As freelancers, we all have regular monthly bills to pay BUT we don’t have the luxury of a fixed amount paid into our bank account on the same day each month. What can you do to ensure you get paid on time?
There have been many times when I’ve been owed several thousand pounds by clients but the money is sitting in their bank account and not mine. If your experience is anything like mine, you’ll know that some companies are notoriously slow at paying. Up to 90 days isn’t that unusual.
I’ve found that it is possible to change these terms, since not all payment terms are set in stone. One client of mine has terms of 60 days and mine are 30, so we agreed on 45.
Like me, you’ve probably heard every excuse in the book about why our money hasn’t been paid to us.
“The accounts lady is sick.”
“The accounts lady is on holiday.”
“We lost your invoice.”
“I’m still waiting to get the invoice approved.”
“We posted a cheque book to our book keeper but the postman’s cart was stolen and the cheque book was in the cart.” (Actually that one turned out to be true!)
My ‘how to get paid on time’ tips
- Send in your invoice as soon as you’ve finished the project. Don’t wait until the end of the month. Then, follow it up a week later with a statement. (Some companies only pay once they’ve received a statement.)
- Get to know the people in your clients’ account departments. And be friendly to them at all times. Phone them as soon as an invoice is overdue and ask when you can expect to be paid. I usually find I have to make three phone calls – persistence and friendliness usually pay off (and up.)
- If a client is REALLY dragging their feet about paying you, there’s always the small claims court (if you’re based in the UK). There have been two occasions when I’ve had to resort to this but it really is a last resort because you won’t hear from that client ever again. But, to be honest, would you want to do any other projects for a company that treats you like that?
What if a client goes bust owing you money?
If a client goes into liquidation owing you money, it’s unlikely you’ll see any of that. It happened to me once – I was owed £2,000 by a design agency that folded. It made me realise that charging a percentage upfront for new clients is a good idea. If possible, try to charge 50% upfront.
And keep your ear to the ground about how a company is performing. If you sense any warning bells about the financial state of a client – and there are plenty sounding just at the moment – don’t take on the project.
My experience is that the larger the organisation, the longer they take to pay. The exception is the public sector – they now pay extremely promptly (within 14 days here in the UK).
What’s your worst experience about clients not paying you?