Holding late payers to account

Photo: 

How long should I wait to get paid? All my invoices inform clients that I expect my bills to be settled within 30 days, but saying so appears to make absolutely no difference to when the money actually turns up.

Some clients are brilliant – I have companies who pay within a week of receiving my invoice – but others are terrible. They’re not even ashamed of their behaviour – I got an email yesterday from a company informing me that it would henceforth be switching to 60 days as its standard payment period on the grounds that this made sense for its financial strength. Never mind my financial weakness.

Next March, new European legislation will define any payment made after more than 60 days as late (unless agreed otherwise by both parties), but I’m not convinced that will make much difference to the way many clients behave. Companies routinely flout existing late payment regulations in my experience and they’re particularly inclined to treat smaller suppliers – often freelancers – badly, presumably because they think they can get away with it.

The question is what we should do about that treatment. I know that I don’t make a fuss as often as I should – usually because I don’t want to jeopardise a relationship with organisations on which I depend for work (and sometimes because chasing up accounts is way down my list of work priorities). But if all freelancers agreed to stand up for themselves more often, maybe we’d be treated better. Any suggestions?

While I fully understand the risk of jeopardising relationships, especially for those of us whose main line of business is with one customer, the use of late payments legislation (or more formally the Late Payment of Commercial Debts (interest) Act 1998 and Regulations 2002) is a way forward. See payontime.co.uk for information, it's an official website. Even within the big companies, there are plenty of accounts personnel who do not realise that claims made under this legislation are enforceable by legal action. I have successfully used this to make claims where the customer's late payment has genuinely caused me problems and led to unplanned charges. A major customer technically still owes me nearly £900 in compensation and charges, but I have said that I will not make that claim until the next late payment occurs. Funnily enough, all of my invoices have been paid on time this year so far! I still have contracts with these customers because of the polite but forthright communication and, of course, the quality of work that I do for them. My advice is, try to diversify, don't keep all your eggs in one basket and remind them politely that if their clients had the same attitudes that they would be taking the same course of action.