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Independent Contractors: Get Paid On Time

How long should I give a client to pay me for a freelance assignment? Is one month too short? Should I write "due in 30 days" on the first invoice? I don't want to seem so pushy that they don't use me again, but on the other hand, I don't want to get stiffed out of money or have to wait months and months for payment. —P.P., Los Angeles

There is a tendency for employers to devalue work from freelance contractors or view it as somehow less important than similar work that is completed in-house. Don't magnify that tendency by coming across tentatively, worrying about being "pushy," or being undisciplined in your billing.

"Set out what you expect from your clients in writing. Just as they expect a certain level of professionalism from you, such as adherence to deadlines, you should expect the same respectful treatment from them," says Rohit Shukla, president of Larta Institute, a Los Angeles-based commercialization services company that works with many small businesses and self-employed individuals.

The majority of payment problems for self-employed individuals stem from miscommunications, says Gene Fairbrother of MBA Consulting in Dallas. "It is your responsibility to be the communicator. When it comes to problems with customers, the best defense is a good offense, and the best offense is a clearly written agreement."

He suggests that you put a notice on every invoice that says, "Payment due upon receipt." That means you expect payment within 10 days. "Living in the real world, there are exceptions. It is common for you to work within your customer's payment cycle, so long as it is reasonable," Fairbrother says.

contractors' collection calendar

Some companies pay invoices at the end of the month or have other regular payment dates. As long as you can live with that timing and the client stays within its parameters, everything will work out fine. But if you find yourself working for a new client or waiting for long stretches for payment from a repeat client, here are Fairbrother's suggestions for setting deadlines:

• If you're not paid within 15 days, call the customer and find out when the bill will be paid.

• If you're not paid within 30 days, send a letter restating your payment terms and ask for a check to be sent immediately.

• If you haven't received a check within 40 days, call the customer on the phone and find out what the problem is.

• If you're still waiting after 45 days, send a registered letter making final demand for payment and notifying them that if payment is not received in 10 days you will start a collections action.

• If day 55 rolls around and you still have no money, start a collections action through the small claims court, a collection agency, or your attorney.

Most clients won't let things that get that far. The ones to worry about are clients who "cry the blues, saying there was a problem when you know there wasn't," Fairbrother says. Once you experience a payment problem with a client, steer clear of working for them again unless you get a good explanation and consider them a particularly promising source of income.

"In this day and age, freelancing is how people are pursuing alternative careers," Shukla says. "Virtual companies in particular are all about using freelance work."

Be organized and professional in your dealings with clients and they will appreciate the value they get from you. Develop a loyal cadre of clients who know they can call on you regularly and deal with you straightforwardly. "They will come to cherish the opportunity of working with you without facing the overhead burdens they have if they hire another employee," Shukla says.

Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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