How To Handle — and Avoid — Late Payments as a Solo PR Pro

Living the Life

How To Handle — and Avoid — Late Payments as a Solo PR Pro

Feb 8, 2022 | Living the Life

How To Handle — and Avoid — Late Payments as a Solo PR Pro

Feb 8, 2022 | Living the Life

past due payment stamp representing late payment

Dealing with a client who has missed a payment is no one’s favorite thing. As a solo PR pro, you would probably rather be writing a pitch or putting together a story — or doing literally anything other than following up on unpaid invoices.

But missed payments happen. And although handling them can be stressful — especially if you feel like your working relationship is on the line or if the client won’t return your calls — it’s crucial to your business that you do what you can to get paid.

We asked two solo PR pros — Doug Levy of Doug Levy Communications and Susan Stoga of Carson Stoga Communications — to share their tips for handling non-paying clients and for preventing the situation before it happens.

Ask for payment up front

​​Requiring some payment before you begin working is increasingly commonplace for consultants and is highly recommended — it helps protect you from being stiffed for your hard work by a non-paying client.

If the project in question is limited in time and scope, a 50% deposit may be sufficient. For ongoing or monthly retainer clients, many PR pros prefer to bill a month in advance. At the very least, ask for a deposit before you begin work. 

“I recommend that solos require a signed contract and a deposit before work begins,” Susan says, “which is very important if this is a client or contact with whom you have no experience. Early on in my career I was told to ‘work off the client’s money,’ and I’ve followed that advice for 20+ years.”

While it would probably be too difficult to ask existing clients to switch to this payment model — both from an internal, bookkeeping standpoint and for the sake of your client relationship — you can adopt the up-front payment policy with new clients.

Remember: If you tell a client that payment is required to begin work, then it’s up to you to refrain from getting started until the check arrives! It’s OK to do a little initial research, but don’t let the client see you working, lest it delay their initial payment.

Good contracts make good clients

Although many people will wait until there’s a problem to get a lawyer involved, Doug says that it’s best to work with a legal expert to clarify your contract terms before you take on your first (or your next) client.

“The more you think ahead about potential problems, the easier it is for a lawyer to help you avoid them,” he says, adding that the few hundred dollars you shell out for a lawyer’s assistance up front could help you bring in thousands of dollars in revenue down the road.

“The right contract heads off collections and other problems,” Doug says. “Before I start working with anyone, they know that they have to pay a deposit in advance and that they are obligated for my fees even if we don't get the results that we want — because we can only guarantee that we will do our professional best; we don't control reporters or others and whether they will do a story.”

A thorough contract should also cover when you will submit invoices and expect payment, what happens in the case of non-payment and how you will get paid for completed work in the event that the contract is terminated.

Doug also includes clear terms about who owns his work output and when, if ever, ownership transfers to the client.

“If a client bristles at some of these basic terms,” he says, “then you should ask whether this is a client you want to be working with.”

Lay out ground rules early in the process

To avoid a lot of back-and-forth as you get set up with a new client, include some basic payment terms with your initial proposal, then spell out all of the expectations in detail in your contract. 

For a short-term project, you might say something like this:

Upon acceptance of this proposal, a letter of agreement will be provided for signature and 50% of the fee will be paid up-front prior to the beginning of any work, with the remainder due and payable upon delivery. Should you choose to terminate the project at any time, we will be entitled to payment for all time invested up to that point. We accept payments by check or Paypal (which is useful if you’d prefer to pay by credit card).

For long-term agreements with monthly billing arrangements, your terms may say something like:

Upon acceptance of this proposal, a contract will be provided for signature and the fees for one month will be paid prior to the beginning of any work.You will receive a timesheet each month outlining activities completed on your behalf.

The promise of a timesheet is not always necessary, but offering an accounting of your efforts during the month can put clients at ease knowing what you’re doing with their dollars.

A client missed a payment — now what?

The first step in the event of non-payment is to contact the client. Set up a system for yourself to take some of the stress out of deciding when and how to to reach out.

“Reach out when payments are 10 days late and verify that invoices have been received,” Susan advises. “By setting up that payments are due at the top of the month for ongoing clients, you have 30 days for the client to process the invoice.”

She also recommends that solo PR pros who handle all the business operations themselves set up an email address (like “accounting@yourcompanyname.com”) to easily track invoices and correspondence about payments.

“Just make sure that the first contact is gentle,” Doug says, remembering a time he thought a client was outrageously late with a large payment. “Once I reached their accounting person, they were able to provide details of their payment that had been made weeks earlier. The problem turned out to be with my payment processor. In fact, the client paid well before the contractual due date. Had I been hostile or accusative in that initial outreach, I don't think this would have had a good outcome.”

One consideration is when to stop working on projects for a non-paying client, especially if the past due amount is becoming large. If you do choose to stop, Doug recommends sending a written notice that you are stopping and the reason why, along with a recap of the past due amount, ways the client can pay it and a reminder of your contract terms.

Still no payment, and now the client is MIA — Do I need a lawyer?

If you can’t get in touch with your client and there’s no sign of a check after the agreed-upon time has passed, it may be time to get help.

“In my opinion, it is always worth it to have an attorney write a collections letter and have them handle it unless the value of the outstanding bill is less than the attorney's time,” Susan says.

Doug says, “I can't think of a situation where a collections agency would make much sense, since they are expensive, and, if a client hasn't paid you, it's entirely possible that the client is short on money and won't be any more likely to pay a collections agency.”

Small claims court could be a more cost-effective option, but even then, you’ll need to calculate the ROI for your time and money.

“If the client is well funded and just not paying, then go after them,” Doug says. “But if the client is on the verge of bankruptcy, cut the losses and walk away.”

Choose the best path for your business

Whether it’s choosing to require payment up front or deciding how to go after unpaid invoices, remember that there are many ways to run a Solo PR business, and it's not “wrong” to do things differently. 

That said, let this be your encouragement to ask for what you have earned.

“I've talked to many business owners in many professions who are reticent to contact a client for payment,” Susan says. “I always encourage them to be aggressive on this. You, the business owner, were contracted to do the work. You did the work and deserve to get paid. Your work has value!”

Written By Karen Swim
Karen Swim is the President of Solo PR and Founder of public relations agency, Words For Hire.

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