Freelancers in the creative industries are losing an estimated £5,394 per year due to unpaid work, according to new research by the Association of Independent Professionals and the Self Employed.
Those surveyed spent an average of 31 chargeable days in the past two years undertaking projects without pay. It included scenarios where free work was pre-agreed, as well as those where an expected fee was not paid.
Why is this happening? More than half of freelancers hoped to gain exposure for their work, while one in five considers working for free as standard practice in the industry. But there are plenty of other reasons why freelancers might not be able to charge for their time.
It might be that they offered a fixed price on a project that they underestimated, and the client was unwilling to pay for the extra time involved. Or it could've been pressure to win favour with a particular brand in the hope that it would lead to bigger and better things.
Whatever the reason, there are ways to ensure you get paid for all your freelance work. Here, we will try to help you protect yourself so that you can avoid any problems in future.
Do some detective work
Before you jump into bed with a new client, you must carry out a little detective work. Besides, you know nothing about this company or whether they can be trusted – so why would you go ahead and work for them without being cautious?
This is where Companies House becomes your new best friend. By looking up the firm online, you can discover whether it’s legitimate, how long it has been active and who the directors are. Using Company Check, you can also uncover credit reports – so you can say goodbye to bad debt and poor business relationships.
Manage expectations as soon as possible
Once you’re happy the client isn’t dodgy, you’ll want to meet in person to discuss the potential work. During that initial chat, it’s wise to establish how you work, so you can immediately set expectations. This leaves no room for misunderstandings further down the line.
You don’t want to lay down the law immediately – but the way most initial meetings go, if they go well, is that the client will ask how you operate, and how you can get started. This is an excellent opportunity to set some ground rules.
Explain that you expect them to sign a contract – not just to protect yourself, but also themselves. Describe how you charge for your time, and what that time entails – even if it’s emails, phone calls or meetings. Some clients will be surprised that these things will be deemed as chargeable – so make sure they’re fully aware.
If the client wants a fixed price on a project, stipulate that you will be entitled to charge more if they add additional requirements once work has begun. For this to work well, you'll have to put down in writing every single aspect of the project. Include a disclaimer about how any ‘additional work’ will cost more, according to the time involved. You should also include a line on your hourly rate and how you will charge them, i.e. upfront? Or at the end of each month?
Yes, this will be time-consuming. Yes, it’s a pain. But the more effort you put in at this stage, the more chance you’ll get paid for everything you do. It just depends how keen you are to ensure that happens.
Set out your payment terms
Next, set your payment terms. The standard is 30 days, but you can decide how you’re paid. The general rule is to track your time and then invoice each client at the end of every month. For super-easy time-tracking and invoicing, I’d highly recommend FreeAgent.
If you’ve taken on a fixed-priced project, it’s advisable to protect your cash flow by asking for a deposit upfront and then staged payments throughout. Not sure how much of a deposit to charge? Anywhere between 25% and 50% is perfectly acceptable.
And then, before you deliver the final work – issue a final invoice with the outstanding amount. Make it clear that you will handover the goods once payment has been made.
Track everything that you do
No matter what you do, don’t forget to track your time with detailed descriptions on what you’ve done for every minute. Write as though the client might read your explanations, i.e. ensure you provide enough detail and always check your spelling and grammar. That's because some clients will want to see exactly how you’ve been spending your time.
FreeAgent has a handy inbuilt time-tracking solution, one that allows you to create beautifully-designed PDF reports to send to your clients. Or you can check out more of our recommended time tracking tools.
Invoice like a pro and make it easy for clients to pay
When you've done the work, invoice the client immediately. Don't hang about – be a professional and send a decent looking invoice to the relevant contact.
But be warned! An invoice is so much more than just a legal document – it's a record of the work you've done, an explanation of your costs, a promotion of your business and a request for payment on time. It should anticipate the delays or doubts your client may have by giving them all the information they could ever need to pay you quickly. Read these extra tips on how to write a client-proof invoice to ensure you get paid.
If getting paid is proving difficult, make it super simple for clients to settle their debts. For instance, can you accept credit card payments? FreeAgent can integrate with GoCardless, so you can easily take online payments.
Know when to down tools
If your client is behind on invoices, then there comes the point when enough is enough. You can’t keep going if previous work still hasn’t been paid. In which case, explain politely to your client that you are just waiting for them to settle past invoices before any work continues. You're perfectly entitled to do this. Just have the confidence to tackle any resistance that might arise.
Have the confidence to say no
Yes, we all need to win more work. And yes, it’s common practice to take on anything and everything – particularly when you’ve just gone freelance. But once you’re established and, dare I say it, not so desperate – you can afford to be fussy about who you choose to work with.
If a client is dragging their heels to pay a deposit or reluctant to sign a contract, you have to ask yourself whether they’ll be worth the hassle. New work is always around the corner if you’re doing everything you can to market yourself.
It’s a matter of knowing your worth and having the confidence to turn people down if you don’t think they'll respect or pay you.