Going freelance is a big step for anyone. It takes a not insignificant amount of confidence to leave the cosy 9-to-5 world and step out on your own, but landing that first client is a feeling like no other. However, a common problem for first-time freelancers is Invoice Anxiety. When should you invoice? What should you do if your client doesn’t pay straight away?
Its perfectly understandable – you didn’t go freelance to be an accountant, after all. You probably never had to delve into the murky world of finances in your previous job. There are two key points to remember.
Firstly, its your money, and you’ve earned it.
Secondly, you are doing your client a favour by reminding them – the onus is on them to pay up, as stated in your contract.
With that in mind, onward…
When should I invoice?
It may seem like a no-brainer, but invoice as soon as the work is complete. If possible, attach your invoice with the last piece of work you send over to a client. Add a casual “Oh, my invoice is attached” note at the bottom of the email. It may seem a little impolite, but wait a week and your client may have moved on to other things and your payment could get delayed. Hit them with the paperwork while you are still front-and-centre of their brain.
They didn’t pay straight away! How do I remind them nicely?
The first thing to remember is not to panic. This is fairly usual – this is why we have payment terms. As we found out recently, big corporates are the worst offenders for late payments, sometimes keeping their freelancers waiting 60+ days. Just because you didn’t get immediate payment doesn’t mean you’re being shafted. Plus, you remembered to include late payment penalties in your contract, didn’t you?
As a rule of thumb, I send a polite reminder once 50% of the payment term period has elapsed. For example, if the terms are 28 days, I’ll shoot off a friendly reminder if there’s no sign of my invoice after two weeks.
They still haven’t paid – what do I do now?
The important thing to remember is you’re still probably not going to get screwed. Despite the horror stories you may hear, the chances of your client actually going out of their way to not pay you are fairly slim. Most likely your invoice has been lost under some paperwork, or a bookkeeper has the flu.
Send another, slightly more serious reminder about five working days before the payment deadline – maybe use big red lettering – and remind the client of any late payment penalties they will incur. If working for a large corporation this will probably speed things along, as no lowly desk jockey wants to be responsible for their employer being fined.
If your payment deadline comes and goes and you still don’t have your money, it may be time to get serious. This is at your discretion – if it is a client you know well who you honestly believe is just guilty of a lack of organisation, you may choose to give them some leeway. If not, its time to send a final notice letter and get on the phone.
They’re ignoring me! Help!
Time to check out our guide to Credit Control!
Photo by Kevin Spencer – CC
