We answer three questions posed in the freelance sub-reddit. We cover topics like how contracts really help, getting paid and what to do if you undercharge a project.
In theory contracts are great, but if a client stiffs you on a payment what can you realistically do? Legal advice and representation would probably cost as much if not more than what is owed.
In most cases the contract will help to defuse the situation if there’s a conflict with your client. You can refer to the contract to remind your client what they agreed to (here are the payment terms you signed up to). It’s very difficult to argue against what is there in black and white when both parties have agreed to it.
If the situation is more severe you can use your contract to highlight they’re in breach of contract and must remedy the breach. If they don’t remedy the breach you can take further action.
Secondly, you can put clauses in your contract that better protect you throughout the duration of a project. Payment terms, a pause clause, late payment fees and more.
Affordable legal representation can be found with your insurance. For example:
- If there’s a claim for perceived negligence then your professional indemnity policy could assist
- For general legal advice there’s the legal advice helpline with the legal expenses policy
- If there’s a late payment use the debt recovery service included in your legal expenses insurance
So far every client I’ve worked with has paid me regularly. However, some freelancers have had unpleasant situations with their clients and they never get paid for the work. How do I protect myself from this happening in the future?
If you freelance for long enough you’ll very likely encounter payment issues. 59% of the problems we see at With Jack involve payment disputes.
Whilst this is difficult to avoid, payment milestones can limit the damage if issues do arise. Take a portion of the fee upfront that is non-refundable and use this as a deposit to book your availability. If the project doesn’t go ahead you’ve at least retained a percentage of the cashflow you expected.
Check out Work Notes’ freelance pricing guide. The guide costs a small fee, but you can also browse their many articles on pricing.
If you have insurance you can use the debt recovery service that’s included with the legal expenses insurance. A solicitor will chase your overdue payment on your behalf.
Another option is sending a ‘letter before action’ that puts pressure on the client to pay. If they don’t pay within a specified period you’ll pursue them through small claims court. We’ve seen this tactic used with great success. Most clients pay immediately without it going to small claims, but it’s important you don’t make this threat unless you intend on seeing it through. You can get access to a ‘letter before action’ template through your legal expenses insurance.
You can also use a third-party debt recovery service. The name ‘debt recovery’ is taboo and probably puts freelancers off, but all you’re doing is passing the burden of chasing late payments onto someone else so you can focus on your most important asset—your productivity.
When the client came to me they were asking for a 60 second animation, but this has become 2 minutes long. I’m in conversation with my client about reconsidering the initial quote because the project has doubled in size. Am I out of line for expecting fair pay for the extra work I have had to do even though the initial quote doesn’t specify overtime conditions?
To prevent this situation from happening the statement of work must be clear. This means being specific about what the quote includes—60 second animation, X number of revisions, delivered in the following format etc. This removes ambiguity.
Anything outside of the statement of work will be charged at an additional rate. This conversation will happen before the project begins to avoid any nasty surprises and get everyone on the same page.
In this specific situation it sounds like the freelancer didn’t have this conversation. I’d send the client the revised quote for the 120 second animation and, only if the client queries the quote, explain that the project doubled in size so required more time and resources on your part.
Most clients will understand and pay the difference. If not, use this as a valuable lesson learned. The statement of work must be clear, and anything that falls outside of it must be charged at an additional rate. The client will acknowledge all of this before work begins.