Chasing Unpaid Invoices

[top-cat]

Sorry to start another topic here, I hate the office in real life so I don't know why I'm giving it so much interest here!

 

But for the first time since becoming a freelancer, I seem to be up against more and more non-payers. I don't know if this is a sign that I'm too easy going as a person, that companies are so busy their admin is getting slack, that all companies like to try it on and see what happens, or what... but in any case I have 3 grand locked up in well overdue invoices and I've never before had to deal with it.

 

I've been diplomatic. I've sent polite reminders, I've called with a sympathetic tone, and if I get an answer at all, I only get given some bull about how it's all set to be done on the next bank run. Is it only us freelancers who do internet banking or something?

 

My two questions are - for those of you who have been there:

 

1) What do you do about chasing up unpaid invoices with a company whom you'd still like to remain on good terms with as you think there is still hope, and they're just being slack in the admin department? ; and

 

2) What do you do about chasing up unpaid invoices with a company whom you couldn't care less about, have no interest in ever working for again, and simply want to get what you're owed and scoot?

 

I have no real experience with the legal system apart from that every time I've been involved with it, it's been expensive. I just hoped that somebody with more experience in this realm might give me some guidance on what my options are... and that in due course such a thread might become a useful resource for other freelancers in the same position?

[kerry davies]

A few questions first. What Terms and Conditions have you asked for on the contract and/or invoice?

What do the various companies/clients say are their T's and C's?

What time delays have there been?

Have these been private individuals or companies and if the latter what size companies?

 

We have done this before, I haven't searched, and all the above questions make a big difference to how to proceed. One

Two

Three

[David Lee]

If they are very overdue with no communication with you or offer of repayment you shouldn't work for them again as you are just building up debt.

 

Unfortunately you really should be looking at CCJs with late payments of debt act. Usually just threatening them with a CCJ will work. Don't expect them to book you again.

[top-cat]

A few questions first. What Terms and Conditions have you asked for on the contract and/or invoice?

What do the various companies/clients say are their T's and C's?

What time delays have there been?

Have these been private individuals or companies and if the latter what size companies?

 

We have done this before, I haven't searched, and all the above questions make a big difference to how to proceed. One

Two

Three

 

With regards to Ts and Cs, I think the problem often is that you submit your details as a freelancer, they call you, "can you work a shift 8am Wednesday at the Hilton" "yeah sure" "what's your rate?" "two hundred" "great see you there" - there is no contract. There are no Ts and Cs. It's a your-word-against-theirs agreement. Do you have anything to stand on in that scenario?

 

In all instances we are talking at least 1 month overdue, and they are all formal LTD companies.

 

Only thing is that in 3 of the 4 instances, I don't want to do anything to offend them. I suppose, all I can really do, is keep asking nicely. I think I just wondered if anyone had any tactics to encourage paying up without offending?

[ImagineerTom]

In the absence of written terms being issued by both parties, the courts default to assuming 30days to pay an invoice is the norm.

 

There's no way to tell someone they've forgotten to pay you without "offending" them at some level - it's business. Ring them up, don't pussy-foot around the issues, remind them they're late, ask them when they're going to pay and if they don't then instigate legal action. DON'T believe that you "need" to work with companies that consistently pay late - it's a sign of sucky business practises on their part; either their account department is terrible at getting their clients to pay them on time or their cash flow is so bad (ie they're operating so close to the knuckle) that the only way they survive in business is by stuffing as many people below them as possible. It's the companies that consistently pay late that one day will go bust owing you thousands of pounds that you will NEVER recover.

 

In business cash(flow) is king - always chase business with people that pay properly, always run away from business with people that avoid paying you as you are effectively subsidising their business and will pay for it one day.

[top-cat]

For sure Tom, I agree with your principle, that said I think in some circumstances you have to think outside that box and look at what there is to gain and what there is to lose.

[David Lee]

You are dealing with LTD companies. You need to do what is right for your business.

 

If they aren't paying then you need to stop working for them and do some serious chasing. Again, the only way to gain their attention if they are ignoring your requests is through legal channels, end of.

 

Look up Late payments of debts act and start charging them interest and admin fee.

 

If you feel you must work for them again and go softly (not advisable) then at least get your T & Cs through to them (and signed by them) and ask for payment to clear down debts and future payments in advance. (I have successfully managed to get one company to pay in advance due to their poor payment history)

 

Edit to add - there can and always should be T & Cs. On your invoice should be some, but in your analogy it would go:

 

Can you work on shift ...

 

Yes, I will email you through my T and Cs. Can you print them, sign them, scan them and email it back - or at least email back confirming acceptance of your T and C.

[timsabre]

Turning up in person and asking for payment is often a good way of getting their attention. It's hard to say no to someone who is standing in front of your desk. Depends on the size of business obviously.

Otherwise frequent polite chasing on the phone.

[cedd]

A letter sent by recorded delivery is often a good starting point. Only costs a few quid but if you state in it that it's your final warning before proceeding with court action then it's quite handy should you proceed with a CCJ (which is dead easy to do!).

Think about who you send the letter to. I sent copies to the finance director, the managing director, and the person who'd booked me for the gig.

[ImagineerTom]

For sure Tom, I agree with your principle, that said I think in some circumstances you have to think outside that box and look at what there is to gain and what there is to lose

If you're quite happy to work, be f*cked over regularly by your employer and run the very significant risk that one day they'll go under owing you vast sums you'll never recover then would you like to come work for me?

[Jivemaster]

Being a freelancer demands business skills and time for those skills. Especially if you intend also to engage freelancers then you NEED to get the REAL money coming in, not essentially Queens Head money but something the bank will honour. Remember also that your freelancers will expect payment on time, or they will not work again for you.

 

Get a good relationship with your work providers -meet them! Talk terms understand whether they mean 30 days from job, invoice or month of invoice. Beware open purchase orders they add another trifle each month to delay you sending an invoice for work already done.

 

Ultimately if someone doesn't pay then DON'T work for them again.

[musht]

Remembering the amount of companies that turned into into phoenix companies, er, `pre pack administration` a few years ago, some of your creditors may be reading sites like this:

 

http://www.liquidationmadeeasy.co.uk

 

To even up the balance , this might be handy:

 

http://www.thomashiggins.com/pages/letter_before_action.aspx

 

Know a mechanic who now offers his late paying customers credit at same rate as Wonga.com.....

[top-cat]

Being a freelancer demands business skills and time for those skills. Especially if you intend also to engage freelancers then you NEED to get the REAL money coming in, not essentially Queens Head money but something the bank will honour. Remember also that your freelancers will expect payment on time, or they will not work again for you.

 

Don't confuse this thread with my other. Just because people aren't paying me on time, it doesn't mean I won't pay others on time, does it?

 

If you're quite happy to work, be f*cked over regularly by your employer and run the very significant risk that one day they'll go under owing you vast sums you'll never recover then would you like to come work for me?

 

No. But if you have a company who owe you £200 and have historically given you frequent 15-day gigs doing work you enjoy in nice places at good rates, I think you would be a bit of a tool to cut your ties with them, in favour of going banging on other peoples' doors for work which you might not enjoy so much and/or might not pay so well but pays a few days earlier.

[Jivemaster]

Yes, knowing a local company (not ents industry) who phoenixed several times affording a director his personal helicopter from the proceeds, get in there NOW sort out the office work sort out the business inbound and the money inbound and set and follow your T&Cs urgently.

 

If you stop paying for your car insurance -they stop insuring you. Why work for someone who isn't paying you.

 

I discovered a while ago that the "Girly" party planners get a discount from the venue off a future function, SO they book ten corporate Christmas parties and then get their wedding reception for free -then they leave the industry. They put out a LOT of business but they then vanish to a new name, new address and new phone number. IF you wait long enough you lose out on the money.

[David Lee]

 

No. But if you have a company who owe you £200 and have historically given you frequent 15-day gigs doing work you enjoy in nice places at good rates, I think you would be a bit of a tool to cut your ties with them,

 

If they have historically paid you those good rates and it is only one invoice which is late then you can take a pragmatic approach and pester them politely, though I would still probably not work for them until that debt is cleared.

 

in favour of going banging on other peoples' doors for work which you might not enjoy so much and/or might not pay so well but pays a few days earlier.

 

That is the nature of business. Some gigs are good, some are rough. Personally, I have kids and a mortgage so cannot be too fussy. As long as they are not dangerous I don't mind too much.