed to and initialed.

** Invoice on time and when it is to your advantage. If they pay all invoices on the 10th of the month, don't deliver your invoice on the 11th or you will wait an extra month to get paid.

** Follow up immediately after a payment is missed. If your terms were net 30, make your first call on day 31. If it was simply an oversight, you likely will receive your payment within the week. If there is a problem, you need to discuss it and work out a plan with them, plus get in line ahead of the others they are likely not paying either.

     -- Dana K. Cassell
Copyright CNW Publishing Inc., 2008.

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Wednesday, July 16, 2008