Getting Paid


BY ROBERT W. BLY | What’s the secret to collecting unpaid bills from clients and editors? Act fast.


As bills age, your chances of getting paid fade fast, writes Charlotte Lemoine in an article in Channel Financial Magazine.


Research from the Commercial Law League of America shows that 93.4 percent of delinquent debts a month old or less are collected. By comparison, only 57 percent of delinquent debts 6 months old are collected, and only 25 percent of delinquent debts a year old are paid.


Call all large-dollar accounts immediately after the account becomes 30 days old, advises Lemoine. Especially if your clients are large corporations and major publishers, your invoice could be tied up in the company’s account system. Lemoine suggests finding an ally in the company who can help “walk” your bill through the system to get you paid.


To collect, be polite but persistent. Use a series of letters and phone calls to remind clients your the bill is past-due and they should pay it now.


The first contact is a letter. In this first letter, never get angry or accuse the client of deliberately cheating you. Give them the benefit of the doubt.


The first letter is written as a reminder and makes the assumption that the client meant to pay you but simply forgot. This prods him to pay without making him feel guilty.


Your goal is not to put the client in a compromising position, or to prove that you are right and he is wrong, but simply to get the check he owes you.


Another way to get bills paid faster is to either give a small discount for prompt payment (e.g., “deduct $X if paid within 10 days”) or charge the legal interest rate for overdue bills (e.g., “2-1/2% service charge for bills 30 days or more past due”).


Sometimes, even after the intensive collection effort, you still don’t get paid. This means that the client either can’t or doesn’t intend to pay your bill.


Now is the time to write a strong letter saying that if you do not receive payment within 2 weeks, you will have no choice but to take legal action to collect the bill. This means court.


Send this letter certified mail, return receipt requested, to prove that the client received it. If you don’t hear back, wait the 2 weeks, then send a second letter stating the same thing.


If you still don’t hear, hire a collection agency or attorney. Take the client to court. The more paperwork you have — a signed contract, a purchase order, correspondence, source materials, copies of any printed pieces the client produced using your copy — the better your chances of collection.


Here are some additional tip for making sure you get paid:

* Get it in writing. Get a contract, signed letter of agreement, or even a fax or e-mail confirmation for every project in writing before you begin the work.

* Get it up front. Get a retainer up front, especially from new clients. A typical advance is one-third of the total fee. You bill the client for the second third after submitting your first draft. The final payment is billed upon completion.

* Say what happens “if.” Written agreements should spell out what happens if the client cancels the project, delays the project, changes the scope of work, or isn’t satisfied. Spell out kill fees, cancellation policies, and billing procedures for these situations.

* Photocopy the client’s check. Always make a photocopy of the first check you receive from any client. This ensures that you have a record of their business bank account, making it easier to collect any judgment you obtain against them.

* Accept credit cards. Get merchant status with American Express and MasterCard. If a client’s billing system makes it difficult to issue a retainer check, bill the advance payment to their credit card. Or get their credit card information as a back-up to the promise of “we’ll send you a check.” The understanding is if you don’t get the check, you bill the credit card.

* Do progress payments. Get payments after major milestones. As suggested, one-third, one-third, one-third is a popular arrangement. Book publishers typically pay half the advance up front, the balance upon manuscript acceptance. For smaller projects, I often get a $1,000 retainer up front, then bill the remainder upon completion.

* Break big projects into several smaller projects. Have a separate price quote for each piece, even if you agree to a volume discount. This way, if you don’t get paid, you can conduct a separate collection effort on each piece rather than the total amount. The dollar amounts for each item are likely to be small enough to let you use small claims court, which doesn’t require an expensive attorney.


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BOB BLY is the author of 40 books including the just-published Secrets of a Freelance Writer: Revised Second Edition (Henry Hold & Co.). For a free catalog of Bob’s books, tapes, and reports for writers, contact: Bob Bly, 22 E. Quackenbush Avenue, Dumont, NJ 07628, phone 201-385-1220, fax 201-385-1138, email: