So what does all this mean for freelancers and contractors who, up until a couple of years ago, were used to getting paid on time?
Well, it's certainly fair to say that clients and recruiters are being much more frugal with their cash, but it's not all bad news. Those of us who have been in this game for a while know that chasing unpaid invoices is part and parcel of being a freelancer, and with the right approach you can usually get your hands on your money......eventually.
So if you are currently struggling with a mountain of long term debtors, juggling your 'relationship' with the client against a total lack of payment, here's 3 ways to get paid on time, every time.
1. Try speaking to the person who actually makes the payment. I know this sounds almost too simple but you'll be amazed how effective it can be, particularly if you've been dealing with your recruiter or manager direct.
If you don't get your money straight away, you'll at least have a better idea of time frames which will help you manage your short term cash flow. Don't be embarrassed to make follow up calls if the money hasn't come in when agreed. After all, you've signed (or should have signed) a services contract explicitly stating the payment terms, which they will by now be in breach of.
2. Take a good look at the invoices you are sending out. Are they too generic or too safe? Most invoices contain all the usual information (the client's / recruiter's name, invoice date, services provided etc.) but don't stop there. Why not add an extra 10% penalty for late payments or perhaps even shorten your billing cycles?
Once you've sent through your invoice, phone the accounts payable team to ensure that it's been received safely and added to their payment system. If necessary get them to send you an email confirming this. It may sound pedantic, but the last thing you want to discover is that the invoice was never actually received and you effectively have to start the process again, 30 days down the line.
3. Requesting an upfront payment can be an effective way of reducing the burden on your cash flow. Asking for an advance may seem a little "uncorporate" at first to some clients or recruiters, but we're all operating in a different world now so it pays to be prudent. Requesting part or full payment is especially important if you are dealing with a person or organisation that has a reputation of being a difficult payer.
Learning how to get paid on time is hugely important to the success of your career as a freelancer. Always remember that It's your money, not the clients, and you're certainly not in the business of providing interest free loans. Don't be afraid to fight aggressively for what's yours and if necessary get some legal advice and issue formal demands as a late resort.
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