How do you guys deal with bad payers? My first freelance gig after the demise of The Mill and my invoice is two weeks late, they have said their client is late paying them, despite m pointing out my contract is with them, not their client.
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No easy answers. Persistent but professional does get you paid 99% of the time.
What where terms you agreed to for the job?
And theyâre not wrong. The cash has to flow down the chain from the top. Nobody has enough margin these days to float freelance fees without collecting from above first. Sometimes there retainers that buffer this. But the assumption that you get paid on time just because your contract is with them doesnât work in the freelance world. That only works in staff positions, and creates challenges that has killed companies.
Here in the US, Net 30 is pretty standard for freelance. You can keep top talent by paying faster. But itâs not unheard to see Net 45, Net 60 or more.
In those cases you can raise your rate 10% and then offer an early payment discount. Essentially you let them finance the rate, if they canât pay faster. But even then itâs usually Net 30.
But it always comes down to agreeing on payment terms and expectations as you accept the job.
Iâm sorry to hear that.
Name and shame.
The mill (and associated companies) frequently slow walked payments and used unqualified people as firewalls.
Those companies were not alone.
Once learned, people continue the practice when they take up new roles in new firms.
Sigh.
Lawyer up.
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Jan, my terms are 30 days, however it was never mentioned that payment depended on their clients paying them first, it should have been made clear from the start.
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Itâs assumed. Everybody is conditionally paid.
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I have experienced the same situation you described a couple of times, and it is surprising that there are people who think it is okay to hold payments because you have not been paid. Needless to say, these relationships inevitably change so on our case, it does not happen twice.
From my part, Rohtau does pay as fast as possible, and unless we have come accounting conflict, we pay the same week they submit the invoice, and in some cases, the exact same day. As it should be.
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Agreed. And many good businesses do the same for obvious reasona. If I can pay upon receipt of invoice I will. And if appropriate I do ask for production advances to cover.
But itâs not a universal reality. Far from. Especially when dealing with big corporate customers. We just had one going from Net 30 to 45 w/o warning.
In NYC there is a local law requiring payment in 30 days or written notice at start of job if itâs longer. Called the âFreelance Isnât Free Actâ from about 8 years ago.
Theyâve now paid, 14 days late.
âŚAnd they sent you flowers, a food hamper, some champagne, handwritten notes of apologyâŚ
or did they send you an instagram picture of their staff party on the yacht in monte carloâŚ
WellâŚ
thoughts and prayersâŚ
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In Germany, some Freelancers use a specialized debt collector for invoices. So they do all of the boring paperwork for you and you get your money and they keep the âlate paymentâ-fee for them. Only have heard good things about it, but no idea how it is in the US.
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A few tips:
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I have a booking confirmation with a line item for payment turnaround (net 15, net 30, or whatever we agree to) and they sign it before I start. This way we are both in sync before job starts.
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I get the name & contact info of the person responsible for paying me before the job starts (the producer may be freelance so get contact in the payroll dept).
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A week before invoice is due, I send email to make sure theyâre on track to pay. Sometimes this is when I discover itâs going to be late, or it never got sent into processing, wups! I have saved a lost week of waiting by doing this last step.
Good luck!
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Thanks Renee, good advice there.
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I am mostly a VFX sup these days and I have never had someone default on payment but the worst was three months and a lot of polite but persistent chasing. My terms are 7 days. Overseas clients have proven to be the most stressful because in the back of my mind I know there is very little I could do if they chose not to pay me.
My other role is VFX/CG producer which sees me hiring artists. When I am doing this I try to get 50% from my client up front for jobs over an amount I deem risky and/or based on past experience with that client. I donât always get this, usually due to time constraints or company protocol or lame excuses. I have to make the decision to proceed or not.
As such whatever the situation, when I hire someone I consider that my risk and responsibility. Personally I think itâs bad form to tell a subcontractor you canât pay them until you get paid. I am big on this. As soon as a job is approved I ask my artists to invoice me (I even chase them) and without fail, I pay them the day I receive their invoice. The goodwill I receive from this is far more valuable to me than any interest I might accrue holding back payment.
However I am only hiring a couple of people at a time. For a large company with many subcontractors and multiple million dollar projects, taking a month or so to pay them can add up to a lot of extra cash, so I understand why a company might do that. Also large companies often have accounting and pay cycles which are bi-weekly or monthly, so if I invoice and just miss that, I might understandably be waiting a month. If a company really cant pay out until they are paid, then they are essentially running on empty but as some of you have indicated this is how many companies function.
I prefer my way and my team stay happy!
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Late-Payment-of-Wages
This is just for employees, but since many companies cannot distinguish between corporations, independent contractors and employees every legal tool can and should be applied.
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