Late payments are becoming a real headache. Just this month, three clients pushed their payments past 30 days.
It’s got me thinking about whether my payment terms are too lenient or if I’m just not being clear enough right from the start.
Chasing late payments is annoying. I prefer clients who pay on time. Life’s too short for that hassle.
Payment terms need to be front and center from day one. I learned this the hard way after chasing too many late payments.
Here’s what actually works:
- Put payment terms in your contract AND on every invoice
- Ask for a deposit upfront, usually 25-50%
- Set shorter payment windows like NET 15 instead of NET 30
- Send invoices immediately when work is done
The deposit part is huge. Clients who pay something upfront are way more likely to pay the rest on time. It also weeds out the ones who were never planning to pay anyway.
I also started being more direct about money during initial conversations. If someone seems sketchy about discussing payment terms, that’s usually a red flag.
I just ask for half up front now.
Three clients past 30 days is rough. I dealt with this same problem a couple years back.
What changed everything for me was adding late fees. Not huge ones, just 1.5% per month after the due date. Most people pay on time when they see that line on the invoice.
I also started calling clients around day 20 instead of waiting until they were actually late. Just a quick “hey, wanted to check if you received the invoice” call. Catches a lot of issues early.
Another thing that helped was switching to weekly invoicing instead of monthly. Smaller amounts get paid faster in my experience. People seem less likely to ignore a $500 invoice versus a $2000 one.
The clients who still pay late after all this usually aren’t worth keeping anyway.
Adjust your payment terms to require payment before work begins or break larger jobs into phases with payments due before starting the next phase.
I eliminated NET 30 terms. Now it’s either upfront payment for smaller jobs or 50% down with the remainder due at set milestones. No exceptions.
Clients who push back on upfront payments are often the ones who would pay late anyway. This approach helps filter out the difficult ones right from the start.
Once you get accustomed to receiving payment upfront, you won’t want to chase money again.
Stop taking on clients who seem difficult about money during your first conversation. Those types usually cause payment problems later.
I charge a rush fee if someone needs their invoice paid after the normal due date passes. Works better than just asking nicely.
Also try sending invoices before you finish the work completely. When people see the bill coming, they prepare for it instead of being surprised.