This information is geared towards Australian freelancers. I don’t know what the system is for people working in other countries.
This question has been coming up a lot lately in a lot of the groups I am involved in. So I thought I would list the options out here for you.
Get it in writing
If you don’t get an actual contract or brief for the work, an email outlining the work you need to do, how much you will be paid and when your deadline is and when payment is due will suffice.
But always get something and always check your contracts for issues with rights and payment.
On your invoices, list your ABN.
If you do not list your ABN, clients can legally withhold part of your payment from you.
List the due date on which payment is required and also whether it is 14 days or 30 days and so on.
List all the means by which you can be paid as well as contact details for you in case they need to get in touch with you.
Address it to the person in charge of the invoice or payment on the client end and send it to both the people in charge of paying you and the people who commissioned or hired you.
If you charge GST, list your invoice as a tax invoice. If you do not charge GST, state very clearly on the invoice that you do not do so.
The first follow up
How often you do this depends on how much you want to give them the benefit of doubt.
If it has been a week after the due date, send a reminder. This should be a letter or an email – something that you can keep a copy of.
Remind them of who commissioned you, when the work was published, when you invoiced, who you invoiced, for how much and when payment was due.
This allows them to see if someone gave you the wrong information about where to send an invoice or some other similar miscommunication.
The next follow up
If you still don’t hear from them within another two weeks, follow up again. Be it by phone, email or letter or other method, keep a log of when you get in touch with the client and if there is any response.
This time let them know that you sent a reminder email.
Some of my freelancer friends send payment reminders and number them in the subject line of the email: “Payment Reminder #2” and so on.
Others charge overdue/late payment fees on their invoices often by a percentage such as 2%.
Some try to avoid the problem by making sure that they get half the payment before starting the work. This cannot always be applied to everyone’s situation as a freelancer though.
This is usually when the questions get asked.
The letter of demand
This is an assertive letter that is a final reminder.
There are templates provided by business.gov.au for sending letters of demand. There is no charge for doing so.
You can also get in touch with a lawyer to ask them to send a letter of demand on your behalf or take your case to your union who will send a letter on your behalf for you.
This is usually the step at which most people pay.
Mediation can be a very informal thing but generally this means someone from the client side and someone from your side have to negotiate through a third party on how to resolve this pay dispute.
Most clients do not want to end up at this stage.
If mediation fails, it can then get escalated to an actual court case.
Discussion and negotiation are cheaper than the next possible steps such as engaging a collection agency or taking it to court.
You can go through a collection agency
Several people I know do this and have done this successfully through an agency called Collectmore. I have never used them but if anyone else has and would like to let me know what they were like, leave a comment.
These collection agencies usually take a small fee once your money is recovered but never before.
You have every right to do this as this is money owed to you.
Who can help me?
You can get in touch with the following people to help you:
- a lawyer: your state’s Law Society/Law Institute will assist you.
- your local business centre: BEC Australia has a list of all Business Enterprise Centres.
- each state also has a Small Business Commissioner you can speak to.
- your union can also assist you: the MEAA is your union if you are involved in media or publishing but if you are in another field of work, your union should be able to assist you with chasing late payments if you are an independent contractor
- debt collection agencies.
For a far more indepth document that also has links to free/low cost legal services that you can use in this case and a more detailed explanation of mediation, arbitration, going to court and other steps and methods of resolving such a dispute, have a look at this document.
This document is a template for a standard letter of demand.
If you want to know more about freelancing, I will be running an online webinar through Writers Victoria on February 4 on all things freelancing for beginners.
It only costs $20 to $45 and you can get 20% off if you book before February.
It is the cheapest I have ever been able to offer a course (usually I don’t set the rates).
Late payments will be just one of the things discussed.