There are lots of things that may keep you up at night as a self-employed person—and late payments from clients is one of them. An estimated 29 percent of freelance invoices are paid late, according to new reports. As such, chances are good that, if you work for yourself, learning how to handle late payments from clients is a skill worth acquiring.

It may feel awkward to do so, but discussing late payments with clients is necessary for the security of your business because late payments disrupt cash flow needed to cover business expenses and personal needs. Their financial strain can also impact your ability to meet financial obligations, invest in your business, and maintain work-life balance, as well as strain relationships with clients and affect credit ratings, leading to reduced operational flexibility and increased stress.

In my experience, people are typically afraid to approach a client about late payments because they’re afraid of annoying or upsetting the client. But here's the thing:

Your clients do not hold all of the power.

They should be just as concerned with annoying or upsetting you by being late with their payments. And more likely than not, these situations can be easily solved with some good ole fashioned communication. So let’s break down how to approach and communicate with your clients about a late payment. Because you need to get paid.

Scenario No. 1

You’ve been working with a new client and after the first month of service, you've submitted your invoice. Another month of work has gone by and you’re about to submit your second invoice but haven’t been paid for the first invoice you submitted. You originally agreed to payment schedule terms with your client at the start of your working relationship and put a “net 30” payment deadline in your scope of work and invoice. 

If the terms have been agreed upon and this is the first time you and your client are working together, it may take time to get the first payment process into rotation with human resources (HR) and accounts payable (AP). 

While this isn’t ideal for any situation, it’s one of the many hurdles of freelance life, and it’s better to prepare for it than not; but that doesn’t mean you shouldn’t say anything when a payment is late either.

Say this:

“I’m getting ready to submit my second invoice and wanted to let you know I still haven’t received payment for last month’s services. Do you have everything you need from me to get this processed? If so, can you please let me know when payment is expected to come through?”

Don’t say 

“….” (Silence is not an option here.)

The breakdown

When it comes to talking to your client about getting paid, more people opt for saying nothing over something. It’s imperative you keep an open dialogue about payment processing so you can better manage your personal finances. 

Freelancers don’t have the luxury of bi-monthly paychecks, and your clients will understand this. Remember, your services are an investment, and they should respect your time and business by actively communicating when payment may be late.

If you approach your client about a late payment and they’re able to share why it’s running late and when it will be processed, that’s a great first step. Take note and document it in a follow-up email with the information that was shared if the conversation is held in person or over the phone.

From there, hold your clients accountable. If the date comes that they said you’d receive payment and it doesn’t process, follow up with another email. Chances are, there’s another department that handles payments and your client will do their due diligence to make sure you get paid.

Scenario No. 2

You’ve submitted not one, but two invoices that have not been processed. You’ve approached your client about the first late payment and they gave you a timeline for when it would be processed. Now you have two late invoices and it’s time to submit invoice number three.

Say this:

“I’m getting ready to submit my third invoice and have still yet to receive payment for my first or second invoices. The terms we agreed upon have not been met and I’ve followed up several times to try and resolve this matter together. With respect, I will have to cease my services if these late invoices aren’t processed by one week from today. I hope you can understand the difficult circumstance this puts me in and that we can work together to reach a solution.”

I have a feeling this is going to cause some mouths to drop.

What? Cease services? 

YES. You need to get paid!

Freelancers, hear me! This is business 101. 

Clients and freelancers create a circle. You should be getting just as much value from the relationship as your client is getting from you. This isn’t just measured in dollars. This is measured in reliability and respect. If you have continually met your deliverables and communicated your expectations for payments and they’re not being met, then it’s time to take a stand.

It will be difficult, but it is necessary. And it will light the fire under your client’s butt because if you’re doing your job right, having you around makes their work-life easier, and they should want to keep you happy and, ultimately, paid.

This article was written by Audrey Adair-Keene and has been updated.