Independent contractors and freelancers rely on timely payments on their invoices. This ensures they have a steady cash flow and sustain business operations without financial hiccups. In the US and all over the world, contractors work in good faith. This means they trust the client will release all payments by the due date. But when the payment still hasn’t arrived, contractors don’t know how to ask for payment from clients in the US without straining their relationship.
In this blog, we will discuss the payment overdue problems independent contractors and freelancers face. We will simplify the daunting task of not knowing how to ask for payment from clients. We will show you how to do late payment follow-up and still have a respectful client relationship. When this blog ends, you will confidently and respectfully stand up to claim your dues.
Contents of this blog:
- When to Ask for Payment from Clients?
- How to Ask for Payment from Clients?
- Email Templates for Asking for Payment
- How to Ask for Payment Over the Phone?
- Tools and Software to Facilitate Payments
- Handling Unpaid Invoices and Overdue Payments
- How NOT to Ask for Payment from Clients
- Final Tips and Considerations
- Streamline international payments with Asanify
- Conclusion
- Frequently Asked Questions (FAQs)
Suggested Read: Foreign Independent Contractors: Guide to Best Practices
When to Ask for Payment from Clients?
If talking about money and asking for fair compensation makes people jittery, not knowing when and how to ask for payment from clients is another major setback for contractors.
Timing is everything when it comes to asking for payments. You have to send professional invoice reminders and payment requests strategically to get paid on time.
Here are the best trade practices for contractors to send client payment reminder emails:
- Before the Due Date: Sending a payment reminder a few days before the due date is like a polite nudge, helping the client remember that your payment due date is upcoming and they need to act on it. This nudge helps to jog your client’s memory, so they can review and activate the payment process in advance and pay once your job is done.
- On the Due Date: Sending a professional invoice reminder on the due date is a mandatory official act, it reiterates the importance of timely payment, highlights your professionalism, and conveys your expectation of getting paid when you have fulfilled your part of the agreement and rendered your services in time.
- After the Due Date: If the payment is overdue, it’s essential to send late payment follow-ups consistently but respectfully, increasing the urgency with each subsequent reminder. The client may have been indisposed to make the payment on time due to some reason. If the client has not given you clarity on the payment schedule, you are in the right to send payment reminders and demand an update on the final payment date.
We have a few payment request email templates lined up for you in the following segments. Feel free to use the templates and learn how to write a payment reminder that is compatible with your communication style and language.
How to Ask for Payment from Clients in the US?
Information is fine, but now comes the hard time. We will share the 3Ps – they are time-tested communicative strategies every contractor must follow when it comes to asking for payment. Make a habit of following these 3 strategies for your day-to-day communication as well. Remember the three golden Ps: Professional, Polite, and Persistence.
- Professional: Maintain a professional tone in all your communications. This sets the right expectations conveying that you take your business seriously.
- Polite: You can be a regular polite person, but stressful situations like delayed payment can shake your polite demeanor. That’s why you have to exercise intentional politeness in all your communication relevant to overdue payments. You have to put your statements and expectations across firmly but politely, holding onto your composure goes a long way in keeping the interaction cordial when the stressful situations have passed.
- Persistent: Persistence is key when payments are delayed. Either you are not getting clarity on the expected payment date or the client is communicating vaguely or they are being dismissive of your requests. Whatever feedback you are getting from the other end, be assured that you are in the right to continue late payment follow-ups. Being persistent shows that you are serious about receiving your payment and that you hold the client responsible for paying you for the services they asked for, without being overly aggressive.
Following the 3Ps with clear communication is how you ask for payment from clients in the US and everywhere else. Ensure that your clients are fully aware of your payment terms before beginning any project.
Suggested Read: Contractor Management Checklist
Email Templates for Asking for Payment
You have reached the part where we are sharing free templates you can use in your finance kit. We suggest you modify templates from time to time depending on your stage of client communication. Read this blog and understand the best practices of paying contractors in the US. With this knowledge and our free templates, you can write confident follow-up emails to any client.
The First Invoice Email
The first email is a general friendly reminder. You are sending this mail to your client when you are in the last stages of concluding your term’s services. Here’s a template for the first invoice:
Reminder on the Due Date
This is a mandatory reminder you have to send if your payment has not already been cleared. Get the client payment reminder template here:
Follow-Up Emails for Overdue Payments
If the payment is overdue for 30 days, it’s important to increase the urgency and frequency of your reminders. But always be professional, even if you are writing assertive emails. Download our basic template and customize it to suit your tone.
Remember to always send your client an email confirming you have received the payment, whenever you get it. Be just as courteous to acknowledge the payment, whether you get it before the due date or 2 months late.
How to Ask for Payment Over the Phone?
Payment request email templates are a good strategy to contact clients regularly but once in a while, you have to connect with clients on a human level. That’s when you need to make a phone call and talk to the client or the representative responsible for making the payment.
What happens during phone calls is the client often reveals if they are in some form of problem that led to the payment delay. Candid communications over a call can often ease doubts, help get clarity on the situation, and come up with another strategy.
So if you decide to call the client, keep these points in mind:
- Be Prepared: Have all the relevant information close at hand when you take the call- starting with your contract agreement payment terms, your work delivery details, invoice number, amount, due date, and mode of payment at your fingertips.
- Stay Professional: Explain the situation and remind them that payment is urgent because your business relies on timely payments and a missed payment is disruptive to your work. Communicate with a calm and professional tone, even if a lump sum is overdue.
- Be Direct: Politely but firmly, get on call, and clearly state that you’re calling to remind them the payment is due. Giving the benefit of doubt to your client will help you take the edge off your voice and communicate with the client with an empathic ear.
Suggested read: What is Payroll Software? Everything You Need To Know
Tools and Software to Facilitate Payments
Managing every aspect of your business may feel overwhelming at times, so you need to work with work and invoice management software that can handle the processes for you. You can streamline the payment process and ensure timely payments with these invoicing platforms popular with international contractors and small to medium business communities:
Asanify: Asanify is G2 certified, the best user-friendly contractor management software in the world right now. So you can easily keep track of all your client work on our platform, send them automated reminders, and generate quick invoices. It’s best for you when your client is also on Asanify because then they can pay you in your currency of choice – whether you want to be paid in USD, CAD or any other currency. It’s practically impossible to miss due date payments when you are on Asanify HRMS.
PayPal: It’s one of the oldest wallets that’s still active today. Paypal is supported by banks internationally which makes it compatible for generating invoices and payment exchanges.
Payoneer: Simple user-friendly payment method to receive international payments supported by most banks internationally.
Deel: It’s a great invoice-generating platform for contractors working with multiple clients, offering automated reminders and seamless payments.
These tools simplify the payment process with automated reminders and task tracking. Business simplification tools like Asanify support your professional image signaling your dedication to make the client collaboration easier.
Handling Unpaid Invoices and Overdue Payments From Clients in the US
If a client still doesn’t pay despite your payment reminders, take the following steps:
- Send a Final Demand Letter: Outline the terms you will take if the client fails to release the unpaid invoices. Give them a time frame for them to revert or process the invoice and state that you will activate the next steps against them if they fail to comply within the time frame.
- Consider a Payment Plan: If the client seems to be able to fulfill the payment terms laid out in the contract agreement, then you can offer them a more friendly payment plan. If they are in genuine financial or administrative troubles, this plan can help them release the payment slowly but surely. For example, you can ask the client to break the payment into 3 parts, payable over the course of 45 days, and mention the exact dates of the 1st, 2nd, and 3rd slots of payment.
- Engage a Collection Agency: If all amicable plan turns to dust, then you can employ the services of legally registered collection agencies. You’ll need to provide them with the relevant information about the client and share document proof of your invoice, dates relevant to your work submissions, the number of times you’ve done a late payment follow up, and the money the client owes you. In exchange for a small percentage, they can extract the money for you.
- Pursue Legal Action: As a last resort, seek legal advice and consider taking legal action to recover your payment. Hire a lawyer to initiate a notice against the client.
How NOT to Ask for Payment from Clients in the US?
It’s natural to be frustrated and feel anxious when a payment hasn’t been cleared past the due date. But never let your frustration and anxiety reach your client through unpleasant outbursts. Here are a few things you must never do when communicating with clients for a late payment follow-up:
1. Using Aggressive Language
Offense is surely not the best defense when asking for payment from clients. Avoid using harsh and aggressive language to convey your displeasure at the way the client is handling things. Nobody likes harsh words, specially the people who owe you money.
2. Publicly Shaming the Client
Never air your grievances on social media or other public forums. Deal with this problem by being mature and considerate by putting yourself in your client’s shoes. They may be a day away from releasing the payment or have no intention of paying at all – how can you be sure which stage your client is at? Even then, if you take to social media to shame a client, it may send a negative message to other potential employers.
3. Threatening Legal Action Prematurely
Have a payment request email template at the ready, and keep sending late payment follow-up – sometimes by calling in person. After you have exhausted all the known strategies of getting paid, shared alternate payment schedules that are client-friendly and now you just don’t know how to ask for payment from the client in the US, you can look into launching a legal action. But be sure you are at your last straws.
Any of these severe actions will create a negative perception and potentially ruin your chances of receiving payment, getting future work from the client or even getting a favorable word-of-mouth promotion from them.
Final Tips and Considerations For Clients in the US
Now you have a fair idea of how to ask for payment from clients, but we want to give you even more self-preserving strategies so that you can avoid being stuck in a payment delay limbo.
Set Clear Payment Terms Upfront:
Just because you are not an employer doesn’t mean you don’t need to know the administrative know-how of managing remote contractors. In fact, you must research the best industry practices and learn how each side of the coin operates.
While an employer expects you to show up professionally, you also need to be aware of how the best employers handle their global contractors, so that after a few days of work you can assess correctly whether you are working with a genuine client.
Since you are here, it’s fair to assume you are in a challenging spot with overdue payment. That’s why we suggest you refer to Asanify’s blog to understand the fair trade practices of paying independent contractors.
Firstly, have a boilerplate contract ready with you at all times. Before you decide to onboard a new client, have a clear outline of the financial details in the contract agreement and make sure the client understands and agrees with your expectations. The important features of a transparent financial agreement are:
- Service rates
- Due date of payment,
- Frequency and mode of payment,
- Preferred invoicing and payment channels like Asanify
- Late fee charges
With these parameters in place, you can alter the details with every client and their preferences, ensuring that the final agreement is mutually decisive, compliant, and therefore binding.
Stay Professional and Composed
You must hold onto your professional composure when client payment reminders are unresponsive. Sometimes banking and software issues can be a problem for clients, especially if they are hiring international contractors. So you can suggest an easy and efficient contractor-payment software like Asanify, which helps employers surpass banking hurdles and pay contractors on time in their preferred currency.
Use Multiple Channels To Ask For Payment in the US
If emails aren’t working, try calling the client or sending a message via another platform. There are far too many social media platforms at your service to limit your contact to just emails. However, make sure that you are utterly worn out from sending them emails and not getting any reply from them. If your client is responsive to your emails but they are somehow not able to process the payment, hold onto your patience, keep the communication civil, and send regular follow late payment follow up over mail.
Alternate Payment Schedule To Suggest Clients in the US
A great practice for contractors and freelancers is to start a project only when they get paid 50% in advance payment and they completely hand over their deliverables after the payment of the rest 50% on the due date.
If you are unsure whether you are at a stage where you will get clients who will agree to these terms, you can stipulate an alternative payment approach where the clients pay you after every deliverable milestone.
Suppose you are creating a website for a client and it’s a 6-step process till you finish, you can tie delivery of every step with a payment. So, the client has to pay you after you share every finished milestone.
Suggested Read: How To Manage Contractor Payroll?
Streamline International Payments with Asanify
Contractors often find it difficult to keep track of client payments, specially when they are working with multiple clients in different time zones. Employers also face the same problem, with the bonus difficulty of paying various international contractors in their preferred currencies.
Asanify’s user-friendly HRMS takes care of both the contractor’s and employer’s problems in exchange for a small monthly subscription. Let’s take a tour of Asanify’s user experiences.
Here’s how Asanify’s HRMS helps global contractors:
- Unlimited client onboarding
- Organized tracking of every client’s tasks
- Ready to use Invoice templates
- Facility to automate payment reminder
- Receive payment in any preferred currency
- Language support
How Asanify helps employers all over the world:
- Manage and onboard global contractors in 200 countries
- End-to-end employee and contractor management
- Monitor every contractor’s task progress
- Automate regular check-ins and minimize manual work by 50%
- Get automated period reminders for major payment dates
- Pay contractors timely in 100+ currencies
- Save 4% on FX when paying global contractors
In a nutshell, Asanify’s global contractor management system empowers businesses, from solo independent contractors to SMEs, with a swift and streamlined management experience while working remotely. With Asanify’s HRMS every contractor can get paid on time without any institutional hold-ups and save money without incurring hefty exchange rates.
Conclusion
We hope you now have all the strategies you need to ask for payment from a client. Just remember to communicate professionally, politely, and persistently in regular intervals. The must-haves in your finance kit are a payment request email template, a client payment reminder template, and a professional invoice reminder template – these will help you talk to your clients confidently and be less stressed in dire conditions.
Just remember, even if a client pays late they will remember your attitude during the delay. If you lose your composure during a difficult time, it will be hard for you to repair the relationship when things smooth out. So be organized and professional at all times, you’ll save yourself a lot of time and earn positive grace in client relationships.
Frequently Asked Questions (FAQ)
The best practice for contractors is to set a payment schedule agreement with the client at the onset of the project so that the payment expectations are laid out. But you should take charge and send the professional invoice reminder immediately upon completing the project, to remind the client that you have fulfilled your part of the agreement ie providing service.
If a client ignores your emails, follow up with polite and professional client payment reminders and escalate to a phone call if needed. Be polite but persistent.
The best practice would be to send atleast two professional invoice reminders before calling your client. Have payment request email templates ready to send to clients once every week if they are ignoring your payment reminders past the due date. Keep following up once they make the payment.
Clients are busy running their businesses and probably dealing with multiple employees and contractors like you. Your payment may get delayed due to cash flow issues, administrative errors, or maybe they simply forgot. So be considerate and communicate with empathy if your payment has been delayed. Clear communication is the key to asking for payment from clients.
If you had outlined this provision in your contract at the beginning and the client had agreed to it before delegating the project, then you can charge a late fee for overdue payment. But you need to have exact late fee charges laid out in the contract as well – the client should be aware of the exact amount or the percentage you will charge if they miss a payment.
Knowing how to write a payment reminder with important invoice details is essential for every payment follow-up email. You must include the service you have provided, invoice number, agreed due date, amount, mode of payment instructions, and a polite reminder of the payment terms agreed in the contract.
A late payment follow-up via phone call is appropriate if the client has been non-responsive to your emails and delaying your payment at least weeks past the due date. A phone call with a human touch can be more direct and often resolves the issue faster.
Setting up clear terms of payment is a good start to setting payment expectations with a new client. A few days before you are set to hand over your deliverables, you can send a friendly reminder email notify that your work is almost done and you will generate the invoice soon. Follow up your professional invoice reminder with a couple of late payment follow-up emails till the due date.
However, even if the client is well-meaning and wants to pay on time they may get delayed due to several factors which may not be in their control. If a client is genuinely professional and misses a payment once or twice due to some issues, understand their inconvenience. But if a client consistently delays payments then it is a mark of their reimbursement process. Look out for red flags like this and safeguard your business by avoiding work with such clients.
Think about a collection agency as an extreme step and only as a last resort after you have contacted the client multiple times and sent them late payment follow-up reminders. If they have repeatedly ignored the client payment reminders and not reverted to you with a meaningful course of action, it may be time to take extreme measures.
Try to get the payment processed with calm and professional communications and follow up till a month past the due date. If they are still no show, engage collection agencies to help you recover debts in exchange for a fee.
If all else fails, you can sue your clients for non-compliance to agreed terms and hire a lawyer to take legal action against them. However, the process will be long and it will be a recurring expense for you. If you decide to take legal action, ensure you have all the relevant documents to support your case.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
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