The 5 warning signs of deadbeat clients

Recently I’ve been in a discussion with colleagues about how to deal with clients who don’t pay your invoices on time (or at all). It’s an upsetting topic. You’ve worked with someone on a project, you’ve established what you thought was a decent relationship, you’ve given them good work, on time — and then they ignore your bills.

Of course, in some cases it’s just a matter of reminding them, or asking the right person, and you get your check in the mail. But other times, weeks roll by, emails go unanswered, and you reach the inescapable conclusion that you’ve been “stood up.”

I’ve discovered that people react in all sort of ways to a client’s deliberate failure to pay up. In my case, I feel insulted. I feel angry. And I feel even angrier when I realize that I now have to invest time trying to collect my money.

I’ve faced up to the fact that it’s much easier simply to avoid taking on clients who are likely to be deadbeats. In my experience, in every instance where a client has received my bill but tried to avoid paying, the warning signs were there from the very beginning. At least one, and usually two, of the following factors were in play:

• Inexperience. The client is a sole proprietor with no previous business experience (they had always worked in a  corporate environment where they never had to think about expenses). They have no office manager, no bookkeeper, no budget, and no established system for paying clients.
• Cluelessness. The client offers a touchy-feely service like “positive visualization.” For whatever reason, I’ve had two personal growth coaches attempt to ignore my bills for web content writing — even though they were using my content on their sites.
• Delusions. The client is a technology startup. When I quoted my rates, they tried to talk me into a fancy title and ownership of some unspecified “share” of their “sure-fire” company.
• Shady business. There is very little evidence of the people, or their company, online (by Googling names and email addresses). It’s as if they’d landed from Mars. When I check the state government’s online public records of business licenses and registered corporations, there is no record of the company, or the records connect back to an off-shore corporation.
• Lack of authority. The person who is contracting with me to do work for a large, legitimate company  is himself (or herself) a contractor rather than a company employee. When my bill is ignored, they’re sympathetic but have no authority to enforce my contract with the company or get me paid.

In the more than 20 years that I’ve been a contractor and freelance writer, I’ve encountered all of these situations. Yes, you should always have a contract or a memorandum of understanding with a client, but only if you are prepared to go to small claims court (for a small invoice) or hire a lawyer (for a large invoice) to get your money. (I am, and I have. But that’s another story.)

I’ve learned the hard way that it’s better just to pick the right clients in the first place.