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Every once in a while there may come a time when payments just don't seem to arrive when you most expect them. And worse, it sometimes comes when bills are due for your internet or electricity which is vital for your work. Should you then get the phone and ring your clients every 30 minutes to say they are late? Or approach them like you are begging for what you have worked for?

If you are that frustrated and unprepared, you might just end up doing both, but you won't have to if you follow these suggestions on how to deal with late payments. This will not only reduce undue stress but save you your business and that precious client.

Payment Guideline

Setting the right expectation when it comes to payment is essential in establishing a harmonious client-provider relationship. Before you start work, make sure that all gray areas are clarified especially when it comes to payment and payment conditions. Set the proper expectation when it comes to invoicing your customers and when you expect them to complete the payment. It's the surest way to keep both parties accountable for the deliverable (you) and payments (your client). 

Provide an incentive for early payment

Cash flow is very important. And if you want to keep that cash flowing smoothly, one way to encourage your clients to pay your invoice early is to incentivize them for early or advance payments. It doesn't necessarily mean lowering your rates, but think of creative ways that you can offer. Whether it's a bonus service or extra credits, or even a cash discount (not my personal recommendation though). Giving them an extra reason to avoid late payments is a plus for your sanity and your business.

Require Advance Payment

For the past 10+ years that I've been working online, advance payment has been my business norm when it comes to collecting payments from clients. This does not only help me ensure that I'm not scammed, but it also helps me budget the money received to allocate for my team or subcontractors if I will ever need an extra hand.

Setup auto-debit or recurring charges

If you send out invoice to your clients on a regular basis, (weekly, monthly) you may consider offering auto debit or recurring charges. Paypal already offers this option if you have a business plan. The good thing with this scheme is it frees your client from doing the weekly or monthly obligation to remit payment.

50-50 option

Aside from offering one-time payment with a discount, I also try to provide a payment scheme where they are able to pay half of the actual fee and the remaining half is paid after the output or deliverable is completed.

Your Responsibility

In the first half of what we've discussed, we've talked more about what you can impose on your clients on how to deal with late payments. In this second part, we'll discuss your own personal obligation so that even if there are late payments from your clients, you still have a stress-free freelancing.


Paypal is by far one of the most convenient ways of invoicing and receiving payment. And one good thing you'll like with Paypal is its ability to send out automated reminders. I've had a few experiences where a client had to get back to me and ask for the bill 2 weeks after I've actually sent out the invoice. And guess what, email piled up so fast that he was not able to read it. So don't be afraid to send out reminders. This way, you will be able to ensure that your clients are well-advised. Don't assume things, be certain.

If you are using third party tools for your invoicing and payment tracking like SimplyBill or Freshbooks take advantage of its reminder feature.

The first two that I've mentioned above takes more of the client responsibility towards you. However, this stressful situation of receiving late payments can also be mitigated if you do the following:

Pay on Time

If you are the type of person who is inclined to procrastinate, you have a higher possibility of getting more frustrated and bogged by late payment scenarios. It's funny, but it's true! Before you demand your clients from paying on time, you may want to check if you are actually paying on time yourself! Fix your payments too! Pay on time! You simply can't pass the blame to your clients' delayed payment of your unpaid bill. Sometimes we are tempted to delay payment ourselves. LaToya Irby has outlined pretty clearly the advantages of paying on time in her article 7 Reasons to Make Your Credit Card Payment on Time.


The talk gets really boring to many when the discussion turns to budgeting. No wonder there are only a few who can withstand a financial crisis and still live like a king because only a few really know budgeting and why it's important! Budgeting has its hidden treasures that only those who stick to it can actually discover. It's not how many clients or how big your salary that matters, but it's how you handle what you have. If you don't know how to budget, then it's time to learn. There are many budgeting software available that can get you started. Mint, Buxfer and Quicken are just a few of them, but even your ordinary excel or word can actually help you create a functional budget.


Saving is perhaps is one of the most overused and neglected terms that people only recall when they are in “dire need”. But when everything is working smoothly, nobody cares to at least get a piggy bank and drop a few coins for future or emergency use. You should know by now that as freelancer, your line of work and the financial aspect of being a freelancer has an equal uncertainty that goes with it. You simply can't rely on your projects to last and so is the cash flow. There is a myriad of reasons to save and if you have time you may check this article from About.com that provides the Top Seven Reasons to Save

Bottom Line

The late payment scenario is avoidable and trivial if you are prepared. Understand that emergencies always come every now and then and unforeseen circumstances can happen that even the most prompt client can't anticipate. If your client delays in payment, try to understand his/her case. Ensure that your terms and payment options are clear and understood by both parties. Payment delays don't have to be a cause of a strained relationship. I hope you've learned some useful tips on how to deal with late payments.