How to avoid clients who don’t pay on time
Check their history, listen to your gut and get a watertight agreement in place
Freelance life can be precarious enough without clients who pay late or not at all.
There are legal protections in place (see below), but the best outcome is to avoid late payments in the first place.
For UK based businesses, you can look them up on the Companies House database and check their latest accounts. Are they in a hole? For instance, if you were to take a look at Debenhams, it should raise more red flags than a Chinese military parade.
The behaviour of the client can also tell you a lot in advance. A potential client that makes a ridiculously low payment offer is unlikely to appreciate the level of work and expertise required, so probably will be a terrible client anyway. It’s also the sign of an amateur (or worse) who doesn’t have the budget to get the job done properly.
Listen to your gut if something feels off – if a client doesn’t want a contract in place, or refuses to commit in writing what is expected from you.
If you still want to go ahead, then getting at least half the payment upfront should help you avoid getting burnt too badly.
Agree in advance
Another common issue is clients delaying the completion of the work. Perhaps it needs approving by a committee who only meet once in a blue moon, or it needs a seventh round of revisions, or you’re waiting for one last piece of information that never materialises. Your invoice can’t be late if you can’t finish the work!
To avoid this, set out your expectations from the beginning and get the client to agree – limit the rounds of revisions, agree turnaround times for approvals, set deadlines for requirements. Learn from each bad experience to make future contracts ever more watertight.
Speaking of contracts, make sure you read them closely. This is for many reasons, but the payment terms should be laid out. If they aren’t, the default payment date by law is within 30 days after receiving the invoice or the service is delivered (if later).
This page on gov.uk also explains that you can claim interest of 8% above the Bank of England base rate and a recovery cost of £40-100.
Stand your ground
Unfortunately, big companies often take advantage of the imbalance of power when it comes to payment terms. Some will insist on up to 60 days after invoice, or worse. A particularly pernicious problem, common in journalism, is payment on publication. This puts all the power in the hands of the editor, who can decide to hold back an article for months. I can’t imagine this would be considered a legally fair contract if the roles were reversed (but then I’m no lawyer).
Although a big company might have power over a single freelancer, whole industries depend on freelancers as a community. We all need to play our part in resisting unfair payment terms to stop bad practice becoming the norm.
You might also be interested in this article: Where to find well-paid work
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