I’ve had many positive experiences when it comes to payment – upfront, early etc.
I’ve had neutral experiences too, where some really valued clients of mine have paid but late; things slip and things get resolved – that’s life / business.
But I’m going to focus on one particularly, very negative experience I had with an events marketing agency.
I was frustrated with the time I had to invest to recover the money, and concerned that their brazen lack of respect was so obviously well-practiced that it would happen again to someone else.
In a nutshell:
- Two days of consultancy required on a pitch (brought in by a well-respected & trusted ex-colleague, although none of the below is any of her wrongdoing).
- A very quick turnaround.
- No time for faffing about with my usual terms (perhaps an error in hindsight).
- But I did get a light-touch statement of work w/ payment details signed (which saved my bacon).
- I completed and invoiced the work on 15th January 2024.
- I flexed my standard (NET14) terms to 30 days for them – due 15th February 2024.
- Despite having the details on my invoice confirmed / approved, they had me revise it a further two times.
- No payment by the 15th Feb, very little communication, and, to cut a long story short, no payment until 8th March 2024 (nearly two months after completing the work).
- They tried to place the blame on me for not filling in a new supplier form that they themselves had not supplied.
- And they also elected to waive the late payment fee themselves (I managed to recover most of it in the end).
It affected me more than it should.
I was distressed, not so much on the financial side of things, but for the simple fact that someone would behave this way / be running a business this way and choose not to pay me when I had helped them win the pitch / new business (far exceeding my fee).
I was frustrated with the time I had to invest to recover the money (which outstripped the value of me completing the work in the first place) and concerned that their brazen lack of respect was so obviously well-practiced that it would happen again to someone else.
I can’t say that things have improved with clients paying on time, the longer I've been in business. It takes a rare breed of client to pay in-line with what you’ve agreed or better. And I get it – clients are busy, layers of bureaucracy, cash is king etc. etc.
But things have certainly improved in terms of my own internal practices / policies (which, in turn, lead to fewer instances of the above).
The biggest improvement has stemmed from speaking to others in a similar position, sharing experiences with one another, and putting better safeguards in place to protect myself and my business from people as described above.
Most importantly, my mindset shift when it comes to getting paid for work that adds value to others – goodbye to the benevolent British attitude towards money that doesn’t serve any of us well. Do not feel awkward talking about it or demanding what is rightfully yours.
Recommendations from Tom on avoiding late payments
Here are three scenarios I’ve experienced and how I tend to manage them:
Do not feel awkward talking about it or demanding what is rightfully yours.
- If you’re working on a day-rate basis, issue invoices on a weekly basis
- If you’re working on a project-rate basis, invoice 50% upfront and 50% on completion
- If you’re working on a retainer basis, invoice upfront to reserve the resource and bill for any additional time (agreed in advance)
And in all instances, reduce your terms to NET14 or better (if you’re 30 days, you’re being paid in 60; if you’re 14, you might get paid within 30).
Independents / freelancers / consultants cannot and should not bankroll bigger businesses. End of.
