Most advice about getting paid is about confidence. Value yourself, be firm, do not apologise. That advice is not wrong, but it treats a structural problem as an emotional one.
Clients mostly pay late because paying you is a low priority task in somebody else’s week, sitting behind an approval, in a system with a payment run every second Friday. Almost everything that works is about making your invoice easier to pay than to postpone, and almost all of it happens before the work starts.
The interest section below touches Canadian law, so the standing caveat: this is general information rather than legal advice, and the sources are linked.
What payment terms actually work?
Shorter than you think. Net 30 is the default because it has always been the default. Net 14 is entirely normal for smaller work and simply gets you paid sooner. You will not lose a client over it, and if you do, that is information.
A date, not a duration. Put the actual due date on the invoice, as a date. Everything about why is in what to include on an invoice, but the short version is that “Net 30” asks the reader to do arithmetic and a date does not.
An early payment discount, if your margins allow it. Two percent for payment within ten days costs you two percent and can move an invoice from a sixty day cycle to a ten day one. For some businesses that is the cheapest financing available.
Terms that match their reality. If a client runs payments on the 15th and the 30th, an invoice landing on the 16th with 14 day terms will be paid on the 30th regardless of what you wrote. Ask when their payment runs happen and time your invoicing to land just before one. This one trick removes more delay than any amount of firmness.
Should you take a deposit?
For most work with a new client, yes.
A deposit does three things. It covers you if the job dies halfway. It filters out clients who were never going to pay, because someone who will not pay a deposit will not pay an invoice either. And it establishes at the very start that money moves when you say it moves, which sets the tone for everything after.
A third up front, a third at an agreed midpoint, a third on completion is a common shape for larger jobs. For smaller ones, half and half is simpler. For ongoing retainer work, invoice in advance for the coming month rather than in arrears for the last one.
The awkwardness of asking is almost entirely in your head. Deposits are completely standard, and clients who work with freelancers regularly expect them. The ones who push back hardest are, with unhelpful reliability, the ones who go on to pay late.
Handle deposits properly in your records, too, rather than mentally subtracting them later. A deposit is a payment against an invoice, not a discount on it, and it needs to show as one. Ledger tracks deposits, partial payments and adjustments as separate transactions against a balance for exactly this reason: at any moment you want to know what is actually outstanding without reconstructing it.
What should be in writing before you start?
Six things, and they fit in an email. This does not require a contract template, though a real agreement is better for large work.
- What you will deliver, specifically enough that both of you would recognise it.
- What it costs, and whether that is fixed or a rate.
- When you invoice, including any deposit and any staged payments.
- Payment terms, as a number of days.
- What happens to changes in scope. Covered in quote, estimate or invoice, and the short version is that changes get priced before they get done.
- What happens if payment is late, including interest if you intend to charge it.
That last one matters more than it looks, and the next section is why.
What interest can you charge on an overdue invoice in Canada?
This is where good intentions meet a piece of legislation almost nobody has read, and the result is that most of the interest clauses printed on Canadian invoices are worth far less than they say.
Three things to know.
Interest has to be agreed. Printing “2% monthly interest on overdue accounts” at the bottom of an invoice, when nothing was said about interest before the work started, is a term you introduced after the agreement was made. Get it into the terms you agree up front, not onto the invoice afterwards.
If you state a monthly rate, you must also state the yearly equivalent. This is the one that catches people. Section 4 of the federal Interest Act says that where interest is made payable at a rate for any period less than a year, “no interest exceeding the rate or percentage of five per cent per annum shall be chargeable, payable or recoverable” unless the contract “contains an express statement of the yearly rate or percentage of interest to which the other rate or percentage is equivalent.”
Read that again in practical terms. An invoice that says “2% per month” and nothing else does not entitle you to 24 percent a year. It entitles you to five percent. The clause you wrote to be tough has quietly made you more lenient than the default.
The fix is to state both: the monthly rate and the equivalent yearly rate, expressly. Whether the correct equivalent is the simple annual figure or the compounded one has been argued over more than you would expect, so if the amounts are meaningful, this is worth a lawyer’s eye rather than an article’s.
If no rate is fixed at all, the default is five percent. Section 3 of the same Act: where interest is payable by agreement or by law and no rate is fixed, “the rate of interest shall be five per cent per annum.”
And there is a ceiling. Section 347 of the Criminal Code makes it an offence to enter into an agreement to receive interest at a “criminal rate”, defined as an annual percentage rate exceeding 35 percent. That threshold was lowered from the older, higher figure, so advice written a few years ago will quote a number that is no longer right. Very few freelance interest clauses approach 35 percent, but compounding monthly charges plus fees can get closer than expected.
The honest summary: a properly drafted interest clause is worth having, mostly because it signals seriousness. As a collection mechanism it rarely does much work. The deposit does more.
How and when should you follow up?
Systematically, unemotionally, and earlier than feels comfortable.
Three days before due. A short, friendly note. “Invoice 0431 is due on Thursday, just flagging it in case it helps.” This is not chasing. It catches the invoice that never got approved, which is the most common failure and the easiest to fix.
The day after due. Factual. “Invoice 0431 was due yesterday and I do not show payment. Could you let me know where it is in your process?” Asking about their process rather than their intentions gives them something easy to answer and often reveals the actual blocker.
Day seven. Escalate sideways rather than upwards in tone. Ask to be put in touch with accounts payable directly if you are not already. Copy your day to day contact so they can see it is still open.
Day fourteen. Now say what happens next, with a date. “If I do not have payment by the 30th I will pause work on the current project.” Only say it if you will do it.
Two principles run through all of it. Never make the first follow up an apology, because “so sorry to bother you” frames a debt as an imposition. And keep it to the invoice number and the amount. The less emotional the message, the harder it is to file under “difficult person” instead of “unpaid bill”.
When do you stop working?
When you said you would.
Stopping is the only leverage that reliably works, and it only works if you use it when you said you would use it. A deadline you announce and then let slide teaches the client that your deadlines are suggestions, and every subsequent one is weaker.
Stop cleanly and without drama. Say what is paused, say what resumes payment, and keep the tone completely level. You are not punishing anyone. You are declining to extend further credit to a business that has not paid for the credit already extended, which is an ordinary commercial decision.
The genuinely hard case is a client who pays eventually but always late, and whose work you want. That is a pricing question rather than a collections one: they cost you more to serve, in cash flow and in attention, than a client who pays on time. Price accordingly at the next renewal, or let them go.
Nothing here is legal advice. The Interest Act and Criminal Code provisions are linked above and are worth reading directly if you intend to rely on them.