Tim Aldred - The Frazzled Freelancer
Freelance commercial writer, successfully navigating self-employment one unexpected obstacle at a time. Contact me at twitter.com/tim_aldred
7 ways freelancers can ensure they get paid
Whether you’ve taken a freelance job or freelance work to change the world for the better, to spend time doing something you love or simply to make some money, we all need paying at the end of the day.
If we’re not going get paid what we’re due, there’s no point doing the work in the first place.
Unfortunately, non-payers and late payers exist. We, the freelance workers, can do our best to avoid being caught out by them, but we can’t catch them all. It’s something that will probably affect every freelance worker at some point of their career. So what can you do? Here’s seven bits of advice that should help you navigate such a situation.
1. Agree terms in advance
Nothing takes the sheen off the excitement of winning a new contract more than getting the paperwork out and talking payment terms, how much you want to be compensated and when you expect the cheque to be sent. The trick is to accept that’s an essential part of business and to realise that everyone else does it.
I bought a new phone a few months back, and the first thing they made me do, right there in the store before I’d torn open the box, was sign the contract. A colleague called me up with an exciting new job and asked if I wanted to be involved. I told her I certainly would, but before either of us set to work we hammered out the finer details and then went for a coffee to celebrate.
Get everything in writing before you start so there’s no misunderstandings. Send it by email and get them to reply that they’re ok with your terms so that you’ve got a record you can refer back to. Without it, you’ve got little sway over what happens in the future.
2. Send a reminder
There are several reasons why your cheque might not drop through the door on the day you expect. Some of these are perfectly innocent – the customer may have simply forgotten. Other companies have a policy of not paying before you ask, which I think is cheeky.
Either way, give the customer a prompt when payment is due. Stay polite, it’s a gentle nudge. And absolutely, don’t fear asking for money. They asked you to do the job, and you’re only asking for what you deserve.
When I first started out I found this template email which I use whenever an invoice doesn’t get paid, and it’s very effective. There’s no apologising, no attributing blame, it’s simply the facts. Feel free to use it:
I’m going through my usual monthly admin and am just chasing up on two invoices from (date).
Could you please confirm that they’re going to be paid as they’re now overdue.
3. Don’t be afraid of using the phone
If a polite email doesn’t work, it either got lost on the way or it wasn’t quite personal enough to do the trick. So the next step is to give your customer a call and ask politely.
An email is easy to delete, archive or skip over – both by accident and on purpose. A phone call is more direct, as you’re engaging with the other person one-on-one, and it’s more personal. You can ask questions and get answers, you can plead your case.
Just remember to stay polite. If you’re angry, shouty and pointing the finger of blame, they’re not going to take your call in future and they’re much less likely to want to pay up. Be friendly and genuine, and get them on your side.
4. Stay organised
When the onus is on you to chase payment, it pays to keep good records. Make sure you keep all the paperwork, contracts and agreed payment details handy. If the customer forgets, misplaces their copies or disagrees with what you’re asking for, you will need all the relevant agreements to hand.
Print them out and keep them in a file, or set an email folder aside. Then, when the work is done and the invoice sent, put a reminder in your calendar for the due date. If you forget the due date, your client might do as well. Then how are you going to get paid?
5. Be brave
There’s no worse feeling than knowing you have to call a customer and ask for money. What if they think you’re rude? Or only in it for the money? Or they never send work your way again? Every freelancer has had these doubts at some time.
But two things to remember are, you’re only asking for what’s owed. That’s not cheeky, it’s only what’s fair. Secondly, very few companies will choose to not work with you again for asking for payment, so long as you’re polite. And if the company has a policy of not paying when they’re due, maybe your time would be better spent working for someone else who honours their contracts.
6. Offer incentives
Some companies will always pay late. They’re either forgetful, or they just think the extra few days is necessary for their cash flow. If you’re sending emails and making phone calls after every invoice, you’re wasting valuable time you could be using to make money.
In this situation, offer to renegotiate terms with early payment incentives. These work by either knocking a bit off the price if someone pays early, or charging if they pay late. For example, set a due date on your invoice and say that if payment is made early, you’ll discount it by 5%.
On the other hand, for really late payers, you could state that there’s a 5% late payment fee per week. Every week the payment is late, the price goes up 5%. Either they’ll start paying promptly, or you’ll get a little extra when the money finally comes through.
7. Spread your risk
Hopefully late payers are few and far between. With any luck, this will have only happened to you a handful of times, if at all. It is still worth asking yourself what would happen if one particular customer didn’t pay – if they went on holiday for a month or, worse, went bust. Could you live without the money?
If not, it might be worth addressing how many income streams you have. If you’re relying solely on one or two companies, trying adding a bit of diversity. Take on a handful more, so that in the event of one paying late, you’ve got a backup and you can still afford to get the supermarket shopping done.
Written by Tim Aldred on May 14, 2012 and filed in Featured, Frazzled Freelancer, Freelance Jobs, Freelancers, Money, Opinion Entrepreneurs, Freelance Jobs, freelance work, freelancers, North West Freelancers