Late Payments: How To Tackle Tardy PayersMadi
For small businesses and freelancers, finding clients is only half of the struggle. Managing your payments can be tricky at the best of times, and the problem is only made worse when payments are late. Here’s what to do if your clients aren’t punctual with pay.
From trades, to media, to agriculture – the last few years have seen a rise in precarious employment across almost all industries, with short-term and freelance contracts becoming increasingly common. But with late payments among freelancers being described as “an absolute epidemic”, it can be a headache for workers trying to navigate this new normal. Here are our tips for dealing with late payments.
Be clear on the facts
Before you approach a client to point out that a payment for services is overdue, make sure you have all of the necessary details on-hand. This includes the paper trail outlining the agreement for payment (for example, an email from the client confirming your requested date for payment); the amount of the payment owing, the specific service you provided, and the amount of time that has passed since the payment should have been made.
Reiterate your terms
For the relationship’s sake, if a client who usually pays on time is late with a payment once, you may want to give them the opportunity to do the right thing by giving them a friendly reminder – whether in-person, via email, or through a phone call – that the payment hasn’t been made this time around.
If the client is consistently late with their payments, it’s in your interest to make your request as clear as possible: outline what the consequences will be if they do not make the overdue payment within a certain time frame (for example, that you will withdraw your services or escalate the claim); and that a failure to respond will likely affect your decision to do business with them in the future.
Know your rights – and that help is out there
As a small business owner or freelancer, it can be overwhelming navigating the business world, dealing with late payments, and running into a dispute. But there are people who can help you – often at an expense, but in some situations, for free.
Consider their services if you find yourself in the middle of a dispute involving severe underpayments:
Lawyers: The Law Society or Law Institute in your state or territory may be able to provide you with legal advice or resources to advance your claim.
Business Centres: BEC Australia lists all of the nation’s Business Enterprise Centres.
Small Business Commissioners: Each state and territory has a Commissioner who could assist you.
Unions: There are relevant unions for many different fields of work. If you’re an independent contractor who is a member of a union, your union should be able to help you chase up late payments.
Debt collection agencies: Many debt collection agencies are geare