Freelancer Tips

How to Make Sure You Get Paid as a Freelancer

How to ensure you get paid as a freelancer
I'm Caley!

Six-figure freelancer, digital marketing pro, business coach, and photographer. I'm here to help bold business owners get to the next level in their business.

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Have you or one of your peers ever said, “I haven’t been paid yet… and I completed the project MONTHS ago!!!”⁣

If I had a dime for every time I’ve seen this on forums and inside Facebook groups, I’d probably be able to pay off some of those invoices 😅⁣

If you’re going to be your own boss, you’ve got to get clients to pay outstanding invoices. ⁣While we do always want to assume the best of everyone, you absolutely have to ensure you set yourself up properly to get paid as a freelancer… or else you might be the next lead character in this recurring freelancing horror story.⁣ Here’s what to do before you begin the work, and also a couple of things you can do when clients don’t pay up.

1. Make clients pay a deposit

It might sound like a no-brainer, but this one is easy to forget, especially if you’re just starting out as a freelancer. It’s crucial that you get a deposit BEFORE you start any work. Some people take 25% as a deposit, some take 50%, and you should always stipulate that the deposit is ‘non-refundable’ in your contract. On bigger projects, you might want to ask for the total amount to be split into 3 or more payments as progress moves along – that way, you have some cash flow along the way.
I personally always take 50% upfront, and this deposit is required to secure a client’s booking with me, and therefore my availability.

Not taking a deposit is a huge risk. Clients bail. It’s the reality of the landscape. And without an agreement and deposit in place, the only one who loses out is you.

2. Get a signed contract

Not having a contract is a critical mistake you definitely want to avoid as a new freelancer. Make sure you always have a signed contract in place before you start work.

This should include a section that outlines your fees and payment terms for the work you’ll be doing. Be sure to lay out your rates, applicable taxes, when payments are due, which payment methods you accept, what happens if the client or yourself wants to terminate the agreement early, what fees clients can expect for late payments, and what happens if the client doesn’t pay. This is an important place to outline any interest you may want to charge – check out section 5 below for more information on this.

3. Make it easy to get paid

It should be as easy as possible for clients to pay you for your work. Depending on the size of the business you’re working with, they may have access different payment methods, or have cash flow considerations that may affect they way they pay their vendors.

If you only accept e-transfer, that might make things a little difficult. Personally, I accept PayPal, all major credit cards (via a Stripe account), and e-transfer. There are many free invoicing tools (such as Wave) that can help you collect payments online, via credit cards or direct bank transfer.

4. Withhold deliverables

If this is relevant to your service, you can consider not giving the final deliverables until the balance is paid. For example, if you’re a photographer, watermark your proofs and only deliver finals after the balance is paid. If you’re a graphic designer, watermark the assets and don’t deliver the finals until the balance is paid.

I typically do this with new clients on the services I can do it on. Once I have a relationship and trust established, I ease up on this.

5. Charge interest

Consider charging interest on overdue invoices. And make sure you state this penalty in your initial contract as well, otherwise it may not be enforceable. Make sure your invoice clearly states when payment is due, because you can only charge interest once payment is late. Your invoice should also include the present date, so that you can track how many days late your clients are in paying you.

Please be aware that by law, there is usually a maximum % of interest you can charge. Check the relevant guidelines where your business is based for your maximum., and consult a lawyer.

*I am not a lawyer and this should not be taken as legal advice*

If you are based in Canada and you want to charge more than 5% interest, make sure that your contract specifies that your interest rate is an annual rate – otherwise you will be limited to 5% interest per year.  

If you are based in the United States, don’t charge more than 10% interest per year. Some states restrict the amount you can charge in late fees, but you are most likely safe if you cap rates at 10%. You can find more information about how much interest you can charge, on a state-by-state basis, here.

Here’s a handy formula to help you calculate annually compounded interest: divide the number of days past due by 365, and then multiply the result by the interest rate expressed as a decimal (ie; 5% = 0.05%), and then multiply that result by the total balance of the invoice. Nice and easy!

6. Send friendly reminders when clients don’t pay

…Well, start friendly. Some invoice tools can be set up to send automatic friendly reminders for you, at intervals of 7 days, 14 days, and 21 days. If a client still doesn’t pay up after that, change your tone. Don’t be afraid to remind clients of the terms they signed onto in your agreement, and that you plan on enforcing them. People usually like to avoid lawyers and courts.⁣

Already dreading asserting yourself?

If you grew up in a household where setting boundaries wasn’t taught, or where boundaries were not expected, some, if not all of these steps may feel difficult. It’s simply not in your conditioning.

That being said, regardless of your existing neural programming, you are 100% capable of changing that, and getting to a place where you will feel confident in asserting yourself and the terms of working with you.

Oh, and guess what?

Your clients will actually respect you more because of it.

What are your tips for making sure you get paid as a freelancer?

Don’t forget to share this article with anyone who you think might find it helpful!

⁣For more Freelancer Tips, be sure to check out these articles:
7 critical mistakes to avoid as a new freelancer
Want to start freelancing? Do these 7 things first
Should you put your prices on your website?

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Hi, I'm Caley.
Your Soul Sister + New Business Coach.

I knew I wanted to work for myself since the age of four. Yep, I'm serious. However, I didn't take the leap into full-time self-employment until I was 27. It's now five years since then, and I haven't looked back once. I've served clients across the globe, providing winning digital advertising, e-commerce strategy, email marketing, photography, and more. And now it's time for me to pass this knowledge on to you.

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