All great info! Definitely plan to go the Paypal route and have a payment policy in place. Thanks!

I just looked at my agreement and realized I do not have a late payment policy in place however, this is my wording regarding payments:

Payment for services rendered is expected in full at the agreed upon time. There will be a 7 day grace period for payment. In the event any third parties are employed to collect any outstanding monies owed by “CLIENT”, “CLIENT” agrees to pay reasonable collection costs, including attorney fees, whether or not litigation has commenced, and all costs of litigation incurred.

I'd suggest adding an actual monetary amount to your policy - otherwise, it's too arbitrary if the time comes to charge one and the client may balk...

I've actually just updated my own policy to read:

Invoices are due on net 14 terms and are payable via Paypal plus 3.5%.
Invoices not reconciled within 15 days incur a $XX or 5% of balance, whichever is greater, late payment penalty.
Invoices not reconciled within 30 days incur an additional $XX or 10% of balance, whichever is greater, per month until reconciled.
Please feel free to contact us with any questions or concerns regarding your invoice or payment.

Because I realized it did NOTHING to protect me on really large invoices and didn't really cover post-30 accurately enough to be legitmately enforceable...one of those 'duh!' moments

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I was reading on another topic and I come across this link and I thought it may be of interest.
It just shows how careful you have to be in keeping copies of sent emails containing completed work.

Regards,
Vicky

Sorry, link to previous message (19) is not working for me. In case it not working for everyone it is about a freelance web-designer/graphic designer who did some work for an international client all went well until a few months later the client came back to the web-designer for some extra work to be added to the original project but would not pay for it and not alone that but reversed his payment through paypal - he origionaly payed with credit card through paypal - so now the web-designer was out of pocket. Paypal are working with the freelancer worker to refund the moneys, this is not a negative on paypal but just be careful when accepting credit card payments via paypal.

If someone could help me in advising me on how to get the link to work I will post it up again. I orginally used the "Go Advanced" reply button typed in my message, highlighted "this link" clicked the hyperlink button and pasted the link on to the relevant line, but it does not work.


Regards,
Vicky.

Not to worry, I fixed it for you
You did everything right but maybe ended up with a small typo...nothing major!
Thanks for posting this, I had read this article as well - it's a shame the freelancer got taken advantage of like that. Happens to the best of us.

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I've actually just changed my payment policies. This is the first time in all of my 7 years of business that I've been having problems with late payments.

All clients provide their credit card information (it's included right in my agreement for new clients) and via my new merchant account, their Visa, MasterCard or Amex is debited automatically (by me) on the 1st of each month.

I have a $40 NSF check policy in place and had to institute that for the very first time in my business' history too, just before Christmas. It's been a bit trying and frustrating.

It's been a tough go for some of my real estate clients during this slump in the industry. But I've cut loose those that can't pay - except for one that fits my "ideal" client profile. He's a broker/owner and is fantastic to work with. We've set him up on the new monthly automatic credit card debit program so I don't forsee any problems in the future.

Cheers,
Pam

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I do charge a late fee after 30 days. If it gets to 60 days, then I send them to a collection agency. I have this stated in the contract. I have not had to go this route and maybe this is because those clients who fear this don't sign (not a complaint either).

I also utilize PayPal and appreciate the link from post #19 I believe regarding the client disputing his charges. I have since transferred the money to my bank account.

I have a payment by check option, but invoice all of my clients through PayPal. They just pay me via the PayPal invoice. I have one client who submits a check payment through PayPal.

Probably should incorporate a NSF check policy.

Thanks for this thread.

those are some great informations, thank you all so much for sharing. I look forward to posting some helpful pointers to the forum.

Originally Posted by triciakos

I also utilize PayPal and appreciate the link from post #19 I believe regarding the client disputing his charges. I have since transferred the money to my bank account.

Hate to break it to you but transferring the money to your bank account does not guarantee that a client can't retract their payment and remove the money from your Paypal account, and particularly a credit card payment - but any payment...if you've already deposited the funds and a payment reversal comes through Paypal puts a hold on your account for that amount, until the situation is resolved (ie - either they find in the payer's favor and refund the money to them, or they find in your favor and allow you to keep your monies previously rec'd thus lifting the hold on your account.)

AND because our work is not a tangible item there is even more difficulty in proving 'delivery' because there is no tracking number, no postal service receipt - just an invoice with tracked hours and projects.

I had a client who taught writing classes - there were payment policies all over the website and throughout the signup process plus in the email the students rec'd after paying. One girl didn't make it to the class (no fault of my client's) and she asked for her money back. The policy was that she had chosen to miss the class, so she had forfeited her funds. She took it up with Paypal and her credit card company and unbelievably they found in the student's favor - even though she'd missed the class (admitted to us and them that she'd missed the class for whatever reason) and we sent proof of policy etc, to Paypal.

I also recently had another client pay me via Paypal with an account that was set up with a closed bank account, an oversight on her part...she just had forgotten to update her account. But I had already accepted the funds and deposited to my account. Her BANK issued a reversal and then she realized what had happend and paid me again with the correct account - but I had a hold on my Paypal account until I'd gotten the money back into my account to go against the hold amount. It was a real pain to say the least....the worst part? Paypal acted like I had done something wrong and kept insisting that I needed to show proof that I'd 'sent the item to the buyer' (like we were on eBay or something!) I kept explaining to them that it was the *client's* mistake in paying from a defunct account - they basically didn't hear a word I said....it only ever got resolved when the funds had been put back to the client's previous bank but in the meantime I had to deal with numerous emails and back-and-forths from Paypal.

Just something to be aware of.

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Thanks everyone for sharing all this information. I'm going to make a few changes on my contract. I've not had any problems yet but now I'll be prepared if a similar situation were to happen.

We haven't officially launched our business yet but right now we have as our policy is payment is due within 7 days after Invoice is issued, a late payment charge of 10% will be added after 14 days and every 7 days thereafter, unless a payment plan is agreed upon via email between us and the client. Comments on this policy? I'm pretty new at this...

I was super excited about my new client, but now they're getting me in a slump.

And AFTER the fact, I realize I have no late payment penalties listed in my service agreement. (Live and LEARN)

It's now been close to 45 days and after several e-mail and unreturned phonecalls, I still do not have a check. I'm more frustrated at the lack of communication on my client's part than I am about the late payment

It's under $100, so I don't think it's worth pursuing in court.

Are there any other alternatives I can resort to? My husband says I should show up at their office to say "hello, where's my check?"

I was really hoping this would be a repeat-project client, but if this is the example of their communication habits, I don't think I can agree to do another project for them even if they ask...

it's sad...

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Yikes, 45 days for less than $100?? That's pretty awful on their part.
Have you called them directly?

Definitely time to add a late payment policy to your contracts, and consider taking a deposit on all new accounts.

Sorry to hear about this

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I'm bumping this for all of the newbies that are joining lately. I too took on a client and later noticed that I didn't have a late payment policy in place.. thats what I get for drafting the agreement without letting my attorney (hubby) look over it. I am revising it STAT. Luckily I received my first payment for her, in full and on time.

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