jackjay28, post: 23822, member: 28639 a écrit : Hi,
18 months ago I did one freelance job while I was a student. I was under the impression that any work I did was free from tax and that I was also exempt from NI contributions - I'm still not sure what the rules are if you are a student.
Anyway, after 18 months of emails back and forth I'm still getting excuses on why they can't pay (£1050). In terms of the strength of my case, every email sent back makes it clear that they are happy with my work and admit to the money being owed
Understandably I'm quite frustrated and I'd like to take them to a small claims court. After discussing this with friends I've been told that as I didn't register self-employed while I was studying, taking this to court would cause me more problems. Now I've had conflicting advice about this and I'm still not sure.
I'd obviously back-date any tax owed if it came to that, but I' not even sure if I would owe any - let alone get myself in all sorts of legal problems.
I have since graduated and I have recently become self-employed.
Any advice would be greatly appreciated.
Thanks.
hi Jackjay,
Apologies for the delay in our response.
Now putting aside the concerns you have in relation to taxes and the like (as we aren't qualified to offer an opinion on those subjects) we can say that it sounds to us like you have a good case for recovery.
Provided you have a clear chain of communication that shows the original agreement, delivery of services and subsequent invoice then you *should* have just about everything you need to move forward.
Our view is that you simply aren't being treated fairly and that an 18 month delay with no payment is completely unacceptable.
If the client will not or can not agree to make immediate payment then either issue a county court claim or look for a reputable debt recovery agency who can work on a no collection no commission basis.
Small claims is remarkably easy to use but does require payment of a small amount in court fees. In addition it can be confusing for a layman in certain circumstances.
Debt recovery should have no upfront costs and no costs if the agency does not recover the money owed, but you will need to look for an established company and check their references thoroughly.
Either way, it sounds like the time has come for this reluctant client to pay up 😃
Opus, post: 23494, member: 2054 a écrit : A number of years ago most of my work was freelancing on site for more established agencies. There was no chance they'd pay upfront. Now though almost all my work is for direct clients - in those cases I often ask for a percentage in advance. If they don't respect that it's a warning that they're not going to be a good payer anyway.
Overall though, have clear terms for payment agreed, invoice promptly, confirm that they've received the invoice and then chase payment if it is overdue. You won't be frowned on for chasing overdue payments (unless you go off on one!) - you'll be respected for being organised. In fact, if a client knows that you'll be phoning up to chase it'll often prompt them to make sure the payment is made before you do so. Get to know the people in the accounts department - if they feel they know you and you treat them well, you'll increase the chance of them looking after you. I've known companies where the policy has been to hold off paying until they receive a call requesting payment. They aren't acting properly, but play the game if necessary. Whose invoice will be on the top of the pile - the one that they gets chased up or the one where the supplier seemingly doesn't care?
I've been burned once or twice by being too trusting of people. Most people are honest, but you can weed out some of the problems by demonstrating that you have clear procedures in place for ensuring that you will be paid.
nitim, post: 23489, member: 28369 a écrit : Thanks for feedback guys....it's really appreciated!
Have you ever asked (or considering asking) your clients to pay upfront, as a retainer, or in an escrow?
If so, how did it go?
If you work in an industry that it is accepted, then our advice is to charge a deposit. Any potential client that baulks at the idea of paying a deposit should be treated as a potential bad payer. After all if they are serious about the work and as prompt a payer as they promise, why the reluctance?
threelancer, post: 23481, member: 3804 a écrit : Hello Nitim, :)
I have had a couple of issues in the past. To be honest there is late payment legislation for overdue invoices but I dont know anyone who has used this as it will often disrupt any future client relationship. Dont rely on emails that can easily be deleted - always phone up to chase. If you feel you are not getting anywhere use a debt collection service or go through the small claims court - which I have done before.
Conversely, we know many freelancers who use it to great impact in the rare instances they have trouble getting paid. But then our argument is do you really want an ongoing relationship with a client that doesn't respect you enough to pay to agreed terms? We would suggest not, but each to their own ;)
As Melissa said, if you are in a position to withhold final deliverables until paid in full this will go a long way to negating any issues with late payment.
If you need help calculating late payment charges you can get our free late payment app on Android, iOS & BlackBerry. Just search late payment in the store, oh and did we mention it's free 🙂
lipong23, post: 15039 a écrit : I have already offer around a 60% reduction of the agreed price due to the delays and still they say that they will not pay a penny. I don't see any alternative now other then to remove the website. Also since the total amount is only £600 not sure if it worth to waste time on this.
Why write it off? You have done the work you deserve to get paid! :fight
If you want us to have a look at the file (for free) we'd be happy to give you an honest opinion 🙂
Contracts are always good, but all is not lost without one :)
If the emails you have between both parties clearly show an order, an acceptance and a cost they can be used as proof of the agreement.
Frankly if the work was completed it would need paying for, especially if they are actively now using the work you have yet to be paid for!
They may have an argument over a reduction in cost if the project over ran, but if no time limit was ever agreed then frankly its just an excuse.
TBH it's a bit difficult to give advice with the limited info you've posted. If you want to give us a call we would be happy to go through your options (with no hard sell, promise) :banana
Well on the plus side at least you are serious about avoiding late payment! But as you say this is quite a big step and could potentially be illegal (you would need some specific legal advice on the legality).
Is the end client aware that this is a possibility? Ie was it discussed that in the event of non payment you have the ability to withdraw services and cripple those already installed? If it wasn't we would certainly not recommend to any of our clients that this functionality be installed by the "back door".
Imagine payment is not received, you invoke the killswitch and cripple the software. If payment is then not forthcoming ask yourself how will this impact on further recovery action?
If you are forced to issue in court the court may well take a dim view if this added functionality was not discussed initially and was installed without the clients knowledge. Also if you cripple the business you may well be opening yourself to a counter claim for lost revenue etc...
You are absolutely correct in not agreeing any more work with this company until your invoices are brought up to date. You would be surprised by the amount of freelancers who would agree and "hope everything works out for the best".... :eek2
Don't worry overly with regards to the impending legal action, you will have no financial liability should the end client win any case. However this legal action will undoubtedly impact on your relationship with the agency and also the agency's cash flow we imagine...
It's a bit of a difficult situation to judge with only limited info available. As for all Freelance UK members we offer a free 10 minute no hard sell consultation, if you would like to take us up on our offer please call our offices.
Hartley, post: 14407 a écrit : If it were me I'd be having this discussion with my MD.
Your MD might have a better awareness of that person's cashflow/situation and who's best to have a friendly chat with them about bringing their account up to date. Your MD may decide 'business is business' and that the approach should be made tactfully by someone else but worth just checking before hand I'd say.
Seconded, have a word with your MD before doing anything... :banana
NickB, post: 14595 a écrit : I'm testing the waters with a web development/security business idea and I've managed to attract my first potential clients, one of whom I've sent an estimated project cost to and I'm going to call today. In the past I took on a large freelance project and naively didn't create a contract with the client. The client ran into money issues and refused to pay and to my knowledge I was helpless to do anything but refuse to hand over the project having wasted many hours on it. I want to avoid this situation again with my new venture so I'm looking for some advice.
Can I create a legally binding contract via email and does anyone have any advice on doing so? I'm thinking I could possibly write a document detailing the work I'll do and the cost of the work and send this to the client via email asking them to confirm via an email response that they agree to pay for the services detailed in the attached document and I can commence work on the project. Does this sound okay?
Email can constitute a legally binding contract, provided you get confirmation from the client that they agree the pricing structure etc and they clearly authorise the work be carried out. Your idea sounds OK but if it were tested in court it certainly wouldn't be guaranteed to be enough. Just so you know ;)
However as a general rule we would always, always, always recommend that you get some appropriate T&C's drawn up by a reputable legal eagle. Although we appreciate this can be expensive to new start ups...
You may also want to have a look at staggering your payments on completion of specific tasks. This will help minimise any "creep" on your time Ie the client changing the spec in development and also minimise your risk regarding non payment.
Plus at absolute worst if you complete the first stage and they don't pay, you will only have lost the initial hours and not a whole projects worth of time....
Good luck, and if you do hit any problems regarding payment feel free to give a call for a free no pressure consultation :banana
Sarahsrays: Great article, we couldn't agree more 😉 The only other advice we would add is before anything else:
"Find out exactly who you are dealing with!"
This may seem obvious, but you would be surprised by the number of our clients from freelancer to multinational concern who simply do not take the time to establish the exact identity of their customers. Whilst this isn't much of a problem if your being paid, when your not it becomes a major issue.
How do you chase a company when your unsure exactly which one owes you the money? We would strongly encourage everyone to read our Free Guide To Credit Reporting this free & informative article is essential reading to anyone who deals with any form of credit control.
web-design-uk: Sorry to hear you got burned, unfortunately as your debtor is now in administration the chances of you recovering any monies at this point are slim to none. Out of interest how overdue was the invoice/s in question?
Susie B: Sage advice from what sounds like a hard lesson learnt. There are no shortage of unscrupulous collections agents operating & the current financial climate is only encouraging more rogues to enter the field. When vetting agencies we tell anyone & everyone the golden rule:
"Pay no money up front!"
We really, really can't stress this enough. No reputable agency will ask you to pay a retainer, joining fee or subscription.
Similarly we ask all our debtors to remit directly to the client & not to ourselves. As we have collected monies from a number of supposed "collections agents" over the years who were reluctant to return
collected funds to their rightful owners.
As for the small claims farce it sounds like Basil Fawlty would have done a better job :confused2
As you rightly stated, getting the judgement is only the first (& cheapest) part. But if your debtor has absconded or has little of value to levy on you may well be throwing good money after bad.
Your agents should have appraised you of all of the possible outcomes before issuing, or at the very least traced the individual in question before starting proceedings.
But don't take it to hard, it was as you say a valuable lesson & worth 10 times the £1000 to avoid the pitfalls in the future.
So to any & all freelancers, lurkers or associated business people on this board we would like to invite you to discuss your collection issues or problems with us. Either in this thread or contact us direct.
We here at Creditsafe Ltd hear this story with increasing frequency in the current economic climate. It sounds to us like your client could be compensating for a lack of credit facilities by sitting on your invoices. They have already enjoyed an interest free "loan" of the value of invoice A at your expense & it doesn't sound like they are in any hurry with the other invoices.
Whilst it may be tempting to wait just that little bit longer to see if they honour the promises made so far, in our experience any prevarication on your part in all likelihood ultimately reduces the chance of you being paid.
We are the only agency recommended by The Freelance Alliance & whilst we do charge on a no collection no fee basis for our services, you are more than welcome to call our offices & discuss your options in detail with one of our advisers.
No tricks, no contract & no hard sell. Just honest advice.
Well as rss stated you can begin legal proceedings to recover this amount, but before you commit you may want to consider the possible pitfalls involved. This company as dis-organised as they are, will probably be most adept at defending legal proceedings.
1. Speed.
Undefended small claims actions can be fast tracked in approximately 8 weeks, however should your client decide to lodge a defence the option to fast track will be denied to you & you must be prepared to spend longer in dealing with the courts than you did on the original work.
2. Cost
Again should no defence be issued all of your costs are recoverable from the debtor, but as stated before if they lodge a defence spurious or otherwise your costs will sky rocket (think £100 per hour solicitors fee's) & these will not be recoverable from the debtor even if you are successful in your claim (see small claims limits on the web).
3. Success
Ask yourself, do you have everything you need to assure your success in this matter? Are all of your time/job sheets signed off? Do you still have copies of the confusing briefs & correspondence to clarify the confusion. They have already blocked your emails & ignore your calls will a small claims suit actually deliver the result you need?
Perhaps you need to look at different options before you commit yourself to her majesties courts...
