The short answer
Invoice for the work already done, immediately, while the client still feels responsible. Everything beyond that depends on 1 clause in your contract, and most agencies have never read it.
Send an invoice for work completed to the cancellation date, this week.
Add committed costs you cannot now avoid, itemised.
Check whether the contract gives notice, a minimum or a cancellation fee.
Settle what you owe your own contractors before the money runs out.
Put a time limit on any pause, because an open-ended one is worse than a cancellation.
Your position is strongest in the first fortnight. A client who has just cancelled feels they owe you something; 2 months later they are thinking about budgets and the project is somebody else's memory.
3 ways a project ends early, and they differ
How it ends | What triggers | The risk |
|---|---|---|
Formally cancelled | Notice, and whatever the contract says | Low. You know where you stand |
Paused indefinitely | Nothing at all | High. No clause fires, nothing is owed |
Quietly stops | Nothing, until you raise it | Highest. Ambiguity favours the client |
The second and third rows are where agencies lose money, because a contract's cancellation terms are triggered by cancellation. A project that simply goes quiet triggers nothing, and the longer it stays in that state the harder it becomes to invoice for anything.
So the useful move with a vague pause is to make it definite. Write to the client stating that you are treating the project as paused from a date, that work to that date will be invoiced, and that you will hold the team until an agreed point. That is a reasonable message that converts silence into a position.
What you can usually recover
3 categories, in descending order of how easy they are to collect:
Work completed. Hours worked or stages delivered up to the cancellation date. Rarely disputed when the record is clear, which is what staged billing produces as a by-product.
Committed costs. Licences bought, contractors booked, print or media placed. Recoverable where you can show the commitment was made for this project and cannot be cancelled.
Notice or a cancellation fee. Only where the contract says so. Without a clause this is a negotiation rather than an entitlement.
Itemise all 3 separately on the invoice. A single lump sum invites a single objection, while a list of dated, attributable items invites a conversation about individual lines, and most of them will survive it.
The clause that decides it, and what it costs you
Most agency contracts let the client terminate for convenience on notice. It reads as fair and it is standard, but it is worth understanding what you accepted.
Without such a clause, a client who abandons a signed contract is generally in breach, and the ordinary remedy for breach includes the profit you would have earned on the rest of the work, subject to your duty to reduce the loss. With a termination for convenience clause, the client has bought the right to walk away, and you get what the clause says: usually work done, sometimes costs, occasionally a fee.
So the clause reduces your claim rather than protecting it. That is not an argument for refusing one, since clients want the flexibility and will pay for it in other ways, but it is an argument for making sure the clause gives you something. A termination clause with notice and no compensation is the worst version to sign.
What the US government pays its own suppliers
Public procurement is a useful benchmark here, because the terms are published and the government terminates for convenience routinely.
Under the standard federal clause, when a fixed-price contract is terminated for convenience the settlement may include a reasonable allowance for profit on work done. The guidance for contracting officers is more explicit: FAR 49.202 directs that profit be allowed on preparations made and work done for the terminated portion, and states that anticipatory profits and consequential damages shall not be allowed.
That is a clean statement of the principle a commercial cancellation usually follows: you are paid for what you did and what you prepared, including a margin on it, and not for what you would have earned had the work continued. Worth knowing when a client suggests that work done is all you can bill for, because preparation and committed costs sit inside the standard too.
The same federal clause also requires the contractor to terminate its subcontracts and settle them, which is the situation covered below and in paying your freelancers.
The invoice to send
Within days, not weeks, and itemised:
Subject: Invoice #240 — [project] to [cancellation date]
Hi [Name],
Following your note on [date], here's the invoice covering work to the cancellation date.
It breaks down as: [stage 2 completed in full, amount]; [stage 3 part-complete, X days at the agreed rate, amount]; and [committed costs: the photographer's cancellation fee and the stock licence, both non-refundable, amount].
I've attached the time record and the 2 supplier invoices behind the third line.
Everything delivered so far is yours to use once this is settled, and I'm happy to do a short handover call so nothing is wasted.
Thanks, and I hope the project comes back around.
[Name]
The handover offer matters more than it looks. It gives the client a reason to settle promptly, it keeps the ending warm, and it costs you an hour. Whether files are released before payment depends on your terms, which is the question in holding files until paid.
Your own commitments do not pause
A cancelled project rarely cancels your costs. Contractors booked for the following month, a freelancer part way through a deliverable, a subscription bought for this client: those obligations stand on their own terms and your client's decision is not a term of any of them.
Deal with them in the same week:
Pay for work already done on the agreed date, from the deposit if you took one.
Tell anyone booked for future work immediately, with as much notice as you can give. A freelancer told 3 weeks out can refill the time; 1 told 3 days out cannot.
Check what you can cancel and what you cannot, because the latter becomes a line on the client invoice.
Honour any cancellation terms you agreed with them, since you would want your client to honour yours.
The indefinite pause
The hardest version is a client who has not cancelled and has not continued. Nothing in the contract fires, the team is half-committed, and every week makes invoicing for the work harder.
Treat it as a decision that needs making rather than a state you wait out. Write and propose terms for the pause: a date by which work resumes, an invoice for everything to date, and a note that the team will be reallocated after that date and that restarting will need a new timeline. Most clients will either confirm the pause properly or admit it is a cancellation, and either is better than the drift.
If the silence continues past your stated date, the sequence in what to do when a client stops replying applies, starting with the phone.
What to put in the next contract
4 lines, agreed at signature when nobody is upset:
Notice on both sides, commonly 30 days, so the ending has a shape.
Payment for work to the termination date, plus committed costs, stated explicitly.
A pause limit. Work suspended at the client's request for more than, say, 30 days is treated as termination. This is the clause that solves the hardest case above.
A minimum, where the engagement has fixed costs: a stated percentage of the fee payable if cancelled after work starts.
The pause limit is the one almost nobody has and nearly everybody needs. Add it at the next renewal, using the approach in changing a client's payment terms, rather than raising it alone.
FAQ
A client cancelled mid-project. What can I charge?
Work completed to the cancellation date, plus costs you committed for the project and cannot now avoid. Anything beyond that, such as notice or a cancellation fee, depends on what your contract says. Invoice quickly and itemise the categories separately.
Can I charge for the work I would have done?
Usually not where the contract allows termination for convenience. The federal standard illustrates the general principle: profit is allowed on work done and preparations made, while anticipatory profits are not. Without such a clause, abandoning a contract may be a breach with wider remedies, which is worth legal advice.
The client paused the project rather than cancelling. What do I do?
Make it definite. Confirm in writing that you are treating it as paused from a date, invoice everything to that date, and say when the team will be reallocated. Vagueness benefits the client and costs you.
Do I still pay freelancers on a cancelled project?
Yes, for work they have done, on the agreed date. Their contract is with you. Tell anyone booked for future work as early as possible so they can refill the time.
Should I hand over the work if the project is cancelled?
Usually yes, once the final invoice is settled, and offering a handover gives the client a reason to settle. What you can withhold before payment depends on your contract's ownership terms.
What clause would have helped most?
A pause limit: work suspended at the client's request beyond a stated period is treated as termination. It is the clause that converts the hardest situation, an indefinite pause, into one your contract already covers.
Not legal advice. What you can recover on an early termination depends on your contract and on local law, and the federal provisions cited here apply to US government contracts rather than to commercial agreements. Take advice before pursuing a substantial claim.