I have been a self employed sole trader for about 14 years now. I was properly employed by a proper employer for a bit, but it really wasn’t for me! However, the one good thing about proper employment was that the money arrived in the bank account on the same day every month. Even if I had taken a holiday or been a bit poorly, the same amount would credit my account on the same day each month. I could plan. I could budget. I could relax.
Many freelancers will tell you that one of the most irksome things about being self employed is the uncertainty over payment. You do the work, you issue the invoice, you wait, you wait, you wait…you chase up……you wait you wait, you go overdrawn and then finally with a bit of luck – you get paid. Hopefully.
Such cash-flow trauma is a complete pain when you are trying to manage on a tight budget. Here are my top tips for getting paid a decent amount, in a timely manner.
1 Contracts – make sure there is one….
When quoting for work or negotiating a contract make sure that you let the client know exactly how much you will be charging and what your terms are. And then make sure that this is confirmed in writing prior to starting the job. If a client can’t or won’t get to within a stone’s throw of my terms, then I will generally bow out. Your field of work, your industry norms and your own circumstances will dictate what terms are acceptable for you, but once you have decided what they are, don’t compromise and get them agreed in writing!
2 Get Organised with your invoices
Depending on the size and complexity of your business/freelancing, put aside an appropriate amount of time per month to deal with your finances. I devote the last working day of each month to issuing invoices for work undertaken for that month. Having all invoices issued on the same day, and all with the same 30 days terms means that they are all due within the same time frame too. Which means that it is really obvious if a client is late in paying. I know many freelance artists who work with so many organisations that they simply lose track of who they’ve invoiced, who has paid and who hasn’t. Which brings me neatly onto my next point –
3 Don’t be afraid to ask for the money
You’ve done the work – you are perfectly entitled to get paid. This seems so simple and yet I hear many of my colleagues and peers really agonising about asking for money. This seems to be particularly marked with individuals providing services to members of the public. I know many people who provide fantastic services who hesitate to ask for payment or feel guilty about reminding people who haven’t paid. Set out your terms and conditions very clearly at the beginning or your relationship. With organisations or individuals who consistently don’t pay or who make excuses, then be very firm and refuse to let them access your services. Be ruthless! Drop ’em! Which reminds me, I must remember to pay my dog walker as I didn’t have my purse with me today…….oops!
4 Know your Clients
I have one client whose accounts department seems a little scatty to say the least. They pay, but always a little bit late. And their excuse is always that my invoice hadn’t been put onto the system. So now I always phone one week after the invoice is issued – just to check they’ve received it. And guess what? They don’t mess me about any more!
5 Don’t Undersell Yourself
In addition to making sure you get paid on time, you also need to make sure that you get paid a decent amount. Be wary of trying to win work by coming in with the cheapest quote, and of organisations or individuals that ask you to do things for free to build your exposure. I have lost count of the amount of times I have been asked to work for nothing or a fee so pitiful that it would barely cover the petrol money. My reply is not really printable. Remember that you are not being paid for an hour of your time, but for a lifetime of experience and training that make you good at the thing you do. Your knowledge of your own experience and industry standards in your field will help you decide what your daily/hourly rate should be, but once decided stick to it.
Any other freelancers out there struggle with any of these issues?
Would love to hear from you….
Love from the Thrifty Ninja!