Freelancer Finance Cost of Living How to tackle late paid invoices as a freelancer By Staff Reporter Last updated Apr 6, 2023 Late paid invoices can causes financial and personal problems for freelancers/ Photo by Mikhail Nilov via Pexels Are late payments causing you financial problems? Here are your rights about getting paid on time Late paid invoices can wreak havoc on your finances and personal life as a freelancer. The added struggle of higher interest rates and inflation from the cost of living crisis does not help. That’s why it is important to always have payment terms written in your contract and on your invoices. Then there’s no question about what your expectations are. Be informed, be Freelancer Informed! | Freelance Informer Before chasing an invoice, make sure it left your email outbox or invoicing application. If it has been delivered and the payment is still later than usual, then it might mean there has been a change of personnel or someone is on holiday. People leave positions in companies all the time so ensure every six months that the same person in your client’s organisation is still responsible for paying your invoices. It is no excuse of course for them not to have something in place to ensure invoices are paid on time even when there is a change of personnel or someone goes on holiday, but it can happen. Approaching this calmly and professionally usually gets things sorted. What’s the latest your invoice could get paid if not specified? You can set your own payment terms, such as discounts for early payment and payment upfront. Unless you agree on a payment date, the customer must pay you within 30 days of getting your invoice or the goods or service. That’s according to the UK government . You can use a statutory demand to formally request payment of what you’re owed if things become seriously late. Unless you have specified otherwise payment terms for both public and private sector payees are 30 days in the UK. Some sources are saying private companies have longer to pay, but that is not the case anymore, especially if you are solo self-employed. Why should a small business be giving a larger one credit terms over 30 days? “If you don’t agree on a payment date when you create an invoice , the payment is legally deemed to be late from 30 days after either the customer receives the invoice or you provide goods or service (if this is later),” says self-employed insurer Market Direct in its guide to unpaid invoices. How much interest can you charge on overdue invoices? You have the right to charge interest for late payment , but you can choose not to. Here Markel lays out some important steps you can take if unpaid invoices become a problem. “You have a statutory right to charge interest on late payments. The amount you can charge is the Bank of England (BoE) base rate plus 8%. So, for […]
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