late payment fees

[gnomatron]

The company I work for have refused to pay late payment fees asked for freelancers; these fees have only been invoked after a fair 30 day period has been given in which to pay, and after repeated late payments by the company in question. The company's accounts department refuses to pay on anything other than their own terms, which often mean payment periods of 6-8 weeks; on the plus side payments are rarely made any later than that. What are folks thoughts on this situation? I think it's unacceptable and it's making my life very difficult, as I need freelance crew to run our productions.

[theatrcymraeglampy]

What kind of late payment fees are you seeking? The Late Payment of Commercial Debts (Interest) Act 1998 allows you to claim instantly compensation if you are not paid within your standard terms of:

 

Size of unpaid debt - Sum to be paid to the creditor

Up to £999.99 - £40.00

£1,000.00 to £9,999.99 - £70.00

£10,000.00 or more - £100.00

 

 

As Well as charging 8% ABOVE the bank of Englands base rate on any outstanding amounts outside of your normal terms and conditions, which for myself and everyone I know is 30 days.

 

A online calculator, more information and draft letters are available from http://payontime.co.uk/legislation/legislation_main.html

But if a company will not pay up you can take them to small claims court. It normally helps if you put a quote on your invoices, which is meant to discourage companies from paying late. A typical quote is

 

"Payment Terms: 30 Days from date of invoice.

 

We understand and will exercise our statutory right to interest and compensation for debt recovery costs under the Late Payment of Commercial Debts (Interest) Act 1998 if we are not paid within the agreed payment terms."

 

N.B. It is worth noting that you can only apply for compensation and interest if you are invoicing a company, and not an individual person.

[scjb]

All the above seconded. In addition, I put on my invoice that payment is due immediately. I don't actually expect it to be paid that quickly, but it does mean that if I get royally screwed around I will claim another 30 days of interest. Not much, but could help to pay any overdraft charges you may have incurred!

 

Another thing to note is you are entitled to this by default. You don't actually need to put anything on your invoices technically. In the absence of any mention of terms to the contrary, the system assumes 30 days.

 

It's amazing how quickly people pay when they get the interest invoice...!

 

EDIT: Spelling

[boatman]

My reading of gnomatron's post is that he works for the company which is making late payments to the freelance crews he is using and his position is being compromised by this. Of course, he could advise the crews to invoke the late payment rules, but I think he's asking for pointers to a way of ecouraging his employer to make payments on time.

 

Although it goes very much against the grain, it seems he may have to go down the route of having a crew fail to materialise for a show and then tell the money men why.

[theatrcymraeglampy]

My reading of gnomatron's post is that he works for the company which is making late payments to the freelance crews he is using and his position is being compromised by this. Of course, he could advise the crews to invoke the late payment rules, but I think he's asking for pointers to a way of ecouraging his employer to make payments on time.

 

Although it goes very much against the grain, it seems he may have to go down the route of having a crew fail to materialise for a show and then tell the money men why.

 

In which case my aplogies for misreading the post, I have been in this situation many times before and in the end we had to make the crew invoice the production companny directly until they started paying us on time, and we could then pay the freelancers.

 

It is an extra pain for the freelancers, but will also be for the production company if they are getting hassled by more than one person.

[w/robe]

I have been in this situation many times before and in the end we had to make the crew invoice the production companny directly until they started paying us on time, and we could then pay the freelancers.

 

It is an extra pain for the freelancers, but will also be for the production company if they are getting hassled by more than one person.

So in this case who are the freelances actually working for? I would not be prepared to work for you under these conditions it is up to you to chase the production company your freelances are not responsible for your cash flow problems.

 

 

Back to the original question, the only way is to convince the suits that it is worth their while to pay on time so;

 

- Are people threatening legal action, they don't have to be going to do it you can just have heard it being muted?

 

- Are good people refusing to work for you so you have to employ more crew or crew for longer hours?

 

- Are people charging you more in the first place to cover the wait?

[boatman]

Maybe my interpretation of the original post was wrong, but I think we need to wait for gnomatron to clarify the situation, before speculating any further.

[Guest lightnix]

It's always good to see a member of the management sticking their neck out for their crew - it doesn't happen everywhere and should always be encouraged - Hats Off to gnomatron :wacko:

 

I don't want to piss on anyone's bonfire, BUT (predictably)...

 

If the freelancers concerned are self-employed, then credit control is ultimately their problem and it's down to them how they manage it (as a business). There was a thread about late payment recently, where someone (else?) said their accounts dept. refused to pay late fees; probably because they know that amounts involved aren't actually worth chasing in the end - when you consider the time involved.

 

Personally, I think a good motto for freelancers is: "If they pay you late, then raise your rates" - make your late payment charge in advance, as it were, as a part of the price and leave it at that.

 

...he may have to go down the route of having a crew fail to materialise for a show and then tell the money men why.

That may start happening anyway, if the recession turns out as bad as some say it will - although we won't know until it's over. The last one cleared a lot of freelancers out of the business and the conditions on offer noticably improved, once the economy started to recover.

 

...in the end we had to make the crew invoice the production companny directly until they started paying us on time, and we could then pay the freelancers...

Steady now - that could possibly be seen as tantamount to an admission of trading while insolvent. You're supposed to be able to meet your bills as they fall due, using the profits you've made from previous jobs - not when you eventually get the money from the client.

 

It is an extra pain for the freelancers, but will also be for the production company if they are getting hassled by more than one person.

No it won't, because they never booked the crew - YOU did and that's where the responsibility for payment lies.

 

If it was my production company, it'd just be... "Ermmm... did WE book you? Gotta PO number to go with that invoice?? Oh. Sorry. Bye." Why? Because it simply wouldn't be my problem. I would start wondering though, about what sort of financial state the supplier who set their freelancers onto me was in - if they didn't have the money in their bank to pay the crew for a single show and how reliable that made them in the long term. I might even start casually looking around for an alternative supplier :)

 

So in this case who are the freelances actually working for?

Themselves - assuming they're self-employed. It's called SELF-employment for a reason, y'know ;)

 

Sorry if that sounds unsympathetic.

[w/robe]

So in this case who are the freelances actually working for?

Themselves - assuming they're self-employed. It's called SELF-employment for a reason, y'know :)

 

OK, sorry if the meaning of what I put was in any way ambiguous.

 

If you are contracting your services to one company but invoicing to another.....

or even

If your services are being contracted by one company.....

 

I hope that has cleared up any confusion.

[Guest lightnix]

OK, sorry if the meaning of what I put was in any way ambiguous.

 

If you are contracting your services to one company but invoicing to another.....

or even

If your services are being contracted by one company.....

 

I hope that has cleared up any confusion.

Thanks. In that context: any "contract" they might have, will surely be with the company who engaged their services - unless they've made a prior agreement to invoice a third party.

[DVJDeViANT]

I thought for a minute you worked freelance for one of the companies I do!!

 

its a weird thing as if you start charging late fees...you start a vicious circle of amount of work vs payment. Being a freelance contractor and working between 2/3 companies, I find myself stuck with their attitude...that if you take action regarding payment they will inevitably book you a day or even a week less at short notice... then you find yourself without work or being unable to claw back the work for those lost days as the other companies have already made their freelance bookings.

 

inevitably this always happens at the quieter times of the year....they soon cough up when they are short of good crew at the busy times!!!

[gnomatron]

Right, seeing as folk want clarification - yes, I do work for the company; I'm the crew/technical manager for a student's union, and pretty much every freelancer I employ has been on the wrong end of late payments - generally up to a few weeks beyond their 30 day terms. It puts me in a difficult situation as my crew is made up of a mix of students which we train in-house and freelancers, who are vital to make up the inevitable skills gap and to teach our in-house crew new skills. To top it all off rigging is the number one thing I need experienced freelance crew for, as we don't have anyone in house who I'm satisfied has sufficient experience or training for the bigger jobs we do.

 

Being a student union, our finance department aren't clued up in production/crewing matters, and normally deal with bars, shops, etc.; they see our freelancers in the same light as any other supplier, so this is an ongoing saga, with Bectu involvement having been threatened.

 

As for shows not happening... it's certainly a quick way to make change happen but not exactly an ideal one!

[bjkered]

For Information. There is a precedance in law that says the last set of communication overrides the previous

 

 

So for example if your Quote says payment in 30 days then that is what the law deems as payment. The supplying company would have to right back and if they accept your quote have to state in their communication to you that there terms and conditions apply ( ie 60 days) if they do that even in the small print then they win. You can right back and correct and enter a paper trail.

[boatman]

.

.

 

As for shows not happening... it's certainly a quick way to make change happen but not exactly an ideal one!

 

I agree that is a worst case scenario, however what you need to achieve is an idea in the finance department that shows may be cancelled because of this situation. Use a tool that is rife around Whitehall these days, a leak to the press. Clearly it can't come from you. However, if a few of your freelancers were to contact the student techs you use and tell them that such-and-such a show will not happen because they are not getting paid on time, then those students were to contact their representative on the Student Council who subsequently leaked the information to the Edinburgh Evening News .....

 

Just be careful in your position not to leave any paper or email trail that can lead back to you. Word-of-mouth only.

[zonino]

You could try quoting some T&C from big users of freelancers - (i.e. the BBC who's payment terms for freelancers are 10 working days - www.bbc.co.uk/supplying/freelancers)