[julienmarie]

First thing is the payment schedule. I usually do 45% deposit, 45% at the end of the work, 10% when the site goes live. This ensure that I get at least 90% of the contract.

Also, have complete Terms and conditions. One important point is all the intellectual property that goes with your work => until complete payment, the work is yours, and usage of it is illegal. With final payment, I usually issue a letter transferring the intellectual property to the client.

An other important point is all the payment and refund policy. My policy is simple : no refund, projects started are to be paid in full. If the clients needs an explanation for that, explain that while you dedicate yourself to his project, you have to say no to other projects.

Make it easy to get paid. Set up an online payment system or anything that makes the relation frictionless. Even if it cost you a bit, it makes payment way faster to arrive (no need to go to the bank or post office, find the checkbook...).

One saying I like : Until you sign the contract, you have to be the mum of your clients, reassuring him, explaining things, understanding him. Once signed, you are his father : you are here to reminds him the terms of the contract. It means that you have to be thorough on revisions, delivery dates for contents, and of course, payments.

Trust your guts with clients. Usually, in my experience, clients who are hard to get payments from are the one hard to handle from the start. Usually individuals pr small companies, who try to get more for less. And know also that you have the right to fire a client if you feel that things go bad.

But the best way to get paid : make outstanding work, be nice and understanding. Know when you have to charge for a request and when it can be free. Little treats are always nice if it cost you close to nothing and it has value for the client.

I love this one : http://vimeo.com/22053820

[IsaacL]

"Until you sign the contract, you have to be the mum of your clients, reassuring him, explaining things, understanding him. Once signed, you are his father : you are here to reminds him the terms of the contract. It means that you have to be thorough on revisions, delivery dates for contents, and of course, payments."

Funny analogy. I like it, however...

I've recently been skimming the book "Million Dollar Consulting". In there, the author says you should avoid the temptation to treat the client like a parent ("I'd better hide this problem, or the client will get mad!") or like a child ("I'd better hide this problem - the client is too helpless to deal with it themselves").

Instead, treat them like a partner ("we have a problem. What should we do?").

[jeromeparadis]

What he said... That's what I've been doing since the 90s. It works well.

And, to answer the question what steps to do when they don't pay: not much you can do other than asking. There aren't any worthwhile legal resources for businesses or freelancers to be paid.

However, to not get there, make sure the payment schedule covers your work hours including profit and if they don't respect the schedule, stop working and mention there will be a delay in delivery. As he said, choosing well your client by avoiding people who are too difficult from the start usually avoids the worst kind of clients. As soon as your guts sees a red flag, don't ignore it and walk away. Your instinct is rarely wrong when sizing trustworthiness.

[porlw]

One problem is preventing the client from making use of the software when there is a dispute about payment.

Due to the laws regarding unauthorized access to computer systems, it may not be legal for you to remove or even communicate with your software once it has been deployed to the client. For internal systems it might not even be physically possible.

To combat this, I like to incorporate a "dead man's switch". This means that the software will stop working within a certain amount of time (say 30 days), unless I actively intervene. The switch is only disabled once final payment has been received.

A notice somewhere on the site or in the app will say "Evaluation software - nn days remaining", so the client is aware and gets a countdown.

The switch doesn't have to be super sophisticated but it should incorporate some element of encryption - that way if the client attempts to circumvent it you can threaten them with a DMCA claim.

[DrJosiah]

You should watch the video linked in the parent post. A lawyer pays for themselves.