[Closed] Freelance work: Very late payment of invoices

Only work for them on a pro forma invoice basis?

Don't steal their stuff. That won't end well.

I've been freelancing for years and while most pay on time late payment is pretty common and 2 weeks late really isn't that late and I certainly wouldn't class it as "very late". I've had quite a few that are a couple of months late. It's a pain but it goes with the job. For higher value contracts I insist on stage payments, including some upfront.

3 options really

1- withdraw your labour. So get the people who need you to put pressure on the people who don’t care who you are and are incentivised (probably) by paying late because it suits their wider objectives. Or they’re just rubbish. Doesn’t matter, you need them to feel some pain.

2- ProForma as PP says. Payment in advance. Tricky sometimes if you don’t know how long it’ll take but at least you know you’re being paid and when

3- Rock up to their main offices and explain that a) they are putting their company at risk as you’re prepared to walk and b) they are breaking the law by not honouring late payment charges.

All have consequences 😉 Depends how much they need you, how much you need them. Bottom line tho is even tho you’re the ‘little guy’ you’ve done the work and you need paying on terms they’ve agreed.

Years ago we had this with a big corporate. They’d outsourced their AP etc to General Electric I think. We just weren’t getting paid. We went with option 3 and their response was 14 days payment for 1.5% off invoice value. We went for that having agreed with our customer we could charge an extra 1.5% from now on…

It’s no fun being stressed out about payment. It’s not right the big corps appear not to care. But the solution is in your hands.

Oh and as PP says. Don’t steal stuff! That’s not option 4.

We sometimes get paid late because universities have arcane/complex budgeting and invoice procedures. Some are golden, others we have to chase every time. But it’s not like back in the day when we had suppliers to pay for kit.

One of the lessons of freelancing is always have 3 months cash in the bank. Easy to say, harder to do but it does take away the worry about slightly late payments.

Still think you need to take the matter in hand tho!

The realistic actions available to you mostly depend on:

a). how much you need their custom

b). how easily replaced you are by them for the work you're doing

Unless you have a decent amount of leverage (given that you've already tried being reasonable) you'll either need to suck it up or give them an ultimatum/various demands (e.g. payment upfront).

I hate it when the company I work for pays freelancers late. Especially MY freelancers because if I hired them it's because I need urgent important work doing without delay, and I know they'll do the job well and put in the hours that are needed. So I try to make our FD pay quicker, with admittedly limited success at times.

Only power you've really got is to turn down work moving forward, but you could ask whomever your direct contact there is to put some pressure on first and say that you're considering downing tools for them after the current job ends.

As above - stage payments for work (we normally do 25% upfront before starting a project).

You could also start charging more in the first place to cover for the inconvenience of being paid late.

And constantly pester them for payment - soon they will realise you won't just wait weeks and weeks to be paid and they will start to pay more promptly just to stop you from bothering them.

late payment is pretty common

It's pretty simple unfortunately. If you need the work, suck it up. If you don't, just turn it down (tell them why, they might apologise & try to do better!) or get them to pay up front (unlikely if the problem lies with their cashflow).

I wasn't aware of the £40 late payment charge, I know you are allowed to charge them interest. If you don't mind pissing them off just keep sending invoices for the extra late charges they haven't paid 😃

Pretty common for me as well.

I've just done about £15k worth of work without a PO even - so haven't even got to the point of being able to submit an invoice yet!

Months behind with it all but know the firm well so trust it will get sorted...

I don’t work without PO’s now. Sometimes the accounts dept is getting it in the neck but it’s not their fault as no PO was ever raised. A lot of my work is fixed price tho so PO’s are easier. Trying to write a schedule with days/expenses is always guesswork.

Once I realised it wasn’t me asking for their money, but in fact them not paying me MY money, the whole being too nice about it kind of went away 😉

In the past I had the goodwill of the people I reported to / worked for, the accounts team, however were known as The Business Prevention Unit.

I went down the route of telling the accounts department I would be calling twice a day for updates on the processing of my invoices. It soon became easier to pay up on time than get 2 phone calls a day.

I’ve just done about £15k worth of work without a PO even – so haven’t even got to the point of being able to submit an invoice yet!

Thanks all of you for your info and experiences. Much appreciated.

zilog6128 - Here's the info on the £40 late payment charge:
https://www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs

We’ve been caught out by this before when the guy we were dealing with unexpectedly (at least, he didn’t tell us 😂) left and no-one else seemed to know about it. Took a long time to sort that one out… So yeah, POs are a good idea!!

Yay, just got the PO through today so can now invoice my £15k 🙂

So will actually see the money in October...

Just glad I've got a nice buffer to fall back on!

Late payment?

Shall us freelance scumbags compare notes? What’s your worst?

It took me over 6 months to get paid by B&Q. Their accounts department is literally like a black hole.

I wouldn’t mind but I’d spent Christmas and new year working to bail them out of a hole of their own making. Finally got paid for it in June.

Apparently - and I’ve had it on good authority- the very worst payers in the country are the BBC

the very worst payers in the country are the BBC

Best payer I ever had was a TV company. Everything was very last minute but they were happy to pay to get it done. They phoned once asking for some extra bits, gave them a price and was told to invoice straight away. Payment was made before I'd even opened up the laptop to write the invoice.

Worst was probably about 6 months. Actually developed into a good working relationship. Still work for them occasionally and they pay in a week or so.

If you’re freelance then late payment goes with the territory, unfortunately

The amount of times I’ve looked at my healthy accounts, then at my empty bank account...

I once went round to a company and sat in the reception of their plush city centre offices and told them I wouldn’t leave until The 2 month late outstanding invoice was paid, and I’d be enthusiastically telling everyone who walked in how they don’t pay their invoices. I had it in my account in minutes.

Mind you, that was personal as the MD was a horrible, arrogant little shit who I despised from the second I set eyes on, and who took the piss right from the off.

Lots of stories about this kind of thing here: https://twitter.com/wudanyan/status/1153301789438955520

I've always felt like consistently staying on top of outstanding invoices and persistent chasing has worked best. If it gets bad enough, and you can find a replacement, then firing a bad client can actually be a good move in the end.

Also a freelancer, as lots have said above, it really depends on how much you need them as a client.
I've had a previous client who I worked with for a number of years, they were always a couple of months behind, some months it would be on time, others it could take 2 or 3 months. I did once get to the point of saying that I would walk if I hadn't been paid by a specific date. This was for a large multinational company as well.
I wouldn't see two weeks as being a concern, but it depends on the value of the invoice and the value of that to you.

The latest payer I had was a big corporate doing staged payments for a six month project. Payment schedule all agreed and signed, but payments outsourced to another company who I had to ring up and chase for every invoice. A couple of weeks to a month late each time, but not much work to pester them into it.

Biggest hassles tend to be universities and colleges though. I gave up guest lecturing because getting paid often took more work than doing the lectures. Worst was a college that sent a £200 invoice back, demanding it be split into at least a dozen different line items.

Retaining property as security for a payment of debt is called a lien
https://en.m.wikipedia.org/wiki/Lien

However, I would tread carefully! I think it tends to relate to things in your possession already, rather than walking off the client site with half a dozen spangly monitors assuring the security guard they'll "be back soon". 😉

Get yourself a paypal card machine (or similar) - cost is c£20 and then just take credit card payments whilst still on site.

Sue them via moneyclaims online for every 40d+ invoice? By the time Court Issue fees get added and their time in dealing with the litigation to prevent judgement, I'm sure they'll see that it's no longer cost effective to pay late?

Given that the payment departments are often remote from the "ordering office" it may not even effect your being employed.

And if they don't get their act together, and you get judgement after issuing as no defence is received by the Court, then nice men will gladly collect a company debt, for a fee, payable by the company, as receptions have sofas, computers and nice furniture which they find easy to take.

Sometimes companies pay late because they are shysters but in my experience it's often just down to admin with someone not signing something off they should have. A good relationship with your direct client and accounts payable helps. And use the phone and follow the call up with a confirmation email. Email alone usually doesn't work.

If it's a big company they'll just ignore your t&C's and point at the terms attached to the PO.

I would just increase your rate for this client or suck it up

I try not to get arsey with my client, they are always behind with POs, etc but they do pay eventually.

Not ideal, but at least I know I will be paid eventually...

Apparently – and I’ve had it on good authority- the very worst payers in the country are the BBC

Can't say that's my experience, although if we stopped supplying then it'd be hard for them to work without the cameras!

Having said that I just accept that I'm always ~2months behind as the channel are paying the production company, who are paying the facilities company, who are paying me, that's a lot of 30days and 'the bookkeeper will sort it next week's.

When my original co. was small i had 'Maureen' who managed all my accounts. She would sit on invoices and payments and badger Finance functions. In actual fact it was me doing it from a separate email account and my gf at the time ringing them when required. She was quite ferocious and on occasion clients would come and say 'Your Maureens pretty good , ferocious though'. Anyway, she got more Xmas cards than me and more party invites as well ! This came off the back of a 7 figure late payment that was 'painful' to manage. When i eventually sold the Co. they wanted to know who Maureen was as she didn't appear on the staff list. Principle was it made it less personal.

Sue them via moneyclaims online for every 40d+ invoice? By the time Court Issue fees get added and their time in dealing with the litigation to prevent judgement, I’m sure they’ll see that it’s no longer cost effective to pay late?

That's a great way to lose a source of income.

That’s a great way to lose a source of income.

Never forget that they're making money off your work, probably more than you.

Depends how replaceable you are though.

Years ago the company I was working for re-cabled a very posh clothes shop in Jermyn Street in London. It definitely didn’t cater for the likes of me and the gang trying hard not to destroy very expensive shop fittings as we pulled miles of Cat 5 cable through the building.

The old fella who ran it was a proper gent. Couldn’t have been nicer to work for even tho he ‘didn’t understand computers’ because he used these amazing ledgers going back about a 100 years!

Anyway we finished the job on a Friday afternoon. He asked me for the invoice, so I wrote it up there and then based on the original quote and he wrote me a company cheque. On a Couttes and Co bank account 🙂

Worse payers even were a big german manufacturing firm. Our MD lost his rag and said ‘I didn’t know I had 30 grand and if i did I wouldn’t lend it to you f*****rs’ which surprisingly did the job!

Never forget that they’re making money off your work, probably more than you.

Agreed but, as a freelancer/small business there has to be a degree of flexibility because there is often someone else happy to take your work from you.

The problem is, Finance/Accounts Payable are just processing payments, so you are just 'another bill'.

PO's are a good way forward, as most Finance Departments will pay an invoice against a PO much quicker - takes a lot less running round for authorisations.

You are possibly worth chasing the invoice via your 'contact' explaining you aren't getting paid - they can sometimes use some influence their side, but, and this is common, if they themselves aren't following due process, that can really delay payment as mentioned above.

I'm a Finance Bod, but see the issues from both sides ! Where I am now, we pay within 28 days, but sometimes payments can take much longer as someone hasn't followed process and left an invoice sat on a desk etc. etc. We always try and get people to sort a PO out first, as the invoice then just goes straight into accounts payable, and is paid on time.

Construction companies are the worst for pushing out credit, as everyone is pushing out payment delays, from the contracting company, to the contractors. In a previous role, even United Utilities would hold back payments to us as a middle tier contractor. I remember driving to the local office to collect a cheque, as they had 'forgotten' to process the invoice/cheque.

Good point Fossy - we work with education and the NHS lots. Some clients just say 'don't worry about the PO, I will sort it'. It's usually simply because they can't be bothered/are in a rush/would rather be doing something else. We now always request a signed Service Order Form which we do via Adobe Sign (originally called EchoSign) and there is a required field for a Purchase Order.

That way, when an invoice is overdue we can call the Accounts Dept straight away and they can check on their system and things are usually resolved quickly. If we don't have a PO and we call the Accounts Dept., we just get batted back to our contact who then has to go through the process of getting the PO which, in turn, takes a further 30+ days to be paid.

When I worked in a bikeshop, certain suppliers offered a discount if the account was settled within 30 days of receipt of goods, or something like that (this was like 10 years ago now). So could you add the £40 late fee to every invoice and then deduct it when paid ontime/early?

Shall us freelance scumbags compare notes? What’s your worst?

18 months.

was an image licence for a now U.S based global household name brand. the agency i originally did the work through no longer held the account, i chased, people left, emails went unanswered, people were on holiday “i’ll look into this for you” etc etc
i would forget then every month or 2 send another email. eventually they got back to me saying the client wanted to pay by credit card?!
i said i wasn’t set up for that. another month goes by and i up the ante and ring or send an email every couple of days. eventually threaten small claims proceedings and get told to go ahead, its not our debt.
finally i got a client contact for the U.S. and i found a way to take a CC payment for free so it got sorted in the end.

the agency should have just marked up my invoice by 20% and made their ex-client pay.

60 days is standard in my industry and 90 not uncommon. in some ways i like the idea of always having some money coming in when it’s bit quieter! i would probably think different if i had cashflow issues though.

in some ways i like the idea of always having some money coming in when it’s bit quieter!

Actually, that is a good point. My work is really up and down. It's quite nice to have a chunk of money come in when I'm not actually working. Feels like money for nothing, sort of 🙂

I’m not a freelancer per se but our business works on consultancy projects in a similar way, so we have had the same sort of challenges getting paid.

Our approach now is to explain at the beginning that we outsource our Accounts Payable to a third party. This means we don’t have to factor any time for this into our schedules and so they pay less.

Then we use these guys to recover any late payments or debts https://www.directroute.co.uk/ they are very good and very quick. You pay them a nominal amount (about £30 per month I think) and the rest of their costs get charged to your client.

It works well because it keeps you and the ‘debt problem’ separate and you don’t have to spend any time worrying about it.

We only got to this system after incurring a £30k bad debt with a high street name who had the money but thought they could bully us and not pay.

Dont let people hold you to ransom for your money.

Oh, and the dude above who is working without P.O’s, sorry to break this to you but you are going to get taken to the cleaners at some point. This will probably be by the person you trust the most.

Nothing much to add to the suggestions but after 27 years of working for myself - don't tolerate it one way or another. Stand your ground and get what you want out of it.

I've generally gone for this approach and refused to work with people that don't pay within my terms or ditched them.

The reason you work for yourself is to make it work for you.

A friend of mine had the same problem when he was self employed. He was forced to go down this route, but gave the company notice he was about to do it and would deliver the papers himself. No surprise they paid him there and then. Have a look at
https://www.gov.uk/wind-up-a-company-that-owes-you-money

Good luck.

My company is a terrible late payer, but mainly as our customers are, so we can't pay our suppliers until our customers pay us (and some take years to pay). Utterly shit situation, but just goes with the territory (Telecoms). We only survive as out biggest suppliers are far bigger than us and act as an unofficial banks, charging us interest on outstanding debts, without that the cashflow problems would have killed us off years ago.

I had prompt payment from B&Q and from the BBC (both about two or three years ago).

Worst was a large internet provider who I did hundreds of thousands worth of work for. We went almost a year waiting for some invoices.

We were their biggest supplier and I think we helped get the accounts payable woman ousted, as she was clearly way out of her depth there.

They were quite good after that. So is it possible to escalate and find out if the company is being deliberately stingy or if someone's just not doing their job right?