I saw this thread recently posted on Hacker News. “We’re not paying invoices due to the pandemic” – How to handle these.
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What shocked me is what Patrick McKenzie (@patio11) suggested:
“The right response is probably ‘I have received your letter. The invoice is good. I demand payment by the date on the invoice, under the terms of our contract'”
Wow. Powerful words. Mildly threatenting.
Here’s what I would suggest…
1. I demand payment under the terms of our agreement
I really don’t want to ever receive letter demanding anything. It’s unpleasant. It feels threatening. Why would you send such a missive to your client or customer?
As a consultant or freelancer, you should understand that you are *NOT* an employee. As such you are not protected by the law in the way payroll employees are. You should understand that the first ones who get paid are payroll, next would be rent & utilities, and lastly would be contractors or vendors.
What’s a better alternative. First keep good communication. Let your client know we are all struggling, and we can work through this together.
I typically send a message with subject “a gentle reminder: invoice xyz due on date abc”. Encourage any kind of communication, and keep it open. Don’t be afraid to remind your customer again in two weeks. If you don’t hear back, ask again just to make sure the messages are getting through.
Patience wins the day.
2. I’ve got bills to pay, this is serious
Talking from your own point of view, is not helpful. What’s more it encourages your customer to also see things from a selfish vantage point. Instead speak from their point of view. Explain that you understand where they are coming from, and let’s work together to get a portion of the bill paid. 50%, 25%, 10%. Any amount is good because it means an action has been taken. It confirms the invoice is valid.
As far as those bills go. If you’re a freelancer, and running out of money, you’re doing it wrong. When you freelance there is overhead, for health insurance, vacation & sick leave etc. If you are not making the rates that cover these costs, it doesn’t make sense to be freelance in the first place. In fact it means you’re not billing right, packaging right and selling right.
Related: When clients don’t pay
3. Remember this is a test for everyone
The current pandemic is a challenge for everyone. Small and large businesses, freelancers, deli, laundry owners, restaurants & music venues. I can go one. Please keep this in mind before you go off and send some email to your non-paying client, that you will later regret.
Keep your perspective, take a deep breath, and be the bigger man. Take the high road, and keep your center. We will all get through this together.
Related: Why do people leave consulting?