CONSULTING TIPS: Ten Ways to Avoid Getting Stiffed

By Frances Chaves
Not getting paid for work delivered is a major hazard of consulting and freelancing. The Freelancers Union (http://www.freelancersunion.org/resources/unpaidwages.html) reports:

• Last year 44 percent of independent workers had trouble getting paid for their work.
• Three out of four freelancers are paid late or not at all at least once in their careers.

Here are ten tips to avoid non-payment:
1)    Never work without a contract. While this won’t ensure that you never get stiffed, you are more likely to get paid if the receivables have been clearly spelled o
ut and you and your client are in agreement as to what those are. Freelancers Union provides a contract template at https://be.freelancersunion.org/contract-creator/
2)    Ask the client to pay 25 percent, 50 percent or 100 percent up front upon signing the agreement. If the client is concerned that you might not deliver, offer to keep the payment in an escrow account or in your business bank account.

3)    In your negotiations with clients, find out what their payment policies are: Do they take 30 days to pay? My experience is that the larger the company, the longer it takes for invoices to be processed.
4)    Remember to add “Payable upon Receipt” to your invoices. Believe it or not, I left this off an Invoice and the client, a Fortune 500 company, held my invoice for three months before paying!
5)    Establish a billing schedule, have it in writing, and stick to it. Your case for getting paid is seriously weakened if you are billing six months after your project is finished!
6)    Maintain frequent contact with your client, advising them of progress made on the project, billable hours, etc. Remember, out of sight is out of mind.
7)    Try to work only for companies that can afford to pay you. Research potential employers beforehand. If possible contact other contract employees to find out their experiences with the company. Check out the company. Freelancers rate their experiences at Freelancers Union’s Client Scoreboard (https://be.freelancersunion.org/client-scorecard/). Companies are ranked by: Provision to freelancers of a written contract; payment full and on-time; clarity of job description; timeliness of answering question; and payment at or above the market rate.
8)    With new clients, if you can’t get full or a significant payment up front, break the project into small pieces so you can bill them quickly. Do not do any further work until you have received the first payment.
9)    If possible, arrange for payment through PayPal or another electronic service. PayPal bills are easy for the client to process. PayPal keeps statements of all transactions and allows you to send regular reminders to the client. They do, however, charge for their service.
10) Avoid working for clients who: insist on free samples of your work; keep trying to renegotiate your fee; won’t pay until you the project is complete; or are vague about their goals and objectives. Nitpickers are notorious non-payers.