I saw a freelancer post that a client sent them a "We're not paying invoices due to [the economic environment]" notice. I won't link to it due to my no shaming policy. The responses from freelancers to this are fairly predictable. I have some slightly different ones:
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This is not a refusal to pay. It *says* it is a refusal to pay, in the same sense that I might *say* that I need
$X to do some particular thing, but these are steps in a negotiation rather than absolute positions. You can't take it at 100% face value.2 replies 4 retweets 113 likesShow this thread -
The right response to this is probably "I have received your letter. The invoice is good. I demand payment by the date on the invoice, under the terms of our contract." Most people sending that demand *will likely be paid.*
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This behavior is so common there is a word for it among consultancies. It is "slow rolling." If the client is in a cash flow crunch, and you can imagine a lot of clients in cash flow crunch right now, slow rolling allows them to prioritize accounts receivable & buys time.
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Many freelancers are extremely offended by slow rolling. As a former consultant, I get it, but you can't afford to think like an employee when you're running a business. You should do what all the "real" businesses did when they got that letter; treat it as a nullity and move on.
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There are backstopping options here. It is important for businesses to understand that credit risk *is a very real thing* and that there are, at this moment, some companies which have been extended trade credit by firms like yours which will not be able to service that debt.
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Your chief recourse to that is charging more, because you bake credit risk into the expenses of your business, and if a client goes out of business on you between invoicing and receiving payment you grimace a bit, chalk it up to credit losses, and move on with your life.
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But a client simply not paying today is, well, Tuesday. Stop work, send letter, escalate as per your usual collection efforts. If you do not want to deal with this hassle, that is a reasonable preference. You will enjoy being an employee more than you will running a business.
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Psst if this is a material amount of money for your firm you *may* want to look at your business insurance policy because this is conceivably a covered risk given the circumstances, though expect that to also be a negotiation between you and your insurance carrier.
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Replying to @patio11
You have a better shot at getting the money from the client than the insurance carrier.
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Contingent on the client being a going concern I agree with this.
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