Late Invoice Payment

[freelancewritingstudio]

To paint a picture, I have been working with a client since around April. The agreement we had was that the invoices would be paid around six weeks after submission as the client requested that he pays me once he has been paid. Not ideal I guess but up until August it worked.

I sent the August invoice on the 4th September - up to today, it has still not been paid, making it 2 months and 25 days.
I continued working for him, and subsequently sent the September invoice,and that was paid on November 19th but before the August Invoice which I found was strange but it was only for £240 inc VAT.
I have since worked for him in October and have just completed the November work for him - both invoices have been received by the client.

Now, I know a few might say that I should have stopped working with him, but work has been hard to come by in recent months due to AI so I have to take what I can get.

So, as it stands, the August invoice is outstanding (£885 inc VAT), the October invoice is outstanding (£495 inc VAT) and now the November invoice has been sent. As per our initial agreement of 6 weeks for payment, the October invoice still has a few weeks remaining but now I am running out of patience with regards to the August invoice.

I have spoken with the client about this. He has reassured me that the invoice will be paid but he has to wait until his client pays him - this is not how it should work - my contract is with him and his contract is with his client, so it is on him to pay me. Upon our recent conversation, he has asked for me to wait for another four weeks and if I cannot wait, then there is nothing he can do, this would more than likely make it four months until he hopes to pay me.

I have looked into this in terms of late payments and according to the Gov website, I can charge a one off fee of £40 given the amount of the invoice plus annual interest of 8% + the base rate. It also states that if an invoice is more than 30 days late then I can charge this interest etc etc. So I have some questions to ask here:

1. Would you now proceed in claiming this interest from him from 30 days from the 4th September for the August invoice?
2. Would you also add the October invoice into this, ensuring it is 30 days from when the invoice was submitted (31st October)
3. If I do action the above, how do I invoice him for this amount? Based on these two invoices, the total would be £1,380, so how would I invoice him for this + the interest? Would it be a case of sending him monthly invoices with the new interest added on?

Any advice would be great and apologies if this is in the wrong section.

Thanks in advance.

 

[DontAsk]

Do you want to work with the client again?

 

[Frank the Insurance guy]

Hi @freelancewritingstudio ,

You really need some professional legal advice.

What is it that you do and what does your contract say regarding ownership of your work.

Ideally you should retain rights to your work until it has been paid for - if so, you could withdraw your authority for them (and their client) to use your content/work until the invoice has been paid.

Unfortunately, as is often the case, you may have been working for "free" - my advice is to stop work immediately. I know this will probably mean you will never get paid, but how much longer do you want to work for free.

If they don't pay take them to the small claims court.

Do you have business insurance? If so, check the policy as many will give you free access to legal advice.

 

[freelancewritingstudio]

Well, he does give me large paying jobs, so I would like to continue working with him if I am honest. However, given the amount owed, I am not bothered if I have to pursue this and lose him.

I am a freelance writer, and there is no contract in place. Although I know there should be, it is not something I have had in place with any client in ten years. I have been working with the client since March/April and he has paid every month up until July on time and the September invoice has been paid also. So as it stands, August, October and November are now outstanding. He has asked me to give him another four weeks and has said that I will be paid before the end of this month. I have told him that if I am not then I will be pursuing a claim so I guess it is just a case of waiting until the end of this month.

 

[eteb3]

I am a freelance writer, and there is no contract in place.

Then you own the copyright in your work:

https://www.legislation.gov.uk/ukpg...heading/authorship-and-ownership-of-copyright

If he’s using your copy already then you could tell him that due to nonpayment you’re withdrawing his implied licence to use your work.

 

[fisicx]

He’s not going to pay you. His client is not paying him so he can’t pay you.

Stop all work and put in a money claim today. You might be lucky and get something from him.

 

[eteb3]

If he’s using your copy already then you could tell him that due to nonpayment you’re withdrawing his implied licence to use your work.

Even better, if his client is using your copy, you can tell them they’re in breach of your copyright. Might be some leverage?

 

[freelancewritingstudio]

Hi,

Thanks very much for your help. I did give him until the end of this month to pay me but to be honest, I am getting fed up with him as I am emailing him for updates and he just is not responding.

My one question I have is down to the invoicing.

So, due to it being a late payment, the amount of interest is 8% + Base rate which is 5.25%. Obviously, if I send him an updated invoice today, it will include all the interest added up until today, but if he does not pay for another week or two etc etc, then obviously the amount on the invoice is incorrect which then means a new invoice is needed. How do I go about dealing with this?

Thanks

 

[fisicx]

Update the invoice with the new amount.

But he isn’t going to pay. Go direct to MCOL.

 

[freelancewritingstudio]

Thanks for the reply.

I have just sent him an email to tell him that the updated invoices will be heading his way later today and that I expect the invoices to be settled today, if not then I will going to MCOL. I have also asked him to request that his client remove my content immediately.

Thanks

 

[pentel]

To make a claim you need to send a letter before action which includes a deadline of 14 days from the date of the letter. We send this by recorded delivery and email. There are free templates on the internet.

At day 14 we complete the online claim form including the interest to that date but don't start the action. We send a copy of the claim to the debtor and give them 24 hours to pay. If they don't then we start the action.

They then have a period to respond with a defence or request extra time. If they don't file a defence and pay at that point it will be at least 6 weeks from sending the letter before action. or ignore everything it will take a lot longer....

 

[freelancewritingstudio]

Do you have to give them a deadline of 14 days informing them of when you are going to take action? I have told my client that payment has to be made today and he is saying that he cannot do that and is now asking that I wait 7 more days which I am not willing to do.

I have told him that if the payment is not made today then I will be going down the small claims route tomorrow so I would want to complete the online claim form then if I am honest. Would that be possible?

 

[freelancewritingstudio]

Client is saying that he cannot pay me today and that he will have no option other than to wind up his business.

 

[Newchodge]

Do you have to give them a deadline of 14 days informing them of when you are going to take action? I have told my client that payment has to be made today and he is saying that he cannot do that and is now asking that I wait 7 more days which I am not willing to do.

I have told him that if the payment is not made today then I will be going down the small claims route tomorrow so I would want to complete the online claim form then if I am honest. Would that be possible?

It is physically possible but will probably result in your claim being struck out for failure to follow procedure.

 

[pentel]

This gives some guidence

Making a small claim

Find out what to do before you start a small claim, how to start one and what it involves.

www.citizensadvice.org.uk

Client is saying that he cannot pay me today and that he will have no option other than to wind up his business.

Is your client a limited company or a sole trader. If a sole trader closing his business makes no difference. He is the business. He can stop trading but still has personal liability.

It might be worth talking to https://www.beaumont-recoveries.co.uk/ I have read some good things about them.

 

[freelancewritingstudio]

It is physically possible but will probably result in your claim being struck out for failure to follow procedure.

Thanks for this, I will of course give him the required time then.

 

[freelancewritingstudio]

This gives some guidence

Making a small claim

Find out what to do before you start a small claim, how to start one and what it involves.

www.citizensadvice.org.uk

Is your client a limited company or a sole trader. If a sole trader closing his business makes no difference. He is the business. He can stop trading but still has personal liability.

It might be worth talking to https://www.beaumont-recoveries.co.uk/ I have read some good things about them.

He is a limited company, so I am well aware that he can walk away but I am guessing that he is calling my bluff as he has been operating since 2014, so I don't think he is going to walk away because of this.

 

[freelancewritingstudio]

He is claiming that those additional 7 days will save his business but then he still has an October and November invoice outstanding that he needs to pay, so come the start of the new year, he will be in the same position that he is in now.

 

[IanSuth]

He is claiming that those additional 7 days will save his business but then he still has an October and November invoice outstanding that he needs to pay, so come the start of the new year, he will be in the same position that he is in now.

you could ask him what he can pay now to stop you proceeding

If you are lucky he is juggling creditors and paying you something will keep you off his back for a bit - if he still goes down you have had something - if he survives you can still chase for the rest

 

[freelancewritingstudio]

That is a good point to be honest about asking what he can pay now but then I have to think of what would be a suitable amount - would think 50% at least would be right. However, it is still agitating me knowing that there is an outstanding invoice that was submitted at the end of August that still has not been paid. These additional deadlines keep on coming and I have to stop somewhere I guess.

He is doing what I have been doing for years. I have taken on additional work from many clients and I then give that work to other writers while taking a cut, it has worked really well for me. Obviously, he is a one man band just like me but he is relying on being paid in order to be able to pay me whereas I always made sure I had money in the bank to pay my writers as I thought that was the only fair and right way to do it.

If he cannot afford to cover the cost of £1400 then I would think that he is running his business the wrong way. However, I have told him that perhaps he should also be chasing his client for payment in the same way that I am chasing him. Let's be honest, if a company settles a September invoice for £200 or so before the August invoice of £885, then you would instantly be questioning why they have done that. I know I would be and I am.

 

[DontAsk]

If you are lucky he is juggling creditors and paying you something will keep you off his back for a bit - if he still goes down you have had something - if he survives you can still chase for the rest

If he is already technically insolvent then that could put him at risk of the rules on preferential treatment of creditors.

 

[IanSuth]

If he is already technically insolvent then that could put him at risk of the rules on preferential treatment of creditors.

maybe - but i would rather have some £ and him be arguing with IP's than have no £ and him still be arguing with them as he paid someone else who shouted louder

 

[IanSuth]

That is a good point to be honest about asking what he can pay now but then I have to think of what would be a suitable amount - would think 50% at least would be right. However, it is still agitating me knowing that there is an outstanding invoice that was submitted at the end of August that still has not been paid. These additional deadlines keep on coming and I have to stop somewhere I guess.

He is doing what I have been doing for years. I have taken on additional work from many clients and I then give that work to other writers while taking a cut, it has worked really well for me. Obviously, he is a one man band just like me but he is relying on being paid in order to be able to pay me whereas I always made sure I had money in the bank to pay my writers as I thought that was the only fair and right way to do it.

If he cannot afford to cover the cost of £1400 then I would think that he is running his business the wrong way. However, I have told him that perhaps he should also be chasing his client for payment in the same way that I am chasing him. Let's be honest, if a company settles a September invoice for £200 or so before the August invoice of £885, then you would instantly be questioning why they have done that. I know I would be and I am.

i am sure he is down to his dregs of cash flow and juggling payments to keep as many creditors off his back for as long as possible.

But if he goes kaput you will get pennies in the pound if that so worth listening to anything he has to offer, just dont do any more work and spend time on other opportunities that will pay

 

[fisicx]

@freelancewritingstudio - you might get a dribble of cash but you are not going to get anywhere near the full amount. His business is going bust and he doesn’t have the cash to pay.

I doubt now even MCOL will achieve anything.

All of which means you are going to be out of pocket. Sorry to be all doom and gloom but the second the first invoice hadn’t been paid you should have stopped work.

 

[freelancewritingstudio]

If he is already technically insolvent then that could put him at risk of the rules on preferential treatment of creditors.

Are you able to elaborate on what you mean by that? Thanks

 

[freelancewritingstudio]

@freelancewritingstudio - you might get a dribble of cash but you are not going to get anywhere near the full amount. His business is going bust and he doesn’t have the cash to pay.

I doubt now even MCOL will achieve anything.

All of which means you are going to be out of pocket. Sorry to be all doom and gloom but the second the first invoice hadn’t been paid you should have stopped work.

I agree with you, payments always took around six weeks, by which point, the next batch of work would come through, so it was always done on that rolling basis and it worked well for four months.

 

[Newchodge]

Are you able to elaborate on what you mean by that? Thanks

If someone who is bust spends what little money they have paying one of their creditors, but not the others, they can be investogated and the recipient be required to repay the money. A debtor cannot 'prefer' one creditor over another.

 

[freelancewritingstudio]

I have thrown quite a lot at him

If someone who is bust spends what little money they have paying one of their creditors, but not the others, they can be investogated and the recipient be required to repay the money. A debtor cannot 'prefer' one creditor over another.

ah ok. I am not totally sure of his situation and given that he has been operating for almost ten years as a limited company, I assumed he would be more financially secure than he is letting on. After all, he is taking on this work and farming it out to me, so he must be doing alright. I only know that from experience because I only ever farmed out work if I had enough for myself, otherwise I would keep it and earn from it.

 

[freelancewritingstudio]

I have thrown a lot at him this morning - the threat of small claims, the copyright issues as well as the two amended invoices with interest and compensation charges added onto them. I feel as though asking for an advanced payment could make it look as though I am in the weaker position and desperate, especially after threatening him with all of that.

While I do not want to lose £1400, it would not cripple my business in the slightest, but of course, it is money that I have worked for so I want to make sure I get paid.

 

[fisicx]

The other option in future is payment on delivery. You write the copy, show a watermarked screenshot of the copy and send it once you have been paid.

 

[freelancewritingstudio]

The other option in future is payment on delivery. You write the copy, show a watermarked screenshot of the copy and send it once you have been paid.

To be honest, I do not think there is any scope of us working together again, even though he has said that there is work available this month but to be honest, I can cope without his work.

 

[fisicx]

To be honest, I do not think there is any scope of us working together again, even though he has said that there is work available this month but to be honest, I can cope without his work.

Do this with all clients. It's what I do and it means prompt payment every time.

 

[DontAsk]

ah ok. I am not totally sure of his situation and given that he has been operating for almost ten years as a limited company, I assumed he would be more financially secure than he is letting on.

What does his last filing at Companies House show?

 

[eteb3]

asking for an advanced payment could make it look as though I am in the weaker position and desperate

Not if you say, clearly and just diplomatically enough for English sensibilities, “your credit is shot to bits, you did this to yourself so take it or leave it”