When you’re working freelance and managing everything from deadlines to client expectations it can be additional pain when you send an invoice for work completed and it isn’t paid on time.
Working for yourself means you’re in charge of everything from completing your tax return to making the coffee, so the additional pain of having to chase a client for payment can mean additional stress. The fact is that you have completed the work and need to chase payment so in this article we will outline some handy tips that can help mitigate the risk of an invoice becoming overdue.
Payment terms laid out
When you are starting work for a new client you should send over your terms of business, including your payment terms and bank details as well as any other terms. Here is an article covering some of the main things you might want to consider.
Interest on late payments
When a payment is late you can charge interest, with the amount charged called statutory interest, which is levelled at 8% plus the Bank of England base rate. If you are adding interest, you should send a new invoice with this detail outlined. In addition to charging interest on late payments, you can also charge a fixed sum for recovering late commercial payments.
Up to £999.99 an additional £40 late payment fee
£1,000 to £9999.99 an additional £70 late payment fee
£10,000 or more an additional £100 late payment fee
Find out more here.
Set calendar reminders
To ensure you are always on top of finances it can be a good idea to set calendar reminders so that you know when you should start to chase payments. You can put together a draft email to use explaining that if a payment isn’t received by a specific date you will charge interest plus a late payment fee.
Find out who oversees paying the bills
The person in accounts who is ultimately responsible for making payments should be someone who you can email directly should the need arise so it is a good idea, especially if you are taking on regular work to ensure you know who this is.
Money Claim Online
Money Claim online can be used if you have exhausted all other methods of recovery, it can be used for debts of up to £100,000 and you can submit your claim online as well as check on progress. You can access Money Claim Online here.
If you still haven’t been paid, then we can undertake judgement enforcement on your behalf if the total owed is over £600, you can find out more about High Court enforcement here.
David is an authorised High Court Enforcement Officer and our Director of Corporate Governance