Don’t buy yourself a can of WhoopAss – name-calling will only get their back up. If you really want to recover your debt you need to appeal to your client’s sense of reason first.

Don’t buy yourself a can of WhoopAss – name-calling will only get their back up. If you really want to recover your debt you need to appeal to your client’s sense of reason first.

Step 1: Talk to your client and find out why they are unhappy. You might discover your outstanding invoice is part of a bigger problem, such as files arriving late to the printer (and needing to be fixed).

Step 2: Offer to address any issues.

Step 3: Send your client a formal letter requesting urgent payment then deliver it in person if possible. Letters – and emails for that matter – can easily get ‘lost’ in the post.

Step 4: Still no joy? Send a second letter, advising the client that you will forward all details to a debt collection agency if payment is not made. Clients tend to sit up and take notice when words like Baycorp start to crop up in conversations.

Step 5: Turn the bad debt over to a debt collection agency. These are the experts on this sort of thing and they can work on a commission or fee basis.

OR

Lodge a claim with the Disputes Tribunal (the new Small Claims Tribunal) if the invoice total is less than $7,500 (or $12,000 if both parties agree). The Disputes Tribunal is a lot faster and cheaper than the standard court system. It’s less formal, no lawyers, and a ‘referee’ rather than a judge.

Writing off any debt over $1,000 is a definite no-no since it only encourages your client to screw over the next freelancer they come across.

Even the most hardened freelancer or consultant can find it hard to spot a bad debtor before they become one. Your best solution is to always manage expectations – and create a ‘paper trail’ – so that clients are clear which work is to be done, for how much and when. Most bad debts arise from jobs that grow beyond the original brief and take clients by surprise when much bigger invoices arrive in the post.

For even more great tips on how to get ahead as a freelance or consultant, grab a copy of The Pond booklet Ready to Be Your Own Boss?

• Courtesy of The Pond