How to Stop Attracting Deadbeat Clients

If you're paid late or getting stiffed altogether, here are three strategies to ensure you get a fair shake

Photograph by Getty Images/Vetta

A Bureau of Labor statistic shows that by 2020, 40% of the workforce will be temporary. You probably already know someone who is a consultant or freelancer, and you may be one yourself. When you earn your salary project-by-project, it is critical that you get paid what you are owed in a timely manner. If you’re finding it difficult to collect, here are three strategies to follow:

Make collection a part of the process from the beginning.

Ask for a deposit. Charge a registration fee. The easiest way to avoid late payments is to make payment the first step in working with you. If you need to get started before money changes hands, ask early and ask often about getting paid. If you work onsite at the client’s office, ask to meet with accounts payable when you’re introduced to everyone else. Don’t wait till the end of a project before collecting on your fee.

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Make it easy for clients to pay.

Take credit cards. Invoice by Paypal. Offer a discount for early payment. These are a few examples of how you can expand payment options for your clients. If your customer is a company, they might have to go through another department to get a company check, but they can use their corporate credit card much more easily. If your customer is an individual, they may not want to give you a credit card but they’ll willingly use an established third-party system like Paypal. If you feel your audience responds to sales, offer a 5% discount to pay in full during the first week.

Stop giving away your best work.

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I recently coached an entrepreneur who is doing a full media training program for an executive as part of the “interview” process to work with this executive’s company. This is too much, like an ice cream store giving away a cone instead of a mini-spoonful. If you give away too much, the prospective client may not need to pay for more. If you’re willing to give so much for free, you drive your own value down, making it difficult to charge a fair price later. Know when to stop. Share enough insight to demonstrate your value and when the client asks for more, lead them into a discussion of how you might work together, including a discussion of your rates.

You may not intend to attract clients who don’t pay, but if you don’t set up the right processes and incentives, you may inadvertently encourage clients to pay slowly or not at all. If you are currently in business for yourself, do an audit of your payment history and see which of these strategies make sense for you to adopt. If you are thinking about starting a business, do some introspection at your own habits and preferences and structure your payment process accordingly — e.g., if you tend to give away too much, set up your consultations so that you stop yourself at a certain point.

Caroline Ceniza-Levine is a career expert with SixFigureStart®. She is a former recruiter in management consulting, financial services, media, technology and pharma/biotech.

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