This is a common question which comes up here on the forums. I thought I might start a thread so that some of the newbies could learn what to expect from clients who are non-payers.

I define non-payers as those who are:

• slow to pay
• pay partially
• try to change the payment plan midway despite a clearly defined contract payment plan
• those who do not pay at all

While I wish that we could have clients who abide by the payment terms in the contract, there will be clients that will become problem payers.

I'd like to hear from some of the seasoned VAs...how have you handled non-payers and what advice could you give to new VAs just starting out?

Janine

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Write that Winning RFP The Job of Ur VA Dreams http://bit.ly/ZJfatV

Advice: ALWAYS get paid up front. If someone is beating you to death in regards to your price, won't give you a deposit. LET THEM GO!

I have had a few clients "stiff" me so IT HAPPENS!

Also, always have at bare minimum a payment agreement. I prefer a contract for all work too.

I also have had some slow payers. In those cases I always send reminders that I have a late fee policy. I have switched to a pre-pay policy and that seems to be bringing them around.

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Dani
http://www.danimagestro.com

Great post!

I'm currently in the process of setting up my new REVA and I would definitely like to see how some of the "seasoned" VAs handle these issues.

Get the payment up front if possible. Any project only clients that I have must give me payment in advance or half up front and balance before deliverable is sent.

Also for retainer clients, mine pay a month ahead. And for my slow payers, I send a notice once the payment is due and if I do not receive anything then I send a second notice that until payment is received work will cease immediately.

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Lee Drozak

I only do retainers which are paid in full up front. Within a few hours of the retainer being used up I advise the client by email. If a "top-up" is not received by direct deposit by the time the retainer is fully used, work ceases. I specialize in working with lawyers and am careful to research before taking on any new client and so far they play nicely. If they don't? Well .... and I'm not out of pocket at all.

Lynne

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The Wordpro Wizard
www.wordprowizard.com

I work only with lawyers, and used to allow a 30 day payment window. I assumed with lawyers, there would not be payment problems. HAHAHAHA. Like Lee, I now ask for half down, with the balance due upon the client's approval of the file. To assure that I get the final payment, I "lock" the file by password protecting it with Adobe, so that it can't be printed or signed/uploaded to the court for filing. Prior to doing so, I had a few lawyers thinking I would work up the paperwork "on spec" then if their client decided not to file, they didn't figure they needed to pay me. I had to find a way to make sure I never had that happen again. Locking the file works and is also fun when the non-payer complains that they can't print the file and I get to explain why.

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Virtual Bankruptcy Paralegal
www.bkprep4u.com

I've tried my best to set up my business in a way that avoids not getting paid on time (after many experiences with late, very late, or unreconciled payments due) - this means deposits from new clients against 6 months of timely payments, 50% payment up front on per-project contracts, and milestone payments on large or lengthy projects.

In the past when I was still learning how to handle the very difficult 'you owe me money' conversation with clients and realizing that I really, really didn't want to spend even one minute in my business chasing collections I put each of these policies in place.

Even with policies in place I've been in the position of sending a series of 'reminder' emails to clients who had not paid on time. I try to keep it as light as possible at this point and say something like "I'd really love to help you avoid another $XX late payment fee on your overdue invoice - when do you expect to be able to reconcile the balance due?"

In some cases those letters eventually became 'collections' letters that implied legal action and reminded the client that the late payment could impact the clients' credit rating. (This was the most effective in the end).

The thing about late payments is this - if the client is a great client, long term, and has always paid on time in the past then I have always tried to be as flexible and patient as possible. This can be a strain on the working relationship though as after a while resentment kicks in, especially if the client continues to ask (however sheepishly) for work.

I think it's important to have strong policies in place (including monetary penalties for late payment - just like your credit card or cel phone bil) and enforce them when you feel it is necessary or appropriate to do so. (I've levied late fees as high as $300 over a period of time on a single invoice.) I don't apologize for late fees, I just add them to the next invoice - the client knows it's a policy and ultimately expects it.

Giving some clients a little leeway with an invoice can be fine as long as the client is communicating with you about the situation, but don't let it get out of hand.

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Originally Posted by Tess

this means deposits from new clients against 6 months of timely payments, 50% payment up front on per-project contracts, and milestone payments on large or lengthy projects.

Tess, I am curious what you consider as a timely payments - is that for retainer clients? Second, do they ever have any issues with this policy? I would imagine that new clients would be more interested in some sort of a "trial" period first to see if you are a good match before committing to 6 months? Otherwise, I think it's a terrific policy that gives you some security and stability.

Sara

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Sara
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