Freelancers’ Guide to Getting Paid—on Time

From the Wall Street Journal | July 14, 2009

By DIANA MIDDLETON

To
get paid, freelance workers may have to become collections
agents-especially now. As some companies struggle to pay full-time
employees, freelance invoices can get easier to ignore.

Seventy-seven
percent of members of Freelancers Union, which has 120,000 members
nationwide, have had clients that didn't pay at least once, says Sara
Horowitz, executive director. Worse yet, more companies are trying to
renegotiate lower prices with freelancers after work has been
delivered, says Gary Swart, chief executive of oDesk, a
freelance-management Web site that acts as a liaison between
freelancers and clients.

"Collecting payment is a big issue that's been compounded by the economy," Mr. Swart says. Here's how to get your payment.

Getty Images

Get over the embarrassment.
Don't be uncomfortable with asking about money-everyone works with the
expectation of getting paid. If you worry you are being a pest, try
blaming a phantom accountant, says Tory Johnson, chief executive for
Women For Hire and author of "Will Work From Home: Earn Cash Without
the Commute." She suggests saying "your accountant" is pestering you
for your pay stub for tax reasons.

Deal directly with payroll.
If you're constantly getting the runaround from your main contact, cut
out the middle man and ask to talk with payroll. That way, you
eliminate tensions with your manager and can deal directly with the
person who administers payment.

Withhold work, if you can.
Just like a cellphone provider drops your service after months of
unpaid bills, it is acceptable to withhold projects when you are not
getting paid in a timely fashion, says Ms. Johnson. To soften the blow,
tell the client you are still continuing work, but won't deliver
projects until payment is received.

Offer the company some flexibility.
Offer to come up with a bi-weekly payment plan, for example. If the
company is local, offer to go to the office to pick up your check.
Face-to-face meetings are harder to ignore.

Consider adding late fees to your contract, or a prepayment clause.
Some freelancers opt to include late fees in contracts, Ms. Johnson
says. You could also ask to get part of the payment in advance. But
beware of appearing too demanding, especially if you don't have a
comfortable relationship with the client. In this market, you might be
skipped over for another freelancer deemed lower maintenance.

Consider working with freelance-liaison firms. At Guru.com,
clients put money in escrow; it is released to the freelancer upon a
project's completion. On oDesk, employers can track freelancers' work
via screen grabs of work in progress. It enhances freelancers'
credibility and confirms billing hours, oDesk's Mr. Swart says.

Sue the company in small claims court.
Before heading to small claims court, send a demand letter by certified
mail to the employer. Search the Web for examples of the form and tone.
Give a deadline for payment, and say that you will file suit if the
deadline passes.

Write to Diana Middleton at diana.middleton@wsj.com