Client does not want to pay me on time

[Gulliver]

Yes. I'm not sure if that is per invoice, ie, if you have 3 invoices over £1,000 outstanding then you charge £210 in penalties.

I would escalate this immediately. Don't accept this nonsense about pay cycles being fortnightly so you will be paid late. If they want to run fortnightly payment runs then they have to pay you EARLY not late.

The payment terms you have offered them are very generous indeed. Be polite but firm in your dealings with them and they will respect this.

And for your next contract work, tell them that due to their late payments in the past, you are reducing their credit to 30 days.

Thanks for your response.

Some of you have encouraged me to send them another email and make it clear what's in the contract. It worked.

I've sent them an email where I firmly explained that they should honour the terms they signed. The finance director came back to me and he sent me a new payment schedule where he adjusted my the pay dates to their fortnightly payment schedule. Some of the invoices he adjusted the next fortnightly and some he adjusted the previous fortnightly. So half of my invoice will be paid a couple of later but half of them will be paid a couple of days earlier. So it's balanced out to 45 days and I was ok with this.

Next time I will go through a recruitment agency I guess because they have 21 days term.

<Mod>Successive almost duplicate posts merged</mod>

[Gulliver]

Jeez, some people will complain about anything.

Most on here would happy as a pig in tulip if they could get a direct freelance contract, but those don't materialise for contractors. They either have to go through a Limited Company and always be on the look-out for a tax investigation, or they go through an Umbrella company and pay an eye-watering amount of tax.

You might find the Freelance UK forum (if it still there, I haven't checked) more in line with your situation but I am sure that they would tell you the same as us that if you are working on freelance jobs then you must have money set aside to cover the times that you are out of work or your customer goes bankrupt without paying you.

If being paid a few days later than you expected is causing you grief then your buffer is not nearly big enough. The buffer does not have to be a pile of cash - an additional credit line will suffice (although not the best option), there must be a buffer though.

How will you cope if there is a gap between this job and the next one?

Thanks, yes it just turned out that I had no buffer. After I'm paid for this I will have buffer for the next project. By the way you mentioned that going through an LTD is less tax efficient? Maybe this is for another thread but I heard pro and cons re this topic.

[Gulliver]

I've got a client who will hopefully be paying me at the end of this week - nearly a month after the invoice due date. On their next invoice they will find statutory late payment charges (the £70) and 8.5% interest for each day they are late. A lot of small companies won't make the charge because they are afraid of losing the business, but in this particular case I'm not hugely fussed and I'm hoping it will make them pay attention to my (& all their other suppliers!) chasing emails / calls in future.

My best advice would be to speak to whoever runs the payments team and say that you don't want to add £70 onto each late invoice, but this is causing you a lot of inconvenience which you feel you should be compensated for. If they can arrange immediate payment for the outstanding invoices & pay future ones on time then you will waive the charges.

Are you saying that the late fee can be £70 + 8.5% of the full amount for every day?

I chased them and it's solved now - see my message just some message above this one.

[Gulliver]

I can the OPs point of view. His client agreed the contract and now hes started they're changing the rules because they cant be arsed.

Yeh, it might only be a short delay but, as OP points out, it is a PITA for him. After all, he was expecting one thing and client is doing another.

HOWEVER, if it were me I would moan a little bit but, ultimately, depends on how good the gig is. If you've got another one to go to and dont care if you upset them and it all goes belly up then go for it and play hardball.

Cant help thinking though that if you take them down the claims route it might not look good at renewal time. (Even though you're perfectly correct).

I did the middle way. Between the hardball and the softball and it worked The finance head replied to the email not the lady I emailed with and he offered another schedule.

[Platypus]

Some of you have encouraged me to send them another email and make it clear what's in the contract. It worked.

I've sent them an email where I firmly explained that they should honour the terms they signed. The finance director came back to me and he sent me a new payment schedule where he adjusted my the pay dates to their fortnightly payment schedule. Some of the invoices he adjusted the next fortnightly and some he adjusted the previous fortnightly. So half of my invoice will be paid a couple of later but half of them will be paid a couple of days earlier. So it's balanced out to 45 days and I was ok with this.

Good Job!

Next time I will go through a recruitment agency I guess because they have 21 days term.

Nooooo! Don't do that!

[Gulliver]

Good Job!



Nooooo! Don't do that!

Why not?

[NotAllThere]

Are you saying that the late fee can be £70 + 8.5% of the full amount for every day?

I chased them and it's solved now - see my message just some message above this one.

£70 per invoice and 8.5% a year interest. So divided 8.5 by 365 to determine the actual amount to charge per day late.

Why not?

Because an agency will take 15% of the fee (or more) for themselves. Which is quite expensive for having to wait an additional few days. Also, you are in control of the client relationship.

[Willapp]

Why not?

Because then you'll be introducing a middle man into the equation who will want their cut of your rate. At the moment once you get into the regular payment schedule you're financially better off having a direct relationship with the client. Sticking an agency into the mix means either the client has to pay more for the same skills, or worse still your rate gets reduced so the agency get their markup.

Whilst agencies may be useful to smooth out payment issues by offering more regular invoicing periods, in general you're better off going direct providing you agree a sensible payment schedule into the contract and make sure you enforce it. As you've just seen, it generally only takes a reasonably strongly worded email to the right person to iron out any disputes.

[Gulliver]

£70 per invoice and 8.5% a year interest. So divided 8.5 by 365 to determine the actual amount to charge per day late.

Because an agency will take 15% of the fee (or more) for themselves. Which is quite expensive for having to wait an additional few days. Also, you are in control of the client relationship.

Re late fee: I see

Re recruiter: they offered me the same daily rate.

[Wanderer]

The finance director came back to me and he sent me a new payment schedule where he adjusted my the pay dates to their fortnightly payment schedule.

Very good, now you have the ear of the finance director. Impress upon him politely but firmly that you must be paid on time in future.

You can also claim the late payment penalty and interest anytime in the next 6 years or so so keep written details of your dealings with the client.... I would be inclined to produce a summary of the late payment penalty and interest (interest is per year, so divide it by 365 to get the daily rate) and present this to the finance director and tell them that's what they are going to have to pay if they ever pull that stunt again.