Business

Steps to Take if You’re a Freelancer with Unpaid Invoices

As a freelancer, it’s of utmost importance that you get paid for the work you do because your own bills don’t stop coming. You still need to pay for your gas and electricity, even when your debtors aren’t paying the invoices you send them. Unfortunately, unpaid invoices happen to every freelancer at least once. That doesn’t mean it doesn’t suck! In this article, we talk about the steps you can take to make sure there’s less chance of having unpaid invoices and what to do when it does inevitably happen. 

Have a paper trail of your agreements

Often, young freelancers make the mistake of not writing down their agreements. It might be fun to do a project for your mom’s work colleague, but it will be less fun if that person is late with paying or doesn’t hold their end of the bargain. Make sure you always have a paper agreement you can fall back on when things go south. Make sure the contract states the sum of the payment, the payment term, and other obligations. Of course, make sure your contract gets signed by the other party! 

Ask for a down payment for big jobs

You won’t go bankrupt if someone doesn’t pay $100. But if it’s a thousand dollars or more… you might get in trouble with your own liquidity. After all, you need money to run your business and pay your own bills. If you work on big jobs that take up a considerable amount of your time, it can be a good idea to ask for a down payment. It’s a sign of good faith and trust for both parties. This is especially a good idea if you work for a client for the first time and don’t know how strict they are with paying their invoices yet. 

Call your debtor immediately if you notice an unpaid invoice

Even with a lot of precautions, it’s still possible to notice an unpaid invoice. Bummer! But if it happens to you, that doesn’t always mean your client willfully ignored you. Sometimes something went wrong or they forgot … That’s why we recommend you to always call your client immediately to discuss the issue. Often, they’ll fix it straight away.

But if you can’t reach your debtor or your email bounces, you can assume they’re ignoring you or they don’t have any money to pay you. Then it’s time to take the next step: hire a collection agency that specializes in freelance incasso (Dutch: incassobureau inschakelen zzp). They can put an incasso lawyer on the case, who can try to sue them or seize their assets. They’ll work their hardest to get your money back! 

Unfortunately, there are some so-called “incasso cowboys” in the field, that give the whole field a bad reputation. Make sure to always check the Google Reviews of the agency you want to work with. It’s also a good idea to ask what their success rate is. Also, take a look at their payment plans; do you pay a flat fee or do they work with ‘no cure no pay incasso’, which means you only have to pay when they’re successful in retrieving your money?

We hope you always get paid in time – and if not, that a collection agency is able to retrieve your money quickly! 

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