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What To Do If Your Freelance Client Refuses To Pay

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Unfortunately, many freelancers encounter clients who delay payment, ignore invoices, or simply refuse to pay altogether. If you haven’t navigated a situation like this yet, you likely will at some point in your freelancing career — and it’s important to be prepared.

If you search the internet for what to do if a client refuses to pay, you’ll find a lot of information about contracts. The basic concept is that if you make a client sign a contract, they’ll be legally obligated to pay you. Sounds perfect, right?

What most people forget is that contracts can only be enforced in court. So while the client may technically be obligated to pay you, they can still refuse — and your only option for getting paid will be heading to a courtroom or possibly working with a collections agency.

For most freelancers, it will be far more expensive, stressful, and time-consuming to pursue the payment than the payment itself is actually worth.

In my opinion, it’s better to be prepared and proactive so you can mitigate your risk and avoid these difficult situations in the first place.

Using a Contract

While it might not be realistic to enforce a contract in court, I still recommend using a contract on every project. Above all, contracts help set clear expectations and most clients will honor the contracts they sign since they are legally binding.

Most of the time, contracts will never need to be enforced, but if something goes wrong, both parties will know how to proceed.

Keep in mind that a contract is different than a proposal. Think of a proposal as an overview or summary of the project, including the scope of work, payment schedule, timeline, testimonials, etc. It’s your final sales pitch. A contract, on the other hand, is an extensive, legally-binding document containing terms and conditions.

Any legally-binding contract should be drafted by a lawyer. This can be quite expensive, but well worth it. The contract I use cost me over $1,500, but I’ve made the template available to you along with my 10-page proposal template for just $59.

Early in my freelancing career, I felt like I needed a contract, but wasn’t sure what terms to include. So, I stitched together bits and pieces of legal jargon I found around the web and asked my clients to sign it.

As you can imagine, this didn’t work well.

Cheap online contracts simply aren’t effective. My contract was often met with resistance and clients frequently asked for revisions. It didn’t make me look like a professional. That’s why using a professionally-drafted, legally-binding contract is so important.

The quality and effectiveness of your project proposal will determine whether you’ll win a new project or lose it.

If your client refuses to sign a contract, ask questions about why. Sometimes it could be specific terms and conditions they’re reacting to. But if they just don’t want to sign because they are hesitant to commit, this could be a red flag and you might consider avoiding this project and client.

Collect a down payment

The best way to make sure you get paid is to actually get paid. On every project, no matter how big or small, you should always collect a down payment. It could be 10%, 25%, 50%, or even 100%, but you need to get paid some amount of money before you start work.

Getting 50% down and 50% at the end might seem like the industry standard, but this might vary depending on the total cost of the project. You can also adjust this based on your personal comfort level and you can increase your required down payment as you gain more experience.

If the project cost is $5,000, a $2,500 down payment might be perfectly reasonable to a client. But if the project is $50,000? A $25,000 down payment might be met with some resistance. In this case, I’d suggest collecting 25% down, 50% in the middle, and 25% after work has been completed.

The best way to make sure you get paid is to actually get paid.

No matter what payment schedule I suggest for my projects, I always give my clients the option to pay 100% upfront in exchange for a 10% discount on the total cost of the project. I’ve been shocked at how well this has worked over the years, even with first-time clients.

I’ve had first-time clients pay up to $45,000 upfront to take advantage of the 10% discount. Of course, I did a great job scoping the work and earning their trust before presenting the proposal, but collecting 100% payment upfront is certainly possible.

This instantly eliminates all your risk and proves that the client trusts you before you even start work. That’s a huge incentive to do your absolute best work as quickly as possible for them!

Proposal Examples

Here are some screenshots of real proposals I’ve sent to clients and how I positioned the upfront payment against the standard payment breakdowns. As you can see they are all tailored to the project, but still generally follow the same pattern. Four out of these five clients chose to pay upfront!

Set Clear Expectations

If you’re curious what the asterisks (*) next to the timeline estimate mean, it’s accompanied by text that reads, “Contingent upon timely feedback from [client name].” When it comes to timelines on fixed-price projects, I always provide a two-week range and specify that it’s contingent upon timely feedback from the client.

That way if they decide to go on vacation halfway through the project or take 3 weeks to respond to my emails, they can’t blame me for “delaying the project”.

This proposal template is extremely effective and has taken me years to perfect. I still use it to this day. That’s why I made it available for purchase here along with my legally-binding Master Services Agreement (MSA).

No matter how you present your proposal, it’s critical that you set clear payment terms in advance to avoid any confusion with the client. The more clear the expectations are upfront, the less likely it is you’ll deal with non-paying clients.

The way a potential client reacts to this conversation is a great indicator of how they’ll behave after you start work. If the conversation goes smoothly, you can expect a smooth project. If the conversation is met with a lot of resistance, you might have difficulty collecting payment later on.

Send Invoices on Time

No matter what, make sure you send your invoices on time and set reasonable due dates. Most clients won’t pay (or won’t be able to pay) the same day. Many clients use net payment terms, which means they could need 7 days, 15 days, 30 days, 45 days, 60 days, or even 90 days to pay your invoice.

This is normal, especially when working with larger companies. The larger the company, the longer they may need to pay you. Make sure you discuss this with the client in advance so you aren’t surprised!

Follow Up After Sending Invoices

Before you get too worried that your client isn’t going to pay, follow up with them. Clients are busy. They usually have their own business to run and your project may not be part of their normal day-to-day responsibilities.

Bottom line? They can forget!

It’s perfectly normal and acceptable to remind a client to pay their invoice. Sometimes you’ll receive a courtesy email from the client letting you know that they received the invoice and will pay soon.

Most invoicing software such as QuickBooks Online can be configured to send automatic reminders as well.

But if you don’t hear anything from them for a few days, send a reminder email politely asking if they’ve received the invoice yet. This will usually be enough to prompt payment.

If you still don’t hear anything for 3-5 business days, follow up again and more sternly remind them that payment is required to continue work. After the final invoice, let them know you can’t deliver the final files until they pay their final invoice.

If email isn’t working, try calling the client and asking when they’re planning to pay you. When appropriate, you can send a written letter as well.

Handling Extreme Scenarios

I’ve found myself in more than one extreme situation where my clients were outright refusing to pay me after I completed the work. So I took their new websites down and put placeholder messages up saying they were refusing to pay and provided a link to PayPal so they could pay their invoice.

On both occasions, the invoices were paid within the hour.

On another occasion, I signed a 3-month retainer agreement with a repeat client. They paid the first month in advance. After the month was over, the situation turned toxic. The client was yelling at me over the phone, belittling me, bullying me, and just behaving unprofessionally.

I told them the contract was terminated effective immediately and that they are not obligated to make any additional payments, but they were not entitled to any refunds either. This was met with even more hostility, but it didn’t matter. I got paid for my month of work, I delivered the files I created, I blocked their emails and phone numbers, and we parted ways.

On another occasion, a client was refusing to pay me because they thought the work was taking too long and that I wasn’t making their project a priority. I got too comfortable with the client and over-shared details about my other projects.

Pro Tip: Resist the urge to overshare with clients you’re getting along with. If things go wrong, they can hold this against you. Stay professional and don’t share details about your other projects, clients, or commitments.

Fortunately, they did eventually pay me, but the relationship had severely deteriorated.

If you’re providing digital files to a client, make sure you don’t deliver the final files until AFTER they pay your final invoice. This is effective leverage as it’s a strong incentive to get clients to pay. Again, these are extreme scenarios, but real scenarios nonetheless.

If All Else Fails…

If following up and escalating the situation with the client doesn’t work, you can work with a collections agency to recover lost payments, but be prepared to pay a % of the missed payment upon successful recovery of funds.

In many cases, the best option will be to simply walk away from the client and the project rather than take legal action. Yes, you might lose money, but these situations can be extremely stressful. It’s usually not worth continuing to carry the weight of stress and anxiety these situations often bring.

Use the situation as a learning lesson and watch out for those red flags next time you’re about to work with a new client.

Last updated on June 18th, 2023

About Matt Olpinski
I've been freelancing since 2009 and have worked with over 100+ clients including some of the biggest brands in the world. I later started my own company Matthew’s Design Co. and now teaches 50,000+ freelancers each year how to succeed through his personal blog, newsletter, and community for freelancers.