It’s time for me to invoice a client for a project I am working on, and I have not received payment for the previous project yet. How should I handle this? —MM
First, stop all work for this client immediately. Second, you need to have a business heart-to-heart with your client.
But beforehand, do a little self-examination.
Clients will only develop the expectations and habits that we allow them to. Consider how you began working with this client.
Did you have an expectation for a commitment? Or did you just accept project work because you feel you need to offer your services piecemeal in order to entice clients? Do you believe yourself 100% that your service and value stand on their own merits and you deserve to be paid?
Did you clearly communicate to the client your expectations and business policies both verbally and in writing?
Were you confident, direct and assertive in your billing and collection practices? Or did you “train” the client that it is not a priority to pay you on time by not addressing the first late payment immediately, or being vague, indirect or just plain wishy-washy?
Often, we ourselves have as much to do with an issue as the client we at first think is the evil culprit. And recognizing the hand we had in creating the problem has as much to do with the solution as anything else. This is the only way you can learn from it, fix where you went wrong and then institute those improvements in your policies, practices and communications so that you and your clients can work together more happily and cooperatively from that point forward.
Now, about that “coming to Jesus” talk with your client. Be friendly. Be professional. Be polite. There’s no need to be upset, out of control or rude (remember, more than likely, your own past practices may have contributed to the issue at hand). But do be clear and assertive.
Remind them that there is a past due amount. Explain that it is your policy to discontinue work until all past due amounts are paid (which should also be added to your contract if it’s not already). Let them know that you expect payment immediately, and get their commitment to pay you before the end of the day.
If that is not forthcoming, you can have a little relational conversation with them, but do make it clear that no further work will be done until the funds are received in full for the previously invoiced work as well as the current invoice. Reiterate that your end of the bargain was doing the work, and their end is to pay on time. Remind them of whatever late fees or penalties they will incur by not paying immediately (and then follow-through).
Document this conversation and their explanations, and follow it up with an email summarizing what they’ve stated they are going to do and what you have agreed to.
If the payment doesn’t show, be prepared to follow through with whatever you’ve informed them will occur (e.g., work stoppage, work product held in lien, turned over to attorney for collections, etc.).
On another note, this is yet another case study for not working with clients on a pay-as-you-go basis. If you never ask for the commitment, you won’t ever get it. To get it, all you have to do is simply decide that you will only work with retainer clients who are ready to commit to an ongoing relationship and who pay the monthly fee upfront.
You’d be amazed at how well “ask and ye shall receive” works.
If you settle for sporadic, occasional project work with clients who aren’t invested in any kind of business relationship, that’s what exactly what you’ll continue to get. 😉