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Freelancers’ Guide to Getting Paid—on Time

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.

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.

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