A freelancer’s view on the nightmare of missing payments

 30 October 2014

In 30 years as a sole trader, only one thing has made me seriously doubt my desire to carry on in the creative sector: the uncertainty around getting paid in full and on time. It's time for both sides to play their part in ending the nightmare of missing payments.

"It's so easy for freelancers to suffer a 'perfect storm' of late payments." (Image: Acme Studios/Hugo Glendinning, 2014)

I started out working as an artist in education, and in my 30-year career have earned my living as a freelancer in a variety of roles.

Even now I have a number of clearly defined, but quite different, income streams: writer, coach and speaker. The common thread is the business of creativity.

Recessions have come and gone, along with a variety of governments of varying colour, always chopping and changing the arts funding landscape to suit their policies.

None of this has swayed my commitment to the creative sector. The only thing that has is the pain, fear and anxiety that is so commonly a part of getting paid as a freelancer.

Payment speed can make or break a freelancer

In an environment where self-employment is growing exponentially, and a huge part of that growth is in the creative sector, speed of payment can make the difference between freelancers surviving or not.

I think organisations need to recognise that freelancers need some basic protection. At the very least to make payment terms explicit and then stick to them. 

It's so easy for freelancers to suffer a 'perfect storm' of late payments through no fault of their own.

Freelancers must sharpen up too

I also feel that freelancers need to sharpen up their financial practice to decrease opportunities for misunderstandings and late payments. Parties on both ends of the transaction have a duty of care to get this right. 

Speed of payment can make the difference between sole traders or freelancers surviving or not.

In the last two weeks I have had to fight for payment from a local authority who asserted the right to pay at the end of the month following the month that the invoice was submitted. That's up to 60 day's credit. The problem lies in not knowing reliably when payment will arrive.

As a freelancer, the only option is to become Rottweiler-like in the pursuit of proper contracts and payment. I’m sure some of my paymasters over the years have found my approach ‘robust’ to say the least.

But I’m convinced that it is the quality of attention you pay at the point of contract, and then again between invoicing and payment arriving, that makes the difference between survival and business failure.

Psychological obstacles to freelance pay

As a creative business coach I notice a number of pain points and psychological obstacles that block my clients from asserting their rightful positions.

Freelancers – both at the start of their careers and at the significant stages where they move up a gear in terms of fee expectations – have trouble with self-worth.

This translates into a failure to charge properly. But more significantly, it often results in a failure to push and negotiate effectively when it comes to the process of getting paid.

The only option is to become Rottweiler-like in the pursuit of proper contracts and payment. 

I know from bitter personal experience that some large organisations and local authorities clearly understand these fears and blocks but often do little or nothing to ease the pain. 

There are exceptions to this rule, and I congratulate those organisations on their enlightened approach.

The one thing that would help enormously would be for them to recognise that holding back relatively small payments can make a huge difference to a sole trader's cash flow.

I’ve had people say 'but its only £300'. When I ask how they would feel if their pay packet turned up £300 short at the end of the month, they change their tune.

It can take two or three ‘small payments’ to go astray at the end of any given month to turn an inconvenience into a crisis.

4 steps for getting paid as a freelancer

1. Clarify expectations in both directions

​When you are discussing the details of the work and how it’s going to be delivered, include payment in that discussion. Don’t leave it until later because it’s amazing how easily assumptions get made.

Get a letter of agreement, if not a contract that sets out all the detail. Include when and how you need to invoice and when you can expect to be paid.

2. Don’t hang about

Get the invoice sent to them by email, by post or by both as soon as you can. Getting an invoice into the system early can save a lot of grief later on. 

3. Make sure your systems align with theirs

Keep a record of all invoices you send out and then follow up.

Write down when you send them, including the invoice number and the amount due. Half way through the 30 days, ring the finance office to check the invoice is in the system.

I’m always astounded by just how many people don’t really know what an invoice should have on it.

At the same time, check their anticipated payment date. If what they say doesn’t tally with the contracted payment terms, ask for clarification. If they say something vague like 'it’s still in the system', or 'it hasn’t been authorised yet', get straight in touch with the individual who worked with you initially.

Being rigorous lessens the chance of you going short at the end of the month. You may be on friendly terms with the person who engaged you, but the system that pays you may be in a different department or even outsourced altogether.

Follow everything through from start to finish. And for goodness sake, remain calm and relentlessly polite.

4. Make your invoices clear and simple

I’m always astounded by just how many people don’t really know what an invoice should have on it.

If you are unsure, do some research. At the very least, double check with each new contract, as some ask for extra detail such as your HMRC self-assessment number or VAT status (even if you are not VAT registered). Others change the rules from time to time.

Pete Mosley writes extensively about the business of creativity. He has written a second book The Art of Shouting Quietly – a guide to self-promotion for introverts and other quiet souls