How to get clients to pay their bills

So, six months after going freelance, my initial word of mouth advertising is going quite well, and I'm looking to advertise elsewhere. Like any freelancer starting out, if I could get anything for free I'd take it!. So I advertised on Gumtree. Within a couple of weeks, I'd been contacted by a guy who said he was just starting up a business on his own, and needed a local freelancer to do some small bits of work for him. When I quoted for the work, he reiterated he was starting up, and "could I do anything on the price", so I did. I think I knocked off about 20%. Work done, payment was slow coming in, but after a bit of chasing, eventually it came.

He kept on saying that he had a big Web project that he wanted me to work on, but he needed to get a few things sorted first. Looking back at it, this was just bait. A few more bits of work came up; a new logo design for example, but it was always preceded by "can you do anything on the price", so having just started up my own business, and knowing what it was like, I did.

Then came the turning point for me. He asked to meet up to discuss some bigger opportunities he might have for me. So i went to meet him, as it turned out, at his shop. I turned up to see his £80,000 LandRover with personalised number plate, and a few people working for him. At that point, I decided to get the meeting over and done with, and that I wouldn't be doing any more work for him. I didn't want to work with someone who blatantly lied to me.

Having seen his set-up, I decided to chase for my last outstanding payment (now six weeks from invoice date). So I chased, and chased, and every email that came back said "It'll be in your account on...". Those days came and went, and I was getting really angry. It was not much money, less than £150, and this guy just wouldn't pay up. I got to the point where I wanted to out this guy, and make it impossible for him to do the same to another unwitting freelancer.

Eventually I posted on the FreelanceUK forum, and got some help in the name of Sid Home at Safe Collections, a debt recovery company. At first my client didn't return emails or phone-calls, so I remembered he'd said his dad owned a restaurant, so I gave Sid the number of the restaurant. After contacting his Dad, Sid got a home number and spoke directly to him for the first time. Over the next few weeks, he promised again and again that the money was being transferred, but nothing came. Only with the threat of increased charges did it get resolved, and my client begged me to stop the action.

So what have a learnt from this, and how have I changed my policies? Well, with any new, unknown clients, I now ask for 25% upfront, and on all invoices I now add 10% and reduce it to the normal price if its paid within 28 days. I will not reduce my prices anymore. My prices are my prices. You wouldn't go into Next or River Island and ask if they could do anything on the price, would you?

Sid Home adds “It was a pleasure to assist Andrew of Facio Design. The debtor company in question was elusive and evasive, however with the information provided by Facio Design, we were able to make contact and thus produce a satisfactory result in obtaining payment, as we have for many freelance professionals.

”In our opinion it shows again the need for accurate information on each and every customer, we normally suggest that our clients obtain a signed credit limit application form prior to undertaking any work of this nature, one is available from our website contained within the pages of our free download guide. This is just a general form and can be amended to suit any type of business. It should be used as a matter of course when an enquiry is received. This may not be applicable of course in a formal contract arrangement between the parties, however, knowing who you are dealing with remains critical, together with their ability and willingness to make payments as they fall due.

"The debt recovered for Andrew had also not been outstanding for too long, this too is very important in order for us to achieve success, the longer an account remains outstanding, the greater the risk of non-payment.

"So in a nutshell Safe Collections Ltd recommend, that you know who you are dealing with, check they have the ability to pay you and if they default you have the ability to react swiftly and professionally.”

Reduced-fee debt recovery is available to members of Freelance Alliance.


17th October 2008

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