How freelancers demand payment for their services
Seven days from when you should have been paid went by. You sent a polite but firm reminder email to the client, but your payment’s now 14 days overdue. Still no reply.
You should now send a second letter, stronger in its terms and tone than the first, requesting payment and warning of late payment charges. Here’s an example:
Second Reminder of PaymentLetter
Outstanding Account Value - £ (Insert sum)
As at today's date, we have yet to receive payment of the outstanding amount, which is now considerably overdue.
Our company has not yet levied any late payment or interest charges under “ The Late Payment of Commercial debts (Interest) Act 1998 as supplemented and amended by the Commercial Debt Regulations 2002 ”.
However should payment in full not be received within the next seven days we may add these charges to your account. (Optional: Please also note that our company has a policy of ceasing supply of work/services to any organisation with an account more than XX days in arrears.)
We trust this will not be necessary and look forward to receiving payment by return.
You’ve tried to raise the client by phone, but in vain. Payment is now 30 days overdue. A third letter – a final payment demand – can now be sent. Stronger in tone than the two previous letters, this document features three sets of numbers near the top, so the payment amounts are prominent in appearance. It’s effectively a final stab at getting paid, and the reader – such as the client’s accounts payable staff - should feel it.
Third Reminder of Payment Letter/Final Demand
Outstanding Account - £ (Insert sum)
Late Payment Costs - £ (Insert sum)
Late Payment Interest - £ (Insert sum)
Total Outstanding - £ (Insert sum)
Despite previous reminders we are disappointed to note that the above account remains outstanding.
As this amount is now in breach of our agreed payment terms we have reluctantly added further costs and interest in line with “ The Late Payment of Commercial debts (Interest) Act 1998 as supplemented and amended by the Commercial Debt Regulations 2002 ”.
It is now imperative that this amount is settled in full, including late payment costs and interest charges within the next seventy two hours . Failure to settle this now extremely overdue account in a timely manner will leave our organisation with little option but to pass this account to our chosen debt recovery agency, … (Insert name, e.g. Safe Collections Ltd)
Please note: If a debt recovery agency is instructed to collect this overdue amount, your company will be liable for any additional collection costs incurred in line with “ The Late Payment of Commercial Debts Regulations 2013”.
We would therefore respectfully suggest that you treat this matter with the urgency it deserves and remit the full balance due as soon as possible.
The above letters are a basic starting point for freelancers who are owed money for services they have supplied. Your business, or company, may have other procedures to deal with defaulting clients. If so, include these in your requests for payment. Common examples include the removal of access to specific work or domains, or the retention of copyright/intellectual property.
Letter templates and guidance by Sid Home, managing director of Safe Collections , a debt recovery agency for freelancers and the self-employed.
21st November 2011