If you're one of the 4.5 million freelancers in the UK, you'll know all about the numerous benefits of working alone. No big boss breathing down your neck (yes that's right, you are the boss!), more flexibility so you can catch up on your favourite series on Netflix first thing in the morning, and better pay… well if you want. No need to grovel for a pay rise anymore. Want to charge more? Do it. Remember, you're the boss!
On the other hand, working as an individual professional can also have its downsides – late payments being one of the biggest. And if the situation isn't dealt with appropriately it can have a major impact on the client relationship and even your personal life, potentially resulting in you being unable to pay for basic expenses. That means no more Netflix.
Whether you're at the beginning of your freelancing career or a more established professional, late payments can be a sensitive subject to deal with. So, if you're struggling with tardy clients, here's a few tips on how to rectify the situation.
*All companies have the right to charge interest on a late payment under the Late Payment Debts (Interest) Act 1998 and more recently the EU Late Payment Directive 2013. While this isn't advisable for every client who pays a few days late, it's an option where late payment is persistently occurring, as a means of covering your costs and inconvenience. Moreover, part-payment upfront is another way of assuring your costs are at least partly covered.
Invoicing on a consistent and timely basis will help reduce the risk of late payments. Check with your client when is the best time for them, based on their own payment schedules and, for those costumers you're concerned about, look into whether invoicing more regularly will help.
To save time invoicing, consider using an invoicing app such as Albert, which is free and easy-to-use, allowing you to send beautiful invoices to your clients as soon as you have completed the work. Remember, the quicker you send them, the quicker you'll get paid, leaving you more time to do what you love!
While improved admin and processes will reduce the amount of late payments you receive, it's inevitable that it will happen every now and again. When it does, it's important to broach the situation sensitively to prevent damaging your valuable client relationships. After 30 days of non-payment, here are some simple steps you can take:
There could be a number of reasons why your client is not paying you on time, from simply not having the money to not being happy with your service. They may feel as though you didn't fulfil their brief or are dissatisfied with the quality you produced, even if you haven't done anything wrong.
Digital Risks can provide tailored insurance cover for freelancers, including Professional Indemnity insurance (PI), which covers the costs of defending your business if your client is withholding payment because of their dissatisfaction of your service. If you come to realise that you are at fault, PI insurance may be able to cover the costs of damage caused to your client as a result of your work, possibly saving what's left of the working relationship.
As a freelancer, keeping healthy working relationships is vital for your business and prevention is always better than resorting to disputes and legal action. Being proactive, trusting your instincts and following these simple tips should help reduce the likelihood of late payments, as well as give you more time enjoy the fun stuff.
For more information on cover for freelancers call 0333 772 0759 or send an email.
Food for thought
It only takes 2 minutes to get a quote.