The worst thing about not getting paid after working on a project for someone is seeing the person yield the dividends. The next worst thing is them turning around and saying they do not have the money to pay YOU.
Next time before you are reduced to becoming a debt collector try this:
Sign an agreement
Do not accept to do work in an informal manner. Write everything down on paper. Lay out the scope of the project and the payment terms-on paper-because putting things down on paper and making it formal will make it easier for you and the customer as everything is defined. Include the payment terms and the dates of payment as well as late payment penalties (make sure you actually implement your late payment charges).
When expectations are clear on both sides have the paper signed. They sign. You sign. So when there is a dispute…you have proof.
Research the Customer
Ask around from other people if you can about the person’s payment habits. If it is a big company, ask about their payment policy and procedures so that you can plan around that and not be caught off guard. Also, find out who should get the invoice as sometimes the person who placed the order is not the same person who will pay the invoice.
Do get the correct mailing addresses and the information that must appear on the invoice for it to be paid and not be told later about “missing” information. For some companies that small bit of missing information can delay payment.
Ask for a deposit
You can ask and many people will give you a percentage of the total invoice. It is also wise to ask for a deposit for large orders, custom orders, and for new customers with limited or a questionable payment history.
Promptly send bills
Do not wait with sending a bill. As soon as the work is done prepare the invoice and send it. And remember what your client agreed to on paper. Did you agreed on paper that payment is due in 7, 14 or 30 days? Whatever the number of days, the sooner the customer receives the bill the sooner you will be paid.
Send a reminder a day after the due date and call the customer a week after that if payment hasn’t been received. The key here is to have a routine procedure and to follow it diligently as the longer you delay this procedure and the older a debt becomes-the harder it will be for you to get your payment.
Go to the premises if your initial friendly call to remind them of the payment being due doesn’t produce results. Begin by asking if they got your invoice and if everything was satisfactory with the product or service. If the answers to both questions are yes, then ask when payment will be made.
Be firm and polite and do not worry about losing the customer. As long as you have delivered what you promised to your customer and are polite the majority of your customers won’t mind this debt collection visit. If all goes well they should give you a new date of payment which you should follow up promptly.