Recently I’ve been rather alarmed by some social media posts by freelancers. Why? Well – there seems to be a bit of a theme of freelancers finding it difficult to collect what they are owed for work that they have done. Surely that relationship should be mutually exclusive?
My very unscientific poll of opinions/experiences gathered from freelancers raised concerns even higher. Concerns about their cashflow as I heard stories of reservations about asking for money, fear of upsetting clients, not having time to chase what you’re owed, procrastination about actually doing it, hating doing the admin stuff – the list went on…
So, you’ve done your best editing or proofreading job – now you need to get paid for it. Here are my jottings about how to create a simple plan that will help you to help yourself get paid:
Create your invoice in a timely manner – have a strict policy about when you raise your invoice to your client. Not a week or a month later, or some vague ‘I’ll do it when I get time’ policy.
State your terms of business and state them clearly – make sure that your invoice clearly states the services, hours, agreed rates etc. Don’t make your client look for the terms of payment – yeh, I know you told your client in the initial quotation and may have taken a deposit – but that doesn’t mean that they remember what you told them weeks or months ago.
Consider offering a prompt payment discount – this might feel like a bit of an insult to your pride – you’ve done the work therefore you should be paid. But this strategy can be attractive to some clients. Shorter terms in return for, what they see as, a cheaper price is a win-win for both of you. It also saves you time and effort chasing the payment later. So, ask yourself whether a 2 or 3% discount for an invoice paid in 10 to 14 days is worth considering?
Send the invoice – by email, snail mail, carrier pigeon or hand deliver it – anything that is easy for you, but send it as soon as you have raised it.
Set up a ‘reminder to chase’ system – in your Outlook or Google calendar, in your diary, on your wall planner, a Post-it on the side of your screen – whatever works for you. Have and know a target date that you need payment by. Then stick to it.
Don’t sit back and just expect it to be paid – a couple of days later follow up with the person you have sent your invoice to or the Accounts Payable department, if it is a larger organization. Politely ask whether they have received it and ask if it has/is being processed for payment.
You have a legal right to charge late payment interest – no ifs, no buts – you are entitled to do this. Here’s a link to check it out https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
Your client is using their non-payment to you as their free cashflow, a 0% loan from you – Did you agree that? No – I didn’t think so! Might it upset them? Yes, probably – but do you really want to work with clients who treat your fee as free money in their bank?
Where do you go if payment isn’t forthcoming? There’s a few options – you have recourse to the law; you can take legal action through the small claims court. You could use a collections agency or solicitor to pursue this for you for a percentage fee. OR you could drop me a line at firstname.lastname@example.org – I could use over 25 years’ experience in credit and risk to chase this for you, for a reasonable fee.
Be brave and drop your regularly late paying clients. Controversial I know, but I can guarantee you that these will be the same persistent offenders. By taking that difficult decision and making a stand you might actually make them realise that they need your services and ask for a second chance. This puts you in a good place to, perhaps, reinforce or renegotiate your terms.
Remember – your cashflow doesn’t have to be a catastrophe!