It’s unfair when client cashflow issues impact you as a freelancer, but this is cited as the most common reason a freelancer’s invoice isn’t paid on time. It’s a good idea to be prepared for this eventuality.
As an aside, sometimes clients can disguise their reason for non-payment as cashflow related when there’s something else at play. This is why it’s important to build the habit of doing a credit check on your client so that you can capture an accurate picture of their business health.
Let’s assume your client is struggling financially and has raised cashflow as the reason your invoice is late. If you’re in the fortunate position of not depending on the money then it’s a good idea to cooperate with your client.
A compromise could be agreeing on a payment plan. For example, asking for 25% of the fees to be paid immediately, with the other 25% in 2 weeks and so on.
It’s not an ideal outcome for you, but it means you’re receiving a percentage of your invoice immediately. Considering the process for pursuing late payments is lengthy, this might be your best option at getting some of the funds you’re owed instantly.
Below we’ve included a template to use as a guide so that you have something in writing. If the client ends up not paying and you have to pursue the debt more formally, the courts will look favourably on you since you were working with your client to find a solution.
I am writing in respect of the money due on the invoice [reference] for [amount]. I propose that the sum stated can be paid in [weekly/monthly/quarterly] equal instalments with payments beginning on [date].
Should you wish to accept this offer, please provide confirmation in writing that you accept the terms. Once the final instalment has been paid I will consider the matter concluded. In accepting the offer, and once the final instalment has been paid, I will not take any further action to enforce the account by any means.
If your client doesn’t agree to a payment plan and the invoice remains unpaid, our suggestion is to initiate the late payment process. This may be something your insurance can help you with.
