Late payment – writers’ rights

Andy Walsh offers some advice on how to get paid on time

Late payment is a problem that plagues many freelancers. Companies withhold money for many reasons: an intention not to pay; to earn interest on the money before releasing it to you; or simple administrative incompetence. Fortunately, there are simple steps you can take to help avoid the problem.

Avoiding or solving late payment starts when you take a job on. Make sure that payment dates or milestones (such as ‘the first installment of x pounds’ will be made on the submission of a first draft’) are clearly defined in your contract. As soon as you are eligible for payment submit an invoice which contains the following information (as specified on your contract):

• Your name

• The client’s name

• The client’s address

• Payment method (cheque or bank details)

• Date of invoice

• An invoice reference

• Project name

• The amount owed

• The date that the work was completed

• A due date for payment (i.e. no later than 20 days from the date of the invoice).

Some invoices may also require further information such as international banking codes (these are often on your bank statements, or should be easily available from your bank), National Insurance number and self-employment number. These are the sorts of information required by a client to easily pay your invoice. Putting this information on your invoice can save later delays.

Stay on top of your paperwork. Clearly label invoices with dates and, if possible, a reference code (such as the number of the invoice or the number of the invoice with that client, i.e. Invoice 55, or La-la-la-la Productions Invoice 1). Keep a list of unpaid invoices and when they were submitted. Remember that automatically inserting a date on a program such as Word can mean that this date alters to ‘today’s date’, you need a firm copy of the date the invoice was submitted.

Make sure you back-up your documents, either as hard copies, by saving them to a removable disk or CD or online (e.g. by sending them as attachments to your own online email account).

Don’t allow debt to build up; if you have several unpaid invoices with a client it makes clearing things up more difficult. A series of unpaid invoices may also point to a more serious problem with the company’s financial situation, so claiming payment as soon as possible becomes even more important.

Reminders

If payment is overdue then a telephone call or email is often all that is needed to get paid. Employers are people too and a failure to pay can often be due to forgetting or thinking “I’ll do that later”. When talking to the company, check with your bank first to be sure payment is not underway then talk to the accounts department of the company that owes you money, if you have problems here then talk to your contact.

Phone your contact and/or send a duplicate invoice (clearly marked as a duplicate) this should state that payment is overdue. If more than one invoice is overdue then send a statement listing the overdue invoices; the dates they were issued and became overdue; references (yours and theirs) and a total at the bottom of all monies owed.

The Late Payment of Commercial Debt (Interest) Act 1988

This is an Act passed which helps to protect freelancers and means that clients who pay invoices late must pay compensation and penalty interest by law. The 1988 Act was amended in 2002 and now includes fixed penalties in addition to interest claimable on the outstanding amount. For a debt of less than £1,000 the penalty is £40, rising to £70 for debts up to £9,999.99 and £100 above that. Interest is payable at 8% over Bank of England base rate.

Late payment is calculated from when your work is delivered or from the day notice is given of the amount owed whichever is later (which underlines the need to submit your invoice promptly). From this point the client now has thirty days to pay, unless you and the client have agreed any ‘reasonable’ alternative length of time. Full details of this can be found at www.payontime.co.uk.

If you have further problems, contact the Guild Office.

Andy Walsh is Chair of the Guild’s Children’s Committee.

Article first published: 10.04.2007