The coronavirus pandemic has brought the issue of non-payment to the forefront.
Even as the pandemic has hit everyone hard, the issue remains the camel in the room.
We all need to work and want to keep our clients happy, but when the ugly truth emerges that a client can’t or won’t pay, things can get sticky.
There’s been a big push over the last year to be a bit more understanding as the pandemic has wrecked markets everywhere.
But we all still have bills to pay, mouths to feed, and businesses to maintain.
Before beginning any new client relationship, whether it’s a three-year cash cow or a one-off project, setting the terms of agreement at the outset is important to ensuring payment is received. Drawing up a proper contract with specific clauses regarding non-payment makes it abundantly clear to a client you mean business; it also ensures they understand your terms.
Smaller firms – like mine – and freelancers seem to suffer at the whims of a client’s “jazz accounting” practices, but we can all take steps to avoid not getting paid by laying down some rules from the outset. Firstly, have the courage to ask for 100 percent of payment upfront. It sets the right tone. If that doesn’t work, then ask for a 50 percent upfront payment – even if it’s just 50 percent of the first month’s retainer. This is a chance to test the waters and to note any red flags early on in the relationship.
Remember though that there is a difference between can’t pay, won’t pay, and hasn’t paid, and it is worth maintaining a strong relationship with the client – and their accounting team – to beware of any issues with your work or other reasons as to why you might not be getting your dues. Maintaining a good working relationship with the client can also help you understand payment cycles.
Non-payment ultimately affects staff and suppliers, and I have been a victim of this cycle. Thankfully it’s not a common occurrence, thanks to great client relationships. At the end of the day, clients are people with bills to pay and mouths to feed as well.
In one instance of non-payment, the client felt terribly and had an honest explanation as to why they couldn’t pay. We maintain a good relationship.
Try to negotiate payment dates and schedules and get them to stick to them.
Sometimes – in the spirit of supporting each other through the bad times – especially if it’s a small fee, it’s worth showing a bit of good will.
However, now in the midst of a pandemic, everyone has suffered financially. Many small companies need to maintain cash flow and aren’t in a position to cover third party costs.
While non-payment may seem more prevalent in the Middle East, it is an issue globally, and I hear tales of non-payment from sister companies and suppliers all over the world – especially now.
Why does it seem more prevalent here? Perhaps because so many people are entrepreneurial here, yet lack the requisite business skills or financial acumen to manage their business accounts? Is it a knock-on effect? A doesn’t pay B, so B can’t pay C? Or is it a rotten attitude that the services have been rendered and you can’t take them back, so why pay?
In public relations, reputation is everything. We want – and work hard to ensure – smooth relations with clients and their account departments.
When it comes to chasing non-payment, like in international politics, try diplomacy first. Always remain civil. Aim to take at least a proportion of payment up front, on the basis that this shows trust on the part of both parties, and don’t let clients fall too far behind on payment.
Make sure your contracts are watertight.
Ultimately, stop service if payment hasn’t been made, at your discretion. Communicate this to the client, but try to let them know as soon as possible, so you don’t cease service immediately. Try to negotiate payment dates and schedules and get them to stick to them. Always be prepared to walk away. Make sure your contracts are watertight. If you or your client is Dubai-based, there is an amicable dispute settlement court at WAFI Mall that will negotiate on your behalf if your emails and calls are going unanswered.
While legal action might be a last resort, the dispute court – which operates on a percentage fee – is effective, and far cheaper than getting lawyers involved.
As an industry, we can do more to stop the rot that is non-payment. The Middle East PR Association (MERPA), of which I’m on the strategy board, has recently joined a working group to support freelance public relations experts in the region.
Financial hygiene and organisation are key. And – as I’ve learnt the hard way – being resolute and strict in chasing payment is the surest way to ensure you get your money.
Ananda Shakespeare, founder and CEO of Shakespeare Communications.
by Staff Writer
More of this topic
How to deal with, and avoid, the curse of non-payment in the age of coronavirus
Ananda Shakespeare, founder and CEO of Shakespeare Communications.
The coronavirus pandemic has brought the issue of non-payment to the forefront.
Even as the pandemic has hit everyone hard, the issue remains the camel in the room.
We all need to work and want to keep our clients happy, but when the ugly truth emerges that a client can’t or won’t pay, things can get sticky.
There’s been a big push over the last year to be a bit more understanding as the pandemic has wrecked markets everywhere.
But we all still have bills to pay, mouths to feed, and businesses to maintain.
Before beginning any new client relationship, whether it’s a three-year cash cow or a one-off project, setting the terms of agreement at the outset is important to ensuring payment is received. Drawing up a proper contract with specific clauses regarding non-payment makes it abundantly clear to a client you mean business; it also ensures they understand your terms.
Smaller firms – like mine – and freelancers seem to suffer at the whims of a client’s “jazz accounting” practices, but we can all take steps to avoid not getting paid by laying down some rules from the outset. Firstly, have the courage to ask for 100 percent of payment upfront. It sets the right tone. If that doesn’t work, then ask for a 50 percent upfront payment – even if it’s just 50 percent of the first month’s retainer. This is a chance to test the waters and to note any red flags early on in the relationship.
Remember though that there is a difference between can’t pay, won’t pay, and hasn’t paid, and it is worth maintaining a strong relationship with the client – and their accounting team – to beware of any issues with your work or other reasons as to why you might not be getting your dues. Maintaining a good working relationship with the client can also help you understand payment cycles.
Non-payment ultimately affects staff and suppliers, and I have been a victim of this cycle. Thankfully it’s not a common occurrence, thanks to great client relationships. At the end of the day, clients are people with bills to pay and mouths to feed as well.
In one instance of non-payment, the client felt terribly and had an honest explanation as to why they couldn’t pay. We maintain a good relationship.
Sometimes – in the spirit of supporting each other through the bad times – especially if it’s a small fee, it’s worth showing a bit of good will.
However, now in the midst of a pandemic, everyone has suffered financially. Many small companies need to maintain cash flow and aren’t in a position to cover third party costs.
While non-payment may seem more prevalent in the Middle East, it is an issue globally, and I hear tales of non-payment from sister companies and suppliers all over the world – especially now.
Why does it seem more prevalent here? Perhaps because so many people are entrepreneurial here, yet lack the requisite business skills or financial acumen to manage their business accounts? Is it a knock-on effect? A doesn’t pay B, so B can’t pay C? Or is it a rotten attitude that the services have been rendered and you can’t take them back, so why pay?
In public relations, reputation is everything. We want – and work hard to ensure – smooth relations with clients and their account departments.
When it comes to chasing non-payment, like in international politics, try diplomacy first. Always remain civil. Aim to take at least a proportion of payment up front, on the basis that this shows trust on the part of both parties, and don’t let clients fall too far behind on payment.
Ultimately, stop service if payment hasn’t been made, at your discretion. Communicate this to the client, but try to let them know as soon as possible, so you don’t cease service immediately. Try to negotiate payment dates and schedules and get them to stick to them. Always be prepared to walk away. Make sure your contracts are watertight. If you or your client is Dubai-based, there is an amicable dispute settlement court at WAFI Mall that will negotiate on your behalf if your emails and calls are going unanswered.
While legal action might be a last resort, the dispute court – which operates on a percentage fee – is effective, and far cheaper than getting lawyers involved.
As an industry, we can do more to stop the rot that is non-payment. The Middle East PR Association (MERPA), of which I’m on the strategy board, has recently joined a working group to support freelance public relations experts in the region.
Financial hygiene and organisation are key. And – as I’ve learnt the hard way – being resolute and strict in chasing payment is the surest way to ensure you get your money.
Ananda Shakespeare, founder and CEO of Shakespeare Communications.
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