[00:00:00] Today's episode is the last one of three on the topic of money, and it's a very much of a finance admin episode. It's not very juicy, but hopefully quite practical. [00:00:10] If you often struggle to get paid for your work, then I should have you covered with this one. Let me share some tips on setting clear payment terms, on navigating the murky waters of late payments, [00:00:20] we'll touch on the power of contracts, the importance of insurance, and what to do when a client goes missing with your invoice money.

This episode is full of practical tips on how you can keep [00:00:30] your cash flow healthy and your stress levels low.

 How to get paid.

Now for some [00:00:40] quick tips on getting paid, because payment can turn into a nightmare. Please note that you can download email template scripts for some of these actions via the bonus [00:00:50] content link. Be clear with your payment terms. Usually, invoices are paid within 30 days of the [00:01:00] invoice date as standard, though some companies set their own terms to pay their suppliers later, such as 45 days or even up to 60 days.[00:01:10] 

This is often clearly stated in the contract. State your terms on your contract. Your clients might be a little confused if you [00:01:20] start chasing your payment within your own set payment terms that weren't mentioned in negotiations. It's easy to be keen to get paid within a much [00:01:30] shorter amount of time, but it needs to be flagged up.

Otherwise, it looks very awkward. Don't send your invoices too early. [00:01:40] You've finished the work and supplied the files. Before the client can even approve the delivery, An invoice for the work slams into their inbox. It makes you [00:01:50] look efficient, sure, but it can also be in bad taste. Get the work approved, and then invoice.

But a regular client won't mind an [00:02:00] early invoice. There's an exception here. With clients that you know and have a proven track record with, You can sometimes invoice early. For [00:02:10] example, if you know that the work will take a month to create and the same time to get the invoice paid, you can issue the invoice at the beginning of the project.

Just [00:02:20] check with them first. Half up front, the rest on completion. This is a common practice across many industries. and can often work in [00:02:30] your favour. Some clients want to secure creative services by making a part payment, often half of the project fee upfront before the work has [00:02:40] begun. The second half is due either on supply of the work or within 30 days of that.

Either way, the contract should state [00:02:50] when the final amount is payable. Size doesn't always add up. Smaller client projects tend to be easy to get started, [00:03:00] but often take longer to get paid. Bigger work can take endless days and weeks to start, but these payments can often be credited next [00:03:10] day. It can also feel like a second job to keep track of payments, contacts and outstanding balances.

But with thoughtful communication, [00:03:20] it's not too much drama.

You also need to make sure you're legally covered for any inevitable challenges. [00:03:30] The following documents and policies can help you hope for the best, prepare for the worst, as the saying goes. Statement of Work, [00:03:40] SOW. This document provides a list of project requirements. It defines the scope of work with a list of the deliverables and estimated [00:03:50] timelines.

where the work takes place, and any other information that provides clarity for both parties. Usually, the client creates this, [00:04:00] but make sure it's in place. Contract. This two way document incorporates the statement of work. With clear conditions [00:04:10] on the project cost, how the work is agreed and delivered, and more.

Some creatives won't get up in the morning until a contract is signed. Then [00:04:20] some creatives, like me, don't have a contract for the first 15 years of trading. Ultimately, I learned that especially for higher ticket projects, [00:04:30] contracts make all the difference. As clients stop having silly ideas about delayed payments.

The client or the freelancer might have their [00:04:40] own contract and whoever's you choose, make sure you're both happy with it. Business insurance. Again, some freelancers [00:04:50] never bother to get insured, while others have insurance from day one. Insurance is one of those things that you don't think you need until you need it.[00:05:00] 

Business losses if something goes wrong can be huge, so for the sake of a few hundred quid, get your insurance in place and save the heartache [00:05:10] later if the worst happens. There are plenty of companies and brokers who can advise on what types you need, from public liability to professional [00:05:20] indemnity. For more information visit www.

businessloss. co. uk If you make a mistake, deliver a project late, or deliver it with such inferior quality that [00:05:30] it negatively affects the client's trading, they might consider starting legal action against you to recover the loss of trading revenue. [00:05:40] This could feel like the end of the world, unless you've got this type of insurance.

It gets you out of a hole. How to chase non [00:05:50] payments. Even with the most robust fail safes in place, sometimes a client won't pay on time. [00:06:00] These circumstances sometimes come about when a verbal agreement rather than a written contract has been made, like when the project's communication moves faster [00:06:10] than the admin side of things.

The majority of non payments are due to simple reasons and are rarely malicious or intentional. [00:06:20] And unless you're unlikely dealing with a hustler who ghosted you, there's every chance that you'll eventually get paid. So, here are some tips [00:06:30] on late payment. Late payment insurance. As the name suggests, you can purchase insurance that covers you when your [00:06:40] invoice funds aren't forthcoming.

But this insurance can be misleading, as there's no magic pot of money that will provide you with full payment if your client [00:06:50] doesn't pay, or that your insurer will go after your debtor. Instead, it often provides legal services that advise you how to pursue the [00:07:00] money owed. Pursuing Debt When a payment is outstanding, The longer it takes for the non paid to respond with a constructive response, [00:07:10] the more likely the non paid one is to feel resentful and annoyed.

Communication is often the key to resolving this situation peacefully. [00:07:20] If you don't hear back from the debtor, Send a few neutrally toned email reminders. Some small companies even set up a [00:07:30] fictional character, an email address, to make it look to debtors like they've got an accounts receivable department.

And it turns out this works really well. [00:07:40] And as mentioned earlier, always ask for a reply in an email. This time to get the status update and payment date. [00:07:50] How to escalate. If your invoice is unpaid beyond 60 days, you can up the tone of the language and stipulate what might happen [00:08:00] in the case of non payment.

At this stage, the suggestion of getting a debt collection agency involved can produce almost any [00:08:10] Bigger companies don't want legal action against them. You can find email scripts in the bonus content section. When that doesn't work, [00:08:20] if they still don't pay, the next step is to appoint a debt collection agency to act on your behalf.

If the issue gets this [00:08:30] far, it's best to transfer the work over to the agent and let them do their thing. Which does not mean kicking down someone's door or threatening them. [00:08:40] However, these professionals work on commission and they make sure they get the job done. They establish contact with the debtor and ensure there's [00:08:50] no dispute over the work delivery or costs.

Then, they negotiate a favourable outcome. which might be a staggered payment plan or full [00:09:00] sum received. Just make sure you understand the terms and conditions of the recovery agent, as you don't want any hidden fees to surprise you at any [00:09:10] point. Legal action and costs. A minority of debtors still may not pay what they owe.

Even if they agree to [00:09:20] installments or full payment, debt recovery agents can help you escalate the matter further, i. e. pursuing legal action in court. [00:09:30] At this stage, there are upfront costs for the legal paperwork and court fees, which could make an unpaid invoice start to feel like a burden, especially as [00:09:40] you have to part with further funds just to get paid for the work you've already done.

To add further insult to injury, even a court judgement in [00:09:50] your favour doesn't guarantee the debtor will pay. And the next level of escalation is paying a bailiff to knock on their door and seize their [00:10:00] assets to the value of the total sum. As you can imagine, this is messy and complicated. Something best avoided.

And with that, [00:10:10] let's get back to talking about what I prefer to talk about. Creativity. All you need is the plan, the roadmap, and the [00:10:20] courage to press on to your destination. Earl Nightingale.