Occasionally clients don’t pay. So how do you deal with it?
Once upon a time a graphic designer got hired to do some work for a client. He did the work. He didn’t get paid. The end.
Sound depressingly familiar? I bet it does.
If you work long enough in the design business and you will come across a client who won’t pay. You may be halfway through the work. You may be completely done with the work. You may even have given them a discounted rate. Doesn’t matter. It will happen. Possibly more than once. What matters most is how you deal with it. And how you learn from it.
When good clients go bad
I’ve spent half of my career self employed—about 9 years. In that time, I’ve had about 150 clients. The vast majority of the transactions worked out very well for both parties. I delivered strategy and design. They paid me. I rarely got burned. But people do get burned. I know firms who’ve been stuck with a $30,000 goose egg on their balance sheet once the work was done. Not a pretty sight. Sometimes I think the clients are shady from the get go. But in my experience—most of the time—you just caught a business in a time of financial trouble. And you aren’t the only person they are stiffing.
The client who wouldn’t pay
My story involved a client who gave every indication that payment wouldn’t be a problem. It was a firm I had done a decent amount of work for. I had given them a very good deal. About $15,000 in design, copywriting and project management fees for a website and print collateral system. On top of that, I had negotiated a great printing price for all the materials that came to about another $5,000.
Unlike my other clients who stiffed me, I made sure I had a downpayment on services. I had $5,000 in my pocket before I began doing any work. This was important. I tell all freelancers who work directly with businesses to ensure that they follow this practice. I don’t call it a deposit. I call it a level of commitment(I didn’t make that up. I think it’s a David Baker-ism).
It’s an important commitment. It’s a demonstration of trust. They take the risk that you will disappear with their cash. You take the risk that they will only pay you 1/3 to 1/2 of what you agreed upon. But half is better than nothing.
LESSON #1 : ALWAYS GET A PERCENTAGE UP FRONT
Once I was done with all of my design work. I sent all the files to the printer and final billed my client. Since I hadn’t done a lot of work with this printer before, they wouldn’t do the typical 30 day billing practice. I was running the printing fee through my business so I paid them the $5,000 for all the materials. I figured, I’ll just drop off all the collateral at the client, pick up my final check for printing and services and everything will be perfect. Right?
About two days later my bank informed me that the client’s $15,000 check had bounced. I was floored. I was also in deep trouble. Since their check bounced, my check to the printer would bounce as well (Yes, those were the days of no cash flow). I scrambled to transfer money from my savings to make sure my check to the printer didn’t bounce. It left me with about $500 in my checking account—total.
LESSON #2 : ALWAYS WAIT FOR THE CHECK TO CLEAR THE BANK
I frantically tried to get ahold of my client. Suddenly I couldn’t get ahold of the owner. He was out of the country. My other contact wasn’t at her desk—and wasn’t returning my calls. I was livid. While I was doing the work I had no problem communicating with my client. Now that there was a money problem, there was a communication problem too.
When I finally got ahold of my contact, she said there was a balance transfer issue and gave me a new check to deposit. She was not very apologetic. I was suspicious. Still, I kept things on an even keel. I deposited the second check.
At this point I was plotting various sorts of inappropriate (and illegal) forms of revenge. Visions of slashing car tires and breaking windows were flowing through my head. I felt foolish. Foolish for apparently misjudging the quality of my client. And foolish for paying for and delivering their materials. Not only was I getting stiffed for my $10,000 in fees, but I paid $5,000 of my own money for the print bill. I actually paid them to screw me.
LESSON #3 : DON’T PAY PEOPLE TO SCREW YOU.
LET THE CLIENT PAY THE PRINTER—DIRECT.
Now I was getting apologies. I really didn’t care. I wanted payment. Apparently they were having issues getting ahold of the owner. He was golfing in Ireland. Sounds nice. I’d like to golf in Ireland. Maybe I can one day—IF I GET MY FREAKING MONEY! Their new suggestion—wire transfer. Sure. Whatever you need to do. I got the numbers. Gave them to my bank. And you’ll never guess what happened.
Yep. Failed. The account numbers didn’t match up.
At this point you can imagine my frustration. I was ready for a scorched earth campaign. They can’t possibly be this incompetent, right? How stupid do they think I am? Thank God for Google. I looked up “clients who won’t pay” and found a lot of good advice—the most consistent message: keep your cool. I kept my cool and said, lets try this again. Give me new numbers. They did. It finally went through.
Payment complete. Fourth time’s the charm.
LESSON #4 : ALWAYS KEEP YOUR COOL
By the 3rd failed payment, I could have justified venting my anger and telling these guys to go #$%^ themselves. That would have felt good in the moment, but not gotten me any closer to my desired outcome—getting paid. Who knows what was going on with that company. It may have been a perfect storm of incompetence. It may have been dishonest behavior. It doesn’t really matter. What matters is getting paid.
It’s a tightrope act. Be too nice, and they will dismiss you as weak and keep putting you off. Be too angry and you’ll give them the emotional rationale to avoid or lash out at you. You may be just one of many people who they are delinquent in paying. Who do you think they’ll be more apt to pay first? The pushover? The angry asshole? Or the consistent and persistent one?
Be persistent. Be patient. Be direct. My story eventually worked out for the best. There are plenty of scenarios that haven’t. In summary:
1. Always get a percentage up front
2. Always wait for the check to clear the bank
3. Always let the client pay the printer direct
4. Always keep your cool
Happy hunting my designer friends. And remember, Reagan said it best:
“Trust, but verify.”
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