Your cheque is in the post

By Steve Hart Courtesy of Freelance Market

When times get tough, publishers - among others - start 'managing' their money extremely carefully. Cash flow becomes their main focus.

The downside for freelancers is that invoices can go unpaid for months. No matter how prominent you place the words 'Seven Day Invoice' on your bill, requests will often be ignored.

While many editors understand the plight of freelancers, it is often the case that the bean counters - who get paid every two weeks come rain or shine - may have little concept of what it is like to have no regular income.

So what can you do? Graham Skipper, a partner in accountancy and business advisory firm Skipper Lay & Associates says cash is the biggest problem in a downturn.

"Suddenly people stop paying you - so you have to keep control of your cash," says Skipper. "You have to keep control of your debtors and that is the least pleasant part of running a business. But it is the thing that is most overlooked."

Taking the shy retiring approach is not recommended when it comes to chasing late payers, just ask anyone who has sat back patiently only to find the late payer has sunk without a trace. Skipper advises freelancers to be proactive and use their communication skills to hunt down the person with the money.

"Be proactive and talk to your slow payers," he says.

"If you offer them a 30 day credit, then as soon as you reach day 31 you should call them - don't wait three months. It is a pain in the neck because business owners would rather do what they are best at."

He says freelancers, especially those who completely rely on their freelance income, should do forward cash modelling to see when the tipping point will come - when they will go into overdraft and end up paying bank charges and interest as a direct result of clients not paying up. Look at your regular out goings, work out what you need to cover them and see how long you can go without your invoices being paid.

And with publishers trimming costs freelancers can quickly find themselves out of work. Now is the time to keep an eye on what your regular clients are doing and see if there are any signs of changes coming.

It maybe time to start scouring for new work. "You can bet your competitors will be chasing your customers," says Skipper.

"So stay ahead of them. Your customers have already shown they trust you and prefer to buy from you - so you have an edge over your competitors."

One freelancer, chasing payments this month going back to September says they were surprised when their client's pay office explained they wouldn't pay them until they had been paid by their customers.

The firm in question emailed the freelancer saying: "Like you, our terms are 7 days, but our current debtor days stand at just under 60 [days] with many firms taking considerably longer. That is the sole reason why payment for your invoices has been delayed. I don't want or like or feel good about doing that - I simply have no choice."

Press Pack believes that clients such as this do have choices and should not pass on their financial issues to sole traders such as freelancers. Why should a freelancer be out of pocket, perhaps forced to pay bank charges, just because their clients cannot manage their own affairs and honour their payment agreements? The freelancer in this case has stopped working for the late-paying firm.

Press Pack believes the bottom line is that freelancers must see themselves as a business and act as such when dealing with all clients. A late paying client may not be worth having, if only because of the time spent chasing payment. As soon as something feels like it is too much trouble then it probably is.