Freelance Payment Problem

jwalker80

Hi,

I worked freelance with a graphic design agency a few months ago and I am having difficulty in getting payment.

I have been waiting 90 days since the date I issued them an invoice for the work. I have a 30 day payment term on my invoice.

I have contacted them numerous times by phone and email regarding this.

They say that they are waiting for payment from a client before they can pay me.
I have worked for a few different agencies and I have not encountered this problem before. Normally the agency will have a pre-defined budget from which they pay me. I don't think it's a valid excuse for the agency to blame non-payment from one of their clients (whether this is true or not).

I worked on 6 different clients during my time on behalf of the company.

I was thinking that my next move will be to contact their clients directly to see if I can shed light on the matter. This may get the agency to make payment if I tell the agency that I will do this.

After that my next step will be the legal route with a solicitor's letter.

They owe me €8000

Does anyone have any experience/advice/thoughts on a situation like this?

Thanks

Axwell

I wouldn't go contacting the clients directly - that will only more than likely cause more bad blood between the agency and yourself going behind their back. It will also not look good to their clients that you are effectively chasing them for money so that you can get paid from your agency.

I am guessing you have no contract in place with them agreeing any terms etc? On your invoice have you any other terms apart from the 30 days payment? For the future I would add in a clause saying late payments will suffer a late charge of x percent per week or similar so you dont have this problem again and get a basic contract together.

As for the agency I would tell them that the terms as per the the invoice are payment in 30 days. That they are the client and the invoice is for work done for them, not for their clients so it is not your concern if they are waiting on money from those and you want final payment made within 5 days or your solicitor will be in touch.

Take it also as a lesson learned in having tighter paper work in place for such dealings again so you dont get messed around in future or have more of a comeback based on agreed terms etc.

Gloomtastic!

I think you can take their excuse for non-payment with a pinch of salt. They aren't paying you because they either haven't got the money or they don't want to pay you.

Before they pay you they have to pay their staff, their regular suppliers, taxman, utilities and of course themselves. You are not their priority. You need to change their minds on this.

Unlike the poster above, I would not be concerned about contacting the clients. Have you got it in writing ie an email, that they aren't paying because they are waiting for payment from a client? You will not be working for the agency again, what concern is it of yours. I would use it as a leveraging tool to gain payment. 'Unless payment is received by x date, I shall be contacting all 6 clients staing I am still awaiting payment 90 days after invoice'. You can only state true facts, anything else leaves you open to libel.

Alternatives:

1. Offer a 10% discount for full payment within 10 working days.
2. See a solicitor and go the legal route.
3. Sell the debt to a debt collector
4. Doorstep them until you receive full payment.

Whatever route you go down make sure you carry out every threat and to the day. Otherwise they will not believe anything you say..............

jwalker80

Thanks guys,

The only terms I have on my invoice is the 30 days payment term clause.

I would imagine that all invoices are covered by the Commercial Transactions Regulations which states after 60 days they can be charged interest.

it wont let me post links -
(w w w.) djei.ie/enterprise/smes/latepay.htm


I don't care about charging interest to be honest, I just want to get paid without any more hassle. Although if they force me to go the legal route I might slap on the interest.

I think I will doorstep them with a verbal warning that I will contact the clients if not paid by x date. I wont be working for them again.

Then depending on the response Ill send them an email with a warning of solicitors letter by x date.

Cheers

Axwell

My reply was under the assumption you might want to work for them again if the money and work was decent. 6 clients through the agency is a nice bit of portfolio work. But if you arent going to work for them anymore then you really have nothing to lose contacting the clients. However in the event some or all of the clients say they paid, which is likely then you are back to square one so I am not sure how much benefit it will be.

The threat of doing it might be more worthwhile with the agency and if that doesnt get a response I would just go with a solicitor letter in the meantime contacting the clients.

Let us know how you get on.

arctictree

A lot of this boils down to the type of people and policies that run the company.

I have a number of suppliers and I pay them on invoice as that is the way I do business.

My customers fall into a number of categories:

1) Those who pay on invoice
2) Those who pay religiously after X days
3) Those who delay payments until 'their' customer has paid.

In my experience, no amount of argument will change one type into the other.

Gloomtastic!

arctictree wrote: »

A lot of this boils down to the type of people and policies that run the company.

I have a number of suppliers and I pay them on invoice as that is the way I do business.

My customers fall into a number of categories:

1) Those who pay on invoice
2) Those who pay religiously after X days
3) Those who delay payments until 'their' customer has paid.

In my experience, no amount of argument will change one type into the other.

You can generalise it a bit more. Three reasons an invoice isn't paid -
1. Inefficiency
2. Inability
3. Company policy

Your clients all fall under category 3. (Some companies also have a policy of not paying any suppliers until they are forced to).

The OP's agency falls into either category 2 or 3 but probably 2. He needs to get to the top of the list of creditors by making himself as difficult and as troublesome to the agency as possible. He's not looking to change them, he just wants to get paid before they go bust! (And if they are waiting for a client to pay them before they pay their suppliers, what happens if it doesn't?)