New client - late payments - wwyd?

[LMW1990]

I have recently returned to freelancing - relevant because I am still trying to build my client base and turning down work is something I would rather not do. But I also can't work for free...

I have a new client. As with all new clients, my payment terms are strictly 7 days and I have clients agree to this prior to me starting work.

So far I have invoiced this client 3 times for relatively small amounts. All 3 invoices are overdue.

I have politely chased and request payroll contact details. On Tuesday I was told a payment would be made. Then on Wednesday it couldn't be paid Tuesday as they could not print my invoices (but they could view them on a screen so I'm unsure what difference that made) and asked me to provide it to them in a different format, which I did. Then yesterday I was told Payroll had left early (this was at 3pm) so they didn't know the status of the payment. This morning they stated that payment was made yesterday - so it stands to reason that the payment must have been made prior to 15:30 if they left early?

I have just chased the remittance to be told that NO payment has been made. Payroll are behind. So why the blatant lies?

Since the first 3 invoices, I have undertaken a larger batch of files, in good faith, for them which are due back to them today and due to be invoiced today. They also asked me this morning to take on more files!

I have emailed to say this is not acceptable. The money must be in my account today. So far no response.

I'm at a loss what do I do? Do I continue to work on the files due back today (minimal work left to do) or do I hold them effectively hostage until they make at least one payment to me?

I understand this comes with the freelancer territory but it's the lies that have made me most angry. I cannot afford to work for hours and hours for free.

I'm afraid you might have to write it off as a bad debt and not continue to work for them. How much are we looking at here?

@Ohsolomio - the amounts of the first 3 invoices are negligible really but the one I'm working on now will amount to a few hundred quid which is substantial to me in the early stages of my business. The work load has slowly increased (I presumed because they were happy with my work) and so if it increased at the rate it has been I could be looking to invoice them £800 per month at least. I'm so annoyed at the sheer cheek of it all. Knowing they lied to me and still asking me to do more work today!

You can charge a late fee plus interest.
www.gov.uk/late-commercial-payments-interest-debt-recovery
However you might need to wait 30 days unless you have a signed agreement to the 7 day terms?

I would not do any further work for them and let them know why, but if they pay up, going forward I would state that you now add interest every day for overdue invoices.
I also have to invoice for my work and a couple of times have had to threaten adding interest so it might work for you.

@TangelaHair - nothing signed but an email agreement. The company are in ROI too to make matters worse. I have other international client who do pay on time so I'm not put off by that, I just don't know where I stand on recovering anything.

What should I do with the files I'm sitting on? Tell them they can have them once I get paid? It might light a bit of a fire under them if they have client deadlines to meet? Or they might refuse to pay me at all because they are late....gaaaahhhh rock and hard place

I wouldn't do anymore work until they pay you.

I agree with Bagpiss. I wouldn’t do anything else for them until payment in full for all outstanding invoices are paid in full.

You need to come down hard now otherwise they will get even more late with your payments if they can get away with it.

You're right - I'm so annoyed though that I have spent hours of my time on the work sitting here. Perhaps I should return this batch and invoice - in the knowledge it will be late/ never going to come. But then refuse the files from today?

Would they be able to replace you easily? If not, definitely hold on to the latest work until they've paid what they owe you.

Sounds like they have a cash flow issue though. Maybe give them one more chance and then cut your losses and use your time to find a better client?

If they really need you, could you ask for payment in advance for a while until you've established the relationship a bit more?

@legomonkeys I assume they have a deadline to get these files back to the client and I assume it's Monday. With tomorrow being Saturday I think they would find it hard to find someone to take on this level of work at such short notice.

Potentially. In which case, I'd rather not be involved.

I just find it so weird to lie. I usually just get radio silence from client's who can't afford to pay.

Going forward, they could replace me but my industry is saturated with people who lack the actual skills and try to outsource to other countries which causes major issues for clients (when the person working doesn't speak English as a first language). Clients tend to struggle at first to find a person with the right skill level who they get on with and trust.

I also think the fact that they have come back to me to do more work, knowing they haven't been honest with me or paid me, indicates that they don't have anyone else to carry out the work?

Some places run to a 30 day cycle, and it’s difficult to get them to work to any other time frame. It’s a pain and it causes problems. But if the whole organisation is set up to a 30 day pace it;s wishful thinking to expect them to change for you.

It could be that. Or it could be they have cash flow problems.

I would sit on new work til 30 days beyond the date of the first invoice. If no payment by then, give up on them. If they do pay by them, decide whether you can adapt to a 30 day cycle or not.

The first invoice is over 30 days now and if that were the case they should have said this from the off when I made my payment terms clear and they agreed. Further, why not tell me that instead of a long string of excuses and lies? Surely that would be a much more professional response, with a reason, than telling me absolute porkies?

The project manager is probably not aware of the T&Cs set by finance or vendor management. I work for a company that uses hundreds of freelancers every month. We pay at 30 days. There's no way we could make an exception for a particular freelancers, as payments are handled by an external company and they follow a strict process.

I'm sure they'll pay you, but 7 days is really unusual. When the project manager agreed to that, they were probably unaware and just trying to please their clients.

If you like the company, I'd wait.

In your terms on email, did you have consequences such as interest laid out?

Did you have the terms on the original email?

Maybe they're struggling. Given that they're in another jurisdiction, I probably wouldn't continue to work for them if they haven't even paid the +30 day invoice.

God, you’re hard work OP. If I was your client and you spoke to me the way you’re speaking to people who are trying to help you, I’d slow lane your invoices too.

I guess you are doing copywriting or translation. If that's the case, your contact is very likely a junior PM with very little authority. He should not have agreed to 7 day payment.

Apologies if I'm mistaking. It's just not usual that the person who talks to the freelancer has any power over when and how invoices are paid. That's not their job

@greenandbluebutterfly - Yeah I suppose this could be the case. I did wonder about the outsourcing payroll as they don't seem to want me to talk to them directly to resolve the issues. But then in some emails they keep referencing a payroll manager who has gone home early. I do enjoy the work they provide. it's just frustrating.

@Ohsolomio - Admittedly no consequences, so I think I need to look at that. I guess the consequence will be no more work from me on this occasion. Potentially struggling I guess, but they seem to have an abundance of work for me to do and I know they offer other services (which I don't provide services for) so presume I'm not the only freelancer they use.

@ZazieQueen - not sure what you mean here. How have I spoken to people? I have just answered questions and made some guesses as to why this might have occurred. And trust me, despite wanting to rant and rave at time, I remain professional with my clients.

I would definitely hold the files hostage until they pay up to date.

@greenandbutterfly - you are correct . My initial contact was with the owner of the company but he bowed out of things as soon as I began getting work from them and I haven't dealt with him since (cc'd into emails but does not reply)

It is irritating. They may have cash flow issues. I'm not freelance but in my firm, we do operate a "pens down" approach where clients don't pay invoices / provide money on account of costs. This does include not handing over work that has been prepared. If a client is being serious and wants you, it may prompt the relevant person to kick the accounts team into touch.

In the meantime, if you do elect to formally demand payment under The Late Payment of Commercial Debts (Interest) Act 1998 you can charge the following in respect of each invoice:

1. Interest at 8% above base; and
2. Compensation £40 for invoices less than £100, £70 for invoices with a value of £101 - £1,000, or £100 if the value of the invoice is over £1000

Thanks @greensgreens that's useful info going forward and I'm definitely keen to improve my T&Cs before taking on any new clients. Out of interest, does this apply to clients outside the UK?