As we reach the end of the working year, we're all hopefully closing and putting a ribbon around our laptops to hopefully step back from work for a little while. But what about those invoices we've sent recently? Are they going to get paid ahead of xmas? Whilst most businesses will be working hard to clear the payments before the break, someone in the finance department being on holiday early is not an acceptable excuse for payments being made late - and unfortunately, half of invoices raised in the past 18 months were not paid on time [FreeAgent, 2020], regardless of the time of year.
Money worries are one of the biggest causes of anxiety in the UK - and for freelancers the problem is significant: 75% of the self-employed say late payments have caused them concern, with 45% saying it creates significant stress or worry [Leapers, 2020], and a fifth of freelancers are spending time while on holiday chasing late payment [IPSE, 2019], so we’re calling out for all businesses to take a look at their outstanding invoices and make sure they’re paying their suppliers ahead of going away for Christmas, regardless of when payment is due.
Xmas isn't the only excuse given for invoices being paid late - let's cover a handful of the all too common excuses why payments haven't been made on time (and why they aren't valid excuses).
"This isn't what we asked for" - Challenging the deliverables should have happened before you invoiced, and shows the importance of getting regular feedback throughout the project, but once it's been invoiced, the time for challenges like this has passed. Make sure you’re getting your work approved fully before invoicing, so there’s no opportunity for this excuse down the line.
"You sent it to the wrong email email address / It was missing some information" - This conversation needs to happen within 24 hours of receiving the invoice, not once it's overdue. Follow up after you’ve sent an invoice to confirm they’ve received it and there’s no missing information, so this excuse can’t be used when overdue.
"Our client hasn't paid us yet - so we can't pay you." - This is not an acceptable excuse. Running a business has costs, and you’re one of them. You can be sure they're paying their internet bills before their client is paying them; or they've bought their computers before their client pays them; so how are you any different? You're a cost to them delivering work to their client, and its not your problem how long their client takes to pay them.
"It's with my boss. It's just awaiting sign off” - This is not an acceptable excuse - it doesn’t take 30 days for someone to sign something off, especially if it’s been approved work, and it isn’t your fault they’re internally unable to organise themselves. Don’t accept this, and if your invoice is overdue, they should pay the penalty fee.
"This is for a pitch, so when we win the pitch, we'll pay you." - And what if they don't win? This isn't an excuse. The work has been done, it's their risk, not yours, and must be agreed as part of a contract upfront, not once the work has been invoiced. Make sure you’re agreeing payment terms upfront, not having this sort of conversation post-work.
"I totally forgot, why didn't you remind me?" - Whilst you can certainly ensure they’re receiving reminders using automated tools, it isn’t your job to remind them to pay their suppliers. Your invoice is the demand for payment, you aren’t responsible for their actions.
"Our payment terms are 120 days" - Ensure you’ve agreed payment terms upfront and discussed this before work starts. The client can't change this once you’ve agreed terms, and if your agreed terms are not being communicated to the finance department, again, that isn’t an acceptable excuse for delay. They’ve had 30 days to query the bill.
"Can we get a discount if we pay early?" - Yes, your discount is paying the amount charged - rather than paying a penalty charge when late. Don’t discount your work for good payers when it should be the bad payers who are the ones losing out.
"......" - uhoh, you've been ghosted, they're not replying at all! Sometimes a delaying tactic, sometimes you're at the bottom of the todo list, sometimes just rude, this isn't an excuse but just refusing to engage, which honestly is just unprofessional and disrespectful. Not communicating is also not a valid excuse for late payments.
“We were closed during the holidays” - Christmas happens at the same time every year, it shouldn’t be a surprise to anyone, and businesses should clear the backlog of invoices before the break, so there are no outstanding payments. Some companies state a ‘last day for invoices’ to be paid before the xmas period, bear this in mind - but if you’ve ensured you’re following what they’ve asked of you - there should be no excuse for late payments any time of the year.
It’s crucially important to remember that late payments are generally not your fault, and you should never be embarrassed or feel bad for demanding and expecting to be paid on time, or charging a penalty if payments are overdue - it’s your legal right to be paid on time, and your legal right to charge a penalty if you’re not paid on time - so get ahead of the problem, rather than letting that overdue payment worry you over the holidays.
Use this week to wish your clients a happy holidays, and check-in to confirm you’ll get paid on time this year, so you can rest well over the break.
