If life were perfect people would pay their bills on time. Sadly this is rarely the case and many a designer has been in the situation of what to do with an unpaid invoice.
We all love hearing “The cheques in the mail”, “Just waiting for some money to come in”, “Can I pay some now, and some later?”, “I will have the money to you on friday, I promise”, “Can you resend your invoice again, I seem to have misplaced it” or even “The dog ate my emails” but to try and avoid a little stress in your life, with the help of my good friend Liam Gibbs from Two Flat Whites, I have put together a few simple steps to hopefully help you get paid on time.

Contract or No contract?

Personally I much prefer a good old aussie hand shake to a long and convoluted contract, unfortunately, this is not the proper way to do business and no designer starting off should rely on a handshake alone. If you already have a contract for you, that’s great, if not, ask around, maybe someone in the family knows a solicitor who can help you out for a minimal cost to get you a basic contract template that you can reuse over and over again. Having a contract shows a few things

• That you are professional
• It points out the client what the payment terms and conditions are among other things and what work you will be undertaking as well as the presumed cost
• It helps if you have to take legal action further down the track.
  Some people like to get a percentage upfront before they start the work, usually 40-50% this is a good idea, but its personal choice in the end.

When to invoice?
Some of your clientele may be long standing who you have agreed to bill monthly for any work you do, if this is a new client and the final work has been done, the final pdf has been sent to print or the website has been finished and uploaded it’s a good idea to send an invoice within a week

The email can be as simple as the following

Once again, in an ideal world this will be paid on time without fuss, but what if it isn’t?

What do to next?

So your invoice hasn’t been paid and you are wondering whether they are stalling, too lazy to lift a finger or they were unhappy with the work.

If for example your invoice/contract stated payment terms of 14 days and they are a week late, then it’s a good idea to send a simple reminder

A good reason for the emailing is to keep a history of your dealings with the client, and also so they can see it, its also good proof of what is going on as the “dog ate my email” wont cut it, and offcourse it is good to remind them as they may actually have overlooked it. Remember also that some companies have 30 day payment cycles where they only pay bills at the end or start of a month, regardless, you don’t have to operate like this.

What do to next, I’ve had enough!
Ok so now the client still hasn’t paid and you are very frustrated about what to do, it might be time to call them if you haven’t already to politely ask if everything is ok (if you can get a hold of them). Sometimes you cant get them or don’t have the time, so sending a final email notice can be your last chance to let them know that they still owe you money and are not going to get away with out paying.

Basically what you are now saying to them, is that if they don’t pay, you will be contacting a debt collections/recovery/mercantile agency who will taking over recovering the debt for you.

What is a Collection/ Mercantile Agency and where can I find one and how do they recover the money?

You can find a Mercantile Agency in the phone book & most will charge a commission for the monies recovered. Never pay a Mercantile Agency a yearly fee, their incentive is to collect the overdue monies. And if they do this, both you & the agency win. Legal Fees may be charged if Legal Action is pursued, this is standard but keep in mind that you need to be confident that your ex customer has the means to pay.

Otherwise, you are simply throwing good money after bad. The commission rate for the Mercantile Agency to charge should be between 5% to 15%, depending on the size & number of debts you are referring to the Mercantile Agency.

The most important thing to remember is that the information you obtain from your customer at the beginning of the relationship is crucial. The more information you gather will help you get paid at the end if the relationship turns pear shaped. Also, regular communication can help resolve a good relationship turning bad.

DANGER WILL ROBINSON! WARNING! WARNING! WARNING!
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