Freelancer invoice / Client payment etiquette

[Roodogg]

Hi. I have recently completed my first proper independant freelance job for a fairly prestigious interior design company and surprise surprise they have not paid the invoice. (11 days after due date)

 

The work was signed off (They seemed quite happy plus I did small extras for free).

 

I sent an invoice three days later with 15 days to pay. 20 days after no payment I composed a polite email to the director reminding it was overdue. I received nothing but a 'read receipt'.

 

It is now 5 days later with no payment.

 

Unfortunately, with quitting my job almost two months ago to complete this first job, I am now maxed out cash-wise and my phone's been cut off so can't ring them.

 

As I am new to freelancing, I just want to know whether 15 days is too short or whether this is standard client behaviour. (I'm told it is).

 

I am in the UK in case that matters.

 

Thanks in advance for your views on this.

[Matt Sugden]

I have 10 days on mine, and I get on the phone on day 11, unless it is a trusted client. I've been lucky enough to only ever have one non payer. I dealt with them by speaking to the estate agent and telling them that they are not authorised to use the images and are in breach of copyright until they pay. He still didn't pay, so I took him to small claims court and he paid up straight away. I don't expect to ever work with him again but to be honest I couldn't care less, who wants clients that don't pay.

 

I should add, it is worth finding out why they have not paid, in my case the guy said he had cash flow problems, well he shouldn't have hired me if that was the case, as the turn around was about 5 days. Bigger companies may only like to invoice every 30 days. if that's the case you could cut some more slack.

[Tommy L]

Hi. I have recently completed my first proper independant freelance job for a fairly prestigious interior design company and surprise surprise they have not paid the invoice. (11 days after due date)

 

The work was signed off (They seemed quite happy plus I did small extras for free).

 

I sent an invoice three days later with 15 days to pay. 20 days after no payment I composed a polite email to the director reminding it was overdue. I received nothing but a 'read receipt'.

 

It is now 5 days later with no payment.

 

Unfortunately, with quitting my job almost two months ago to complete this first job, I am now maxed out cash-wise and my phone's been cut off so can't ring them.

 

As I am new to freelancing, I just want to know whether 15 days is too short or whether this is standard client behaviour. (I'm told it is).

 

I am in the UK in case that matters.

 

Thanks in advance for your views on this.

 

I think you're being a little naive. Most companies work on a 30 day accounting cycle. If you invoice at the end of the month it may well go into the next months accounts. So 30 days is about average. I wouldnt get wordy with a client over an invoice thats less than 60 days old.

Oh, and another thing you should be aware of is that some projects require a 'draw' from a loan account which is held by a financier, usually a bank or a real estate development loans company. The developer usually collects a whole bunch of invoices before going to the draw, which makes the waiting game for payment kind of unpredictable on larger jobs.

Edited October 14, 2011 by Tommy L

[aristocratic3d]

I work when I get 50% upfront. as they are getting me in cheap so pay some upfront get the job done and then pay the remaining.

I think you're being a little naive. Most companies work on a 30 day accounting cycle. If you invoice at the end of the month it may well go into the next months accounts. So 30 days is about average. I wouldnt get wordy with a client over an invoice thats less than 60 days old.

Oh, and another thing you should be aware of is that some projects require a 'draw' from a loan account which is held by a financier, usually a bank or a real estate development loans company. The developer usually collects a whole bunch of invoices before going to the draw, which makes the waiting game for payment kind of unpredictable on larger jobs.

[neil poppleton]

30 days in standard in the UK.

[Dan Norfolk]

I work when I get 50% upfront. as they are getting me in cheap so pay some upfront get the job done and then pay the remaining.

 

Does this work, asking for payment upfront? Although I hear most rendering studios ask for 20% deposit, most architects don't really pay up. They pay when they get paid seems to be the attitude, might be a different case for developers and builders.

 

DTM

[lee81070]

On larger jobs I tend to break the invoices up into smaller chunks, especially if the job will take longer than 4 weeks and submit them at strategic points throughout the course of the job. I always start with a "deposit invoice" of usually 15-25% of job total for new and existing clients and once they've made the initial payment, work will start. It secures commitment from both parties and have never had a client default on payment.

[Scott Schroeder]

Unless you put it in your contract that you expected to be paid within a set amount of days after completion, you are pretty much at their whim when they pay you. Sometimes it's 30 days, sometimes it's quarterly if you are considered a small time job.

 

Get your payment plans and schedules in your contract! Never ever leave this phase up to assumptions.

 

Asking for cash up front can be a double edge. Some companies may not yet have the capitol yet, they themselves are waiting on financing but may need the visuals in order to secure more money. Whatever the case, get this in your contract and talk with your client about your payment schedules before you even start work.

 

If you feel you are not getting paid on schedule, withhold work. I almost never deliver a final size image unless I've gotten at least 50% of the project cost. Right now, you have no leverage. You gave them the final product and, if you don't have any of this in your contract, the best you can do is play the waiting game until the end of the fiscal year and hope you've been paid by then.

[Roodogg]

Thanks for all your input.

 

There are quite differing responces here! I essentially believe it all boils down to integrity with maybe a little accounting nonsense thrown in.

 

After working closely with a client on a project then when payment is requested, (late payment), to respond only with a 'read receipt' , you can generally fathom they will pay as little and as late as possible. Initially I was promised prompt payment. I may be naive. I'd rather say inexperienced though.

 

I will revise my contract to allow 30 days, maybe a decent discount for early payment and a penalty for late payment.

 

Thanks again everyone.

[Roodogg]

I wouldnt get wordy with a client over an invoice thats less than 60 days old.

 

I'm not sure I agree with this. I think not speaking to a client for 60 days will enforce the idea that you don't need or want the money. Then to contact them when the visuals have served their purpose (especially if they have not won the pitch or the development has ceased) would surely result in them being less keen to relinquish a hefty sum.

 

Ps, I realise I stated they were 'prestigious' but they are not big. Around 7 employees in a small studio - accounting I think is done by the secretary / office manager.

[Tommy L]

I'm not sure I agree with this. I think not speaking to a client for 60 days will enforce the idea that you don't need or want the money. Then to contact them when the visuals have served their purpose (especially if they have not won the pitch or the development has ceased) would surely result in them being less keen to relinquish a hefty sum.

 

Ps, I realise I stated they were 'prestigious' but they are not big. Around 7 employees in a small studio - accounting I think is done by the secretary / office manager.

 

You're making the mistake of thinking this is personal. Its not, your invoice is indeed sat in a pile or a drawer or in a filing cabinet. It will get taken care of in due time. Calling or emailing your client to complain will not make payment happen faster. In a company everything is done by procedure/protocol. It will happen when it happens. Your client will just get annoyed and consider you a whiner. The reason I said I would not 'get wordy' (i.e complain) within 60 days is that the benefit does not justify the possible detriment to your relationship.

What if their accountant is a contractor and only comes in once a month? You think an architect is going to appreciate being told to dig through the accounts because a contractor they have only used once (see 'no existing relationship') has decided he cant wait?

ok, well if your invoice says 'payment within 30 days' then call after 30 days, but dont be surprised if you are told you are 'in the system'. After 60, well then there's a problem because you've missed more than 2 billing cycles, so by all means get pissy.

 

Ive only once got stiffed on a bill and that was only for $1000. Once you've a good roster of clients then payment is kind of like salary. Ive done over 25 jobs for my best client in just over a year so why worry about when the money comes? It just comes around when it comes around. They tend to bundle up jobs and pay me in one check every few months.

However, I dont like the 'you get payed when I get payed' thing. That pisses me off.

 

Anyway, I guess what Im saying is DONT put your client in a uncomfortable position, DO write payment due in 30 days and DO expect to wait a little longer sometimes. DO follow up about money after 30 days but use it as an opportunity to talk with your client, not issue demands and complaints.

 

You already said your new to freelance. This is advice learned the hard way!

[Scott Schroeder]

What was the payment schedule you had written in your contract with them? If nothing, then that's even more of a statement that you don't really want to be paid anytime soon.

 

Never go on verbal agreements or trust anyone. If you trusted someone's "promise" then you are inexperienced and a little naive. Get it in writing with signatures. Most places will promise you anything, just to get the render so they can get paid. I can bet you that they'd (your client) never respond to your email or do any sort of business for you if they themselves weren't getting paid the instant they interacted with you.

 

So if you have to be harsh, then so be it. Don't really worry about burning a bridge with a place that feels that they can pay you whenever and essentially have you working for free until they deem you worthy of being paid. Just because freelancer has the word "free" in it, doesn't mean you don't deserve to be paid on time. Maybe change the profession to paidlancer?

[lee81070]

Asking for cash up front can be a double edge. Some companies may not yet have the capitol yet, they themselves are waiting on financing but may need the visuals in order to secure more money. Whatever the case, get this in your contract and talk with your client about your payment schedules before you even start work.

 

Agree wholeheartedly about agreeing a schedule, but receiving an up-front deposit shows you the client is serious about the job and is not just speculating. Any company that refuses the deposit or cannot self-finance a pitch should throw up huge alarm bells and would be one to avoid.

[aristocratic3d]

Exactly!!

Agree wholeheartedly about agreeing a schedule, but receiving an up-front deposit shows you the client is serious about the job and is not just speculating. Any company that refuses the deposit or cannot self-finance a pitch should throw up huge alarm bells and would be one to avoid.

[Tommy L]

Agree wholeheartedly about agreeing a schedule, but receiving an up-front deposit shows you the client is serious about the job and is not just speculating. Any company that refuses the deposit or cannot self-finance a pitch should throw up huge alarm bells and would be one to avoid.

 

Client is serious about a job? Are you for real? You want to make everything as easy as possible for a client, you're providing a service. I dont ask for money up-front because I know most companies are not set up to allow for it. They are also usually in a rush and late getting their house in order. They will go with the best, most convenient company they can afford. You need a tight contract, but you dont need money up front. Maybe on a HUGE job, but not on most.

[Justin Hunt]

I used to not ask for money up front, now I do. I got burnt one too many times with non-payments. Even got the line that I'll only be paid once the project gets council approval (to which I never agreed). When I was asked to do more images due to council change requests I insisted on 50% upfront and payment on delivery. Guess what, I got paid with in the hour of sign off.

 

Unless the project is worth huge amounts, I see no problem with having a payment on delivery clause in your contract. Once the images are handed over you have little to no leverage to get payment.

 

One thing you should do is keep all communication professional and in writing.

 

jhv

[lee81070]

Client is serious about a job? Are you for real? You want to make everything as easy as possible for a client, you're providing a service.

 

I am for real... No, I'm providing a PRODUCT, one I expect to get paid for. They are buying an image. Do you go into a computer store, ask for a laptop and say "I'll pay for this when I get paid"? Why should what we do be any different?

[Scott Schroeder]

I am for real... No, I'm providing a PRODUCT, one I expect to get paid for. They are buying an image. Do you go into a computer store, ask for a laptop and say "I'll pay for this when I get paid"? Why should what we do be any different?

 

Actually, that's called credit. So yea, you can buy things without paying for them up front. You know those things called credit cards? They have billing schedules and for some projects, its the same way. You set up a credit style payment schedule. I can go into the local electronics store and buy a whole ton of TV's, computers, and sound systems and pay for it with my credit cards. And yeah, I don't have to pay for those products until I get my next statement. Or not pay at all if I prefer to be a deadbeat. But make it known that the credit company will be after me because in my agreement, I agree to pay at least the minimum. Your work should be no different.

 

As Tom points out, may times clients may not be set up to make an upfront payment. It's about your contract. If you are not getting an up front payment, make sure your contract reflects that. Make sure your contract clearly lines out what you will deliver and not deliver based on payments and when you expect payments.

 

A lot of clients will go elsewhere if you are demanding a down payment on work.

Edited October 17, 2011 by VelvetElvis

[lee81070]

No, the store is still receiving payment for goods... how you pay for them is irrelevant, the fact is they receive payment for their goods. Now if a client were to say "I don't want to pay you a deposit because I don't have any money" would you honestly undertake a project for them? I know I wouldn't. I'd rather do 10 smaller jobs that I know I'll get paid for than one big one where payment is a game of roulette...

 

And as a freelance, what guarantee do you ever have they will pay you in the end? Clients know that the legal route is costly and ends up with no-one but the sharks winning so contracts are really not worth a damn, and it's all very well withholding final images, but to be honest they are worthless to you, they only have worth if the client is prepared to pay for them. They could quite easily respond to the non-release of final renders by saying "fine, we won't have them then"... so you are left with an unpaid invoice for work done, with no hope of recompense for time spent. Until you build up a good relationship with a client, always be wary of over-exposing yourself financially.

 

I've been freelance for over 10 years, and only once have I not been paid... and that was because the company went into liquidation.

[Tommy L]

I am for real... No, I'm providing a PRODUCT, one I expect to get paid for. They are buying an image. Do you go into a computer store, ask for a laptop and say "I'll pay for this when I get paid"? Why should what we do be any different?

 

Its not a product, its a service. You supply no tangible goods and have little to lose but your own time and running costs. There's no supply chain, manufacturing or raw material costs. No shipping and warehousing. You provide your time and effort using your tools. Kind of like a plumber. Without the pipes and washers.

[lee81070]

Of course it's a product. Just because it's in electronic form does not mean it's not a product. You are creating something, not providing a service (which the dictionary defines as "the act of helpful activity")... For this to be a service, there would never be any end result, just the continous act of modelling, texturing and rendering.

 

Would you say people like photographers, authors and musicians are creating a product or providing a service? The simple fact is you labour to produce an image or images, which you pass to the client for money. Once the money is received, ownership is transferred, just like any other purchase of so called "tangible" goods.

[RyderSK]

Its not a product, its a service. You supply no tangible goods and have little to lose but your own time and running costs. There's no supply chain, manufacturing or raw material costs. No shipping and warehousing. You provide your time and effort using your tools. Kind of like a plumber. Without the pipes and washers.

 

You have very limited and materialistic view of what "product" nowaday means. If you atleast googled a little bit, you would be proved wrong quickly.

 

Your whole argument with "supply chain, manufacturing" might have been true in medieval times. Today the word also has economical and commercial meaning. Never even heard the term "financial product" when you go to bank ?

 

There is difference between service and product, sometimes, even both terms can apply at the same time though.

[Scott Schroeder]

Intangible good: http://en.wikipedia.org/wiki/Intangible_good

 

"An intangible good is a good that is intangible, meaning that it can not be touched, as opposed to a physical good. In an increasingly digitized world, intangible goods play a more and more important role in the economy. Virtually anything that is in a digital form and deliverable on the Internet can be considered an intangible good. A piece of music, a picture, or an article downloaded from the Internet are all examples of intangible goods. In ordinary sense, an intangible good should not be confused with a service since a good is an object whereas a service is a labor. So a haircut is a service, not an intangible good.

 

A different way to look at this distinction is to consider the ownership factor. In case if person A requests a design and person B fulfills the request and deliver the design through the Internet, was that a service or a digital good? It actually involves both. It's a service that produced an intangible good. If what person A bought from person B is a service, then person A should assume ownership of the design, which is a digital good; whereas if what person A bought is considered an intangible good, then person B may still own the design. It's like when you buy a book from a bookstore, you have the right to use that book but you don't own the copyright, whereas if you hire someone to write a book for you, then you will have the copyright."

 

Service: http://en.wikipedia.org/wiki/Service_%28economics%29

 

Discuss amongst yourselves.

[Tommy L]

Haha!

Well I dont really care whether its a service or a product. Im trying to illustrate that there's an intrinsic difference between you making an image to be delivered via ones and zeros and somebody who sells a hard product that they actually have to make out of real stuff....

I guess the point is that you should have faith in the people who appoint you. They are taking a chance on you also. Seriously, you hear the occasional horror story and also you sometimes see payment laundry aired online, but I think its so isolated its not worth making a barrier to a potential new client out of.

[Tommy L]

You have very limited and materialistic view of what "product" nowaday means. If you atleast googled a little bit, you would be proved wrong quickly.

 

Your whole argument with "supply chain, manufacturing" might have been true in medieval times. Today the word also has economical and commercial meaning. Never even heard the term "financial product" when you go to bank ?

 

There is difference between service and product, sometimes, even both terms can apply at the same time though.

 

Thats a very peculiar way of looking at things. Medieval times? For manufacturing? You dont think people make things any more? Is everything vintage?

Any using Google and bank definitions of what is real is a dangerous path to tread....