Small-Business Debt Collection: What to Do When a Client Ghosts You
What do you do if a client suddenly becomes unavailable once it’s time to pay their bill? You can’t protect yourself completely, but there are ways to minimize your losses.
A few months ago, I received an email from a CentSai reader who was looking for a writer. We talked on the phone and he seemed legitimate. The website he wanted to build was sparse, but included some long-form writing. After we discussed rates, he asked me to come up with some ideas for articles and email them to him.
Once I sent him my ideas, he disappeared. I emailed him several times and left a voicemail message but heard nothing from him again. If this has happened to you — or if you’re a beginner hoping to avoid the same mistake — here’s what you can do to protect yourself, as well as what actions you can take if you’ve already been ghosted.
The best way to avoid being ghosted is to put a contract in place before you do any work.
I recommend having a lawyer help with the wording. But if you can’t afford legal advice, draw up a contract yourself. I’m not a lawyer, but I know that to protect yourself, there are certain things you should include:
1. Statement of Work
Describe the exact work that you will be doing, such as “five blog posts on the following topics” or “development of WordPress website.”
Beginning freelancers — and even some with years of experience — have trouble determining their rates. Should you charge per article or per word? Should you include costs for communication? Make sure to specify your rates, including whether you charge for doing research or writing more than one or two drafts (if you’re a writer), among other details that pertain to your situation.
3. Contract Expiration
If the expectation is that the contract will be ongoing, start with a term of six months and then revisit the contract if you need to make changes. You may decide to stop working with that client, or you may want to change the scope of your work.
4. Ownership of Materials
If you are creating material for a client, indicate who owns the final product, including whether you have the ability to use the material for your own marketing.
Should one of you need to terminate the contract, specify on what grounds (if any) that is permissible and that payment for all work up to that point is still required by a certain number of days following the termination.
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Collecting Unpaid Invoices After Your Client’s Already Disappeared
Unfortunately, getting into a sticky situation is not unheard of. If your client has already ghosted you, here’s what to do:
First, stay calm and assess the situation. How long has it been since you last heard from your client? If you aren’t completely finished with the project, stop working on it until you hear from the person and receive payment.
Send a polite email on Monday, assuming your client intends well and indicating any previous agreement. It will help to have a trail of emails that show what you need from the client — whether it’s feedback on submitted work, payment for work already completed, or something else — and a specific deadline for his response.
If you want to know when your client has read your email, there are quite a few free email-tracking software options that you can use, such as HubSpot and MailTracker.
If you haven’t heard back from your client by the deadline you set, try sending the email again each Monday for the next three weeks. After that, if there is still no response, send your invoices at the 60- and 90-day mark. The point is to make sure that the client is getting your notices and to continue bothering him until he takes action. If you still haven’t received anything after three months, threaten legal action. A simple threat sometimes encourages somebody to follow through on payment.
Legal Remedies for Small-Business Debt Collection
However, if you haven’t heard anything even after threatening to seek a legal remedy, you have two options. One is to actually retain a lawyer to send a letter on his or her letterhead. The other option to determine whether you can absorb the loss and move on.
I chose to forfeit my loss (only $15-worth of work), but I’ve definitely learned my lesson. Some potential clients may want me to start work immediately, but to be professional and to protect myself, I now type up a contract and make sure that we’ve both signed it before I start anything.
My time is valuable, so I believe it’s better to be cautious than to get myself into another sticky situation.