Consulting woes: I just want to get paid.

As a home-based independent consultant, one of the most important tasks that you can nail is getting paid on time. It shouldn't be rocket science, yet it is. If you're just now entering the business of working for yourself, get used to the fact that you're going to be a part-time, industrious and high-value worker, and part-time collections agent.

My good friend and colleague, Howard Baldwin, who rants with brio about getting older in his blog, has also proven over the years to be a good partner in crime for whining about deadbeat clients. Complaining, however, hasn't done us much good.
Has anyone noticed that during recessionary times, getting paid is doubly harder than normal? Here's what I have discovered over the past 18 months: I am working harder and longer and for less money. This is true for many of us. Chasing down invoices is just grinding salt into the wound. But let's not be victims here: I'd like to offer a few ideas that have worked for me, and as well, a couple of ideas from some like-minded friends. Here goes:

1. Research a new client before taking on a project. These days, with a plethora of online forms and social media to connect with colleagues from all over the world, there's just simply no excuse for not making a small effort to find out if anyone has worked for the company, and if they were paid on time and treated well. Do the diligence -- unless of course you have a personal reference whom you trust already and can offer insights on the client's ability to pay and general ethics. One colleague even told me she does a background check on every new client. Now that's taking the bull by the horns!

2. Insist on a contract. This is a basic form of CYA. Always have a project agreement in writing from the client— even if they are a friend or former colleague. Consider the fact that an e-mail message may or may not hold up in court. It's better to have something on company stationery, with a signature. Because naturally, you're going to have to sign some documents for the client before you get started. It's only fair, right? And without a contract, you have absolutely no ground to stand on when the client starts ignoring your e-mails and phone calls.

3. On the contract, include a late payment fee clause. If the client refuses to sign a contract with such a clause, then you have to wonder why. Of course, it may not make it any easier to get paid with some clients of a particular slimy, or bankrupt nature— but at least they know you mean business from the start. As well, include on your invoices the late payment terms. Mine call for a 5% fee after 45 days, and a 10% fee after 60 days.

4. Insist on payment within 30 days of receipt of invoice. When you purchase any service for yourself, such as from your doctor, housecleaner, or hairdresser, you pay at the time of service, right? So why should you wait longer than 30 days to get paid for your work? If the client says: "We don't usually pay within 30 days,” move on—no matter how cool the project or company. Keep in mind, of course, that some accounting departments are given directives by senior management to hold up invoices as long as possible for the sake of cash flow. This is a hard, cold reality that every consultant/contractor must fight vigorously. At a certain point, you may have to walk away from a client that continues to violate your 30-day payment window.

5. Consider asking for a portion of your fees upfront. A marketing colleague told me that she is often able to get 50% down. That's impressive. I've not tried it myself but I must say it is tempting. For a new client with a big project that could be risky, it's worth asking. I'm just simply not sure how effective this tactic is today in the marketing/PR/freelance writing world in which I work. But if you have a unique product or service, and competitive prices, you've got a decent chance.

6. Kill them with kindness.Your invoice is two, three or perhaps even four weeks late. After the first reminder, it's time to get tougher – yet still remain the courteous, friendly professional person that you are. "Dear editor/marketing manager/accounting person: I've really enjoyed working on this project with you. But at this point, I really do need to get paid. I'm sure there's some kind of mix-up, and I'd love to just get beyond this issue so that we can move on to the next project. What do you say? Can you give me an answer by tomorrow as to when I will get my check? Thanks so much. I appreciate your help."

7. When all else fails, get nasty.
"I once told a publisher that unless I was paid immediately I would tell everyone on the masthead, as well as all of the publication's advertisers, the story of my shoddy treatment. It worked,” says John, a freelance writer friend. There are many ways you can spread the word about a company’s disreputable ways through the Web: review pages, Better Business Bureau, online forms for your industry, and so on. You can also  take them to small claims court--a protracted, frustrating process which I did once and I would not recommend doing for any amount less than $1000. (Collections agencies are another option, of course, but you'll have to meet their minimum and pay their fees)

8. Know your tipping point.
Don't kill yourself over principle. If a company is simply out of cash, then you're just not going to get paid. It's better to spend your time taking care of your good clients, and developing relationships with new clients who have money in the bank and a solid reputation with vendors. In short, know when to walk away. All that stress is simply bad for your health!

Late and unpaid invoices happen to all of us at some time. Just make sure that you do everything in your power to ensure it’s an occasional blip and not the status quo; otherwise, sister (or brother, as it may be), you’ve got the wrong kind of clients!