Posted on 13th August 2018 by Maddy Abela
This is Martha Sprackland. This is how she gets people to pay on time. And she wants all freelance creatives to do the same.
Ok, wtf is she talking about? If you saw the word 'invoice' and immediately fell asleep then you're forgiven as finances are indeed v boring. HOWEVER, we all wanna make sure our clients pay on time so we can be free of money troubles, right? Oh yes, this will be worth propping your eyes open with lollipop sticks, we promise.
The late payment of commercial debts act (1998) - it’s a long ass name, we know - can save you more than some pennies.
So, what is the law? Well, if you’re not paid by the agreed date that you and your client have decided on (usually decided in an email/contract/any written form), you can charge interest AND get additional money. Sounds pretty sweet right? But how does it work?
The Bank of England (snooze) charges interest to the business of 0.5% and the rate that you can charge a business who hasn’t paid you (on top of the Bank of England interest) is 8%!
If we lost you at the word 'interest', don't worry, we will explain all. Simply put, 'interest' is a percentage of the amount of money you’re meant to be paid. For instance, if you were meant to be paid £100 for a song you wrote, 8% of that would be £8.
However, that’s not ALL you’re entitled to. As well as interest, you are also entitled to a fixed sum, dependent on how much is owed to you. Let’s break this down...
If you’re owed less than £1,000, you’re entitled to £40
If you’re owed between £1,000-£9,999, you’re entitled to £70
If you’re owed £10,000 or more, you’re entitled to £100
But remember you’re entitled to a fixed fee AND the interest rate, so make sure you collect both if you’re being paid late. Martha also said it's worth noting 'that the 14 days [stated on her payment terms] is non-standard. It’s 30, usually - my 14 often makes more sense in small arts contexts e.g. poetry'. Thanks Martha!
So, give it a go. It’s understandable if you’re a bit scared to approach a business and ask them to cough up the money, but just think about this - if you've already spoken about the penalty in your terms & conditions/contract that was agreed on by the client before you started work, then they have no leg to stand on. And if they give you grief, tell us what's happened on the Tell ERIC private facebook group and we can help you out!
Written by Maddy Abela