I'd really recommend Andy Clarke's approach:
Use a good contract. He has a great one here: http://stuffandnonsense.co.uk/projects/contract-killer/
Use a "sprint methodology" and bill by the week. You (as the designer) get paid at the beginning of each sprint (each week). Invoices are due upon receipt. https://findings.com/clips/8TNa9g/killing-contracts-an-interview-with-andy/
If someone doesn't pay, take them to small claims (or get a collection agency)
I agree with Justin. The approach mentioned in the article, might get you paid, but makes you look just as bad. Your reputation, and that of your business, should be very important.
“If someone doesn't pay, take them to small claims (or get a collection agency)”
Or, if you’re getting paid weekly, walk away and never work with them again. Less stress, hassle and you don’t require any further action from the client.
You can get sued for pulling a stunt like this, because it is an outright threat to defame the client. A MUCH better solution, is to do what every other professional does, and hire an aggressive collector.
I don't get why web developers/designers don't consider this as an option, and instead resort to juvenile grandstanding that opens them up for legal exposure.
Why spend money on a collector, when a stunt like this can work wonders? Chances are: if a client is unwilling to pay a small invoice, what's their willingness to hire a lawyer and pursue a defamation suit that they probably won't win? Not high.
They will win.
To expand, I had to do this once when I owned a small agency. I had written into my contract that after 60 days overdue, the bill would be sent to collections, and the client would have to pay the bill, plus the overdue fee, plus the collector's fee (usually 20-30% of the invoice, depending on how large the arrears are, and the "staleness" of the debt).
Within 3 days, I received phone calls from the client begging me to call the collectors off, because they had a PI tail him to a business meeting and confront him there. Two days later, I was paid in full, including all fees.
The first resort should be to have a contract in place, and for God's sake, don't hand over the final deliverables unless you've received final payment.
Try to determine what sort of clients you are taking on before ending up in a situation like this. Watch for red flags that show they are going to be a trouble client and avoid those clients.