Protect Yourself from Nonpaying Clients

There’s nothing more draining than chasing down payments for projects you delivered on time, months ago. The best way to avoiding doing so is vetting clients carefully from the get-go, to make sure they can actually pay you. But, as experienced freelancers know, this is more of an art than a science.

In “How to Avoid Deadbeat Clients and Get Troubled Ones to Pay,” our most recent post for the AARP’s Work Reimagined site, we offer tips from seasoned solo professionals and experts on how to minimize the time you spend acting as a collection agency.

It’s hard to turn down work in the feast-or-famine world of freelancing–or to operate from a position of mistrust. When in doubt about a client, I have a suggestion: Either ask for a deposit up front or set up an account on one of the major freelancer’s sites where clients must put money to pay you in escrow prior to the job. (Elance is one I’m familiar with, but there are several other reputable ones.) Have the client hire you through one of these sites. These middlemen will typically take a cut in your earnings, but you may find you have more peace of mind if you have some up-front assurance that you’ll get paid.

While the greater exposure we have to distant prospects on the web can be a blessing in some cases, it means we need to be more vigilant, too. Recently, I had an experience where a very small potential client who found me online lined me up for a project. The prospect asked for my federal tax ID number on a W-9 form, which I provided. Some of the other agreements this prospect then asked me to sign were very poorly written and started raising questions in my mind. When I was later asked if I wanted to receive future payments by direct deposit (and asked for my bank account information), I said I’d prefer to receive a check in the mail. The job suddenly evaporated. This may have had nothing to do with my refusal to provide a bank account number, but I had to wonder if I was being targeted in a scam. Now I regret having provided my tax ID and hope I have not become entangled with someone who plans to misuse it.

I would never back away from working with clients I don’t know. However, I’m now considering setting up an account on one of the freelance sites simply to avoid providing my tax ID until I’ve built a working relationship with a client who hasn’t been referred by someone I know. These sites typically act as the employer, so they’re the ones who receive your personal information. While you do sacrifice some earnings by involving a middleman, you are often free to move off of these sites to work with a client privately after a set period, such as a year. That should be long enough to know if a client is on the up and up.




Growing Your Business, Your Back Office , , ,
Powered by Disqus

Comments are closed.