Last month, the Freelancer’s Union launched a neat website – WorldsLongestInvoice.com – which totals unpaid invoices from freelancers all over the world. The current total unpaid invoices is just a couple thousand dollars away from $16,000,000 and the site has only been live for a little more than week!
Dozens of writers have added their names to the list. For example:
- Lanelle: $300 for Content Writing for Web Design
- Shirley T: $2,500 for Grant Writing
- David S.: $3,400 for Technical Writing
- Martin: $50,000 for articles sold to other publications without permission
- Melanie: $600 for copywriting
There are even a few people on the list who have over $50,000 in unpaid invoices. I can’t imagine being owed that much money.
Unpaid invoices is just one of the many risks of freelancing. Unless the client pays you 100% of the project upfront, there’s always some risk that the invoice will go unpaid. Size doesn’t matter – corporations and individuals alike can fail to pay. Sometimes even an established client-customer relationship doesn’t protect you from unpaid invoices.
You can minimize the risk of nonpaying clients, even if you don’t ask for full payment upfront. Break the payments into installments based on the work or the timeline. For example, get three payments for a three-week project. Or you can time payments to fall in line with the dates of specific deliverables. Getting paid in installments gives you a better opportunity to cut your losses. If the client misses a payment, stop working until they pay you. And cancel the project completely if they don't pay you within a certain amount of time.
Reading a few of the stories on The World’s Largest Invoice Tumblr (where you can submit your own story) it becomes obvious that contracts don’t matter with unethical clients. Contracts are necessary to define the terms of the work, but don’t assume that because the deal has been signed that the client won’t walk away. A signed contract is still necessary, especially if you decide to take legal action against a nonpaying client; the client can’t claim ignorance if there’s a signed agreement.
The worst part of unpaid invoices – besides not receiving the money you need for survival – is that pursuing clients for payment can be time-consuming and costly. Calling and sending emails takes up time that you could be working on paying projects. Suing in small claims court is an option, but requires upfront filing fees and things get complex when the client lives in another state. Even a court judgment won’t force some deadbeats to pay up. You may have to go a step further and ask the court for a wage garnishment or bank levy. You could hire a collection agency, but they’ll definitely take a cut of anything they collect from you. Unfortunately, it’s sometimes cheaper – and less stressful – to take it as a loss and move on.
Do you still have unpaid client invoices?