I was recently asked, on an e-mail list for editors, what my techniques are for avoiding getting stiffed by clients and what to do when a client tries to get out of paying me. I'm happy to share my advice here:
How to Avoid Getting Stiffed and Avoid Cash-Flow Problems - Check out new-to-you clients in as many venues as you can think of: profession-related e-mail lists, the client's web site, the Better Business Bureau (or an organization in your nation with a similar function), searches on the Internet. ... I've even asked a corporation unfamiliar to me (a printing press) to provide names and phone numbers for three businesses that I could contact to verify that the corporation made timely payments to its vendors. Don't be deterred by a potential client's disbelief that you want to check them out.
- Get everything about the proposed project in writing before starting work. Include details such as how much you'll be paid, when you'll be paid, how you'll be paid, and how often you'll be paid during the project.
- As part of the project agreement, require a down payment on your fee of anywhere from 33% to 100%. The size of your down payment will depend on your negotiating skills and the client's flexibility. Also, make sure that this down payment clears your bank account before you begin work.
- Before you begin work, make sure that you have full contact details for the client: personal name, corporate name (if applicable), mailing address, at least one e-mail address, phone number, fax number, web-site address, Twitter handle, Facebook page address, etc. If I were to be working with a university student, I would want full contact info for the student's thesis supervisor, plus a letter on the supervisor's departmental letterhead stating that my working with the student is allowed under university rules. If I'm going to be working with a professor or staff member of a comparable institution, I ferret out contact details for that person's boss.
- Don't work for only one or two clients. Always keep marketing your services, even when you think you have "enough" clients, so that you can keep clients coming in (old clients sometimes fold or disappear) and cash flowing. Take on both large and small projects to help balance cash flow.
How to Deal with a Slow PayerThis is good advice from my colleague Dick Margulis for dealing with slow-paying clients.
Payment-Collection Techniques of Last ResortUse these techniques to get your money when you don't care if you lose the client:
- Claim copyright interest in work you have done but have not been paid for, as explained on an editors' e-mail list by Rich Adin:
I write something along the following lines:
I understand that sometimes there are snags with getting the first invoice paid to a new vendor but that, unfortunately, creates a problem as regards your ability to use my work. The problem is that I have a copyright interest in my work until I am paid for my work. I would hate to put a kink in your production process, but as a publisher, I am sure you can understand that it is impossible for me to simply waive my copyright interest.
In the meantime, here is the completed second batch of manuscript. Let me remind you that I retain a copyright interest in my work until paid. I look forward to receiving payment for the first batch shortly so I can waive my copyright interest, and I look forward to timely payment for the second batch so that my copyright interest is negated.
Sending something like that often gets quick payment.
- Hold work over the client's head until you get paid, as I explained in a post to a freelancers' e-mail list:
There was some major stiffing going on years ago when medical publisher A, a former employer of mine, was acquired by medical publisher B, which has since been acquired by medical publisher C.
I was the freelance production editor for a journal published by publisher A. Publisher B asked me to continue on, and I did. But payments got later and later, until things were at the 90-plus-days-late point for multiple invoices. I had periodically discussed the matter with absolutely everyone possible at publisher B. No joy; I was told that like every other freelancer of publisher A's who was brought along to publisher B, my being paid would have to await vetting of my contract by publisher B's lawyers.
Finally, I decided I'd had enough and was willing—nay, deliriously happy—to lose publisher B as a client. I contacted the editor-in-chief of the journal, an MD who was not [an employee of publisher B], and told him what was going on. I told him that I'd enjoyed working with him and his journal for several years but now could no longer afford to do so, especially because the new publisher would not speed up payment. He offered to pay me out of his own pocket. I thanked him but turned him down; I had contacted him not to get money out of him but because I owed him the courtesy of not just dropping out of sight without an explanation. I then contacted the journal's managing editor and let her know that because I'd had absolutely no success with her or her supervisors, I'd informed the editor-in-chief about the situation. She gasped and choked and sounded as if she were going to die on the spot. She told me how unprofessional my actions were; I responded calmly that publisher B was unprofessional in not paying its contractors. She allowed as how she could see what could be done to expedite payment. I said that I was ceasing work on the journal—and would not return any of its materials—until all of the money I was owed arrived in the form of a cashable check.
I had my money within 3 business days, via FedEx. I then packed up all 400 pounds of in-process materials and archived materials and shipped it to publisher B—on publisher B's FedEx account. It was a joy to watch the FedEx driver log in and load every single one of those boxes ... and to think about how large publisher B's FedEx bill would be for that one giant shipment.
Helpful Books, Articles, and Audio-Conference CDsHere are links to books, articles, and audio CDs on getting paid promptly.
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If you're a self-employed editorial professional, you've found that résumés and business cards aren't enough anymore to keep your work schedule full. Want to know what tools work today and how to use them? Come talk with me, on Saturday, October 2, 2010, on day 2 of the fifth annual 
