Lessons learned as a freelancer when it comes to getting paid

by Nicola Temple | May 5, 2016

As a freelancer you get used to the flow and ebb of money and you just hope that the former outweighs the latter. This is part of the package and we all learn to work with it. However, today, as I have spent the morning chasing a payment from three months ago, I feel the need to share my frustrations and the lessons I have learned and that continue to try me.

Let me start by saying that for the most part I have never had an issue with payment from a magazine or newspaper. I think they are used to working with freelancers…heck, most of them have been freelancers! They know the score. They pay on time. However, in between the sporadic work of media, there are the bread and butter jobs that I do – the work with universities and private industry, even the odd publisher. This is steady and it helps pay the bills. Well, it WOULD help pay the bills if they actually paid. So, here are some tips to those starting out…

TIP 1: Get the paperwork done immediately

For those of you who have never been on the receiving end, let me give you the run down of how this works. There is often a great deal of paperwork that needs to be filled out in order to be set up as a supplier with the institution. As a self-employed freelancer, I need to go through the tax office to prove to them that I don’t warrant employee status and then there’s setting up account information and all of the necessities. This is time consuming, but generally straightforward.However, if you’re new to this you may not realise the rigmarole involved and then submit your first invoice only to learn that this all needs to be done.

Once the paperwork is submitted, be advised that it must be aged appropriately in someone’s Inbox. I’m not sure why this is, but it seems to be a universal system. Once the salaried administrator has decided that your forms have aged long enough, then there is usually a second (or third) hurdle that they put under the guise of ‘security measures’ where you have to either phone in or email banking information to various people several times so that by the end of it, you feel anything but secure. This is a system that is designed by people on a salary. Be patient with them, they don’t understand.

My advice is to therefore start this process as early as possible. The minute you have an agreement with an institution ask them to give you the forms for setting you up as a supplier (or whatever their specific terminology is). Legally, you have a right to charge interest on monies unpaid after 30 days unless the terms agreed state otherwise (and lots of institutions will have 60 or even 90 day terms, so check). However, this is from the date that an acceptable invoice has been received. It doesn’t include all the set up time, so get this done long before you’re ready to submit a first invoice.

TIP 2: Get personal contact information for someone in accounts payable

Inevitably after you have passed the security measures you will be told to go ahead and submit an invoice to a generic accounts payable email address that may or may not give you a confirmation upon receiving your email. This is what I like to call the ‘black out period’. It is the time between submitting the invoice and when you expect to get paid that you are deliriously fooled into thinking all is well and someone somewhere is actually processing your invoice with the intent of paying you. This is rarely the case.

Once thirty days have passed and there have been no payments to your account, it’s time to follow up and it’s best to do this with someone specific. Phone where possible and speak to a real person. Ask their name if they are helpful and write it on your wall in bold letters. Be nice to them – they are operating within a broken system – and they are more likely to be helpful. They will help you identify the fact that someone somewhere along the way has:

  • mis-typed a digit in your account information
  • given you the wrong purchase order number to put on your invoice
  • failed to submit it by the deadline for payment that month despite having received it two weeks before the deadline
  • edited your invoice in an attempt to be helpful, but in doing so made the invoice invalid

These are all things that have happened to me. Every one of them an error on their end. Every one of them ended in ME not getting paid on time. However, it is a personal contact in accounts payable every time that has helped resolve the issue – so get on a first name basis!

TIP 3: Be clear on terms – yours and theirs

Different companies have different policies on payment. As I said earlier, some may be very frank about the fact that they don’t pay invoices for up to six months. It’s good to know this from the outset and then you can work around that. Some institutions have deadlines that they adhere to – invoices need to be submitted by the 5th of the month in order to be paid by the 26th for example. It’s important to know this and you will have to ask because people rarely volunteer this information. I’m unclear whether this is because nobody really knows this information or whether it’s because they like to keep their suppliers guessing.

You can also be clear on your terms. Put it right on the invoice that if you don’t receive payment after 30 days you will start charging x% interest. There is more information on this on the UK Government website for those in the UK.

TIP 4: Get a down payment on your work

An inordinate amount of time can be spent chasing payments, making phone calls etc. Make sure you incorporate this administrative time into your billing and whenever possible bill for a portion of the job right away (i.e. 50% now and 50% when the job is done). It makes you a little less bitter about all the paperwork and it helps work out any bugs in the payment procedure early on. Chances are you won’t get that first payment until you’re done the work anyway, but it’s a good idea in theory.

TIP 5: Save for a rainy day

It goes without saying that whenever you have ebb and flow type work, it is best to put some of the money away when things are flowing to cover the ebbs. It’s creating a financial buffer and it is essential for the freelancer, but admittedly not always easy.

Alas, I must continue to resolve the mystery of this latest payment. I started the process during the first week of February..it’s May. One can only hope. Good luck.

 

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