The check is in the . . . .

As one of my freelance friends recently noted on a Facebook post, the best days in a freelancer’s life are when the checks arrive. Lately, those days have been farther and farther apart.

This is the first year in 10 years of freelancing that I’ve actually woken up in the middle of the night worried about cash flow. The money is there–I’ve done the work and billed the invoices. But one large client went into Chapter 11 just as I was completing the first third of a major project. No worries, the editor assured me. All freelancers will be paid. Well, it took several calls and threats to stop work on the project before the second check finally arrived. Thankfully, the third check arrived with no problems.

Another client, a large professional medical organization, keeps “losing” my paperwork.

But the excuse that really makes me crazy is when I’m told that since my client’s client hasn’t paid them, they can’t pay me. Um, excuse me?

My contract is with you, not your client.  This is like me telling the guy currently painting my house that I can’t pay him for three months because my clients haven’t paid me. Imaging telling that to our power company, mortgage company, grocery store, etc.

The thing is, while many of us make a good living, most of us are really small potatoes in the scheme of things. We’re the vendors who can easily be offended (I guess) because there are always more medical writers out there to take a job.

I think we need a list on the American Medical Writers Association that provides information about time to payment for companies, a list that will warn freelancers which companies are having problems so we can steer clear or take other steps to protect ourselves. Having once lost $4,000 because a company went into Chapter 9 two days after I handed in a project, you can imagine how skittish I am.

Other things we can do (and I try to do) is get one-third of the project fee up front, before starting the work. This doesn’t always work, of course, because most projects are on such tight timelines you can’t always wait for the check before starting.

We can try including payment terms in the contract, but this only gets you at as far as you’re willing to hire a lawyer. Many have suggested adding a late fee. . but I honestly don’t think it would be paid.

Anyway, let me know your thoughts about getting clients to pay in a timely (read: 30-45 days) manner. Are you having similar problems this year?

15 Responses to “The check is in the . . . .”

  1. Lindasy Rosenwald

    Lindsay Rosenwald http://www.nytimes.com/1988/12/14/business/business-people-dh-blair-picks-doctor-as-director-of-finance.html Rosenwald, 33, specializes in finding and underwriting promising medical and biotechnology companies

  2. Bruce

    After a bit of research, I discovered that paying vendors late is a well known strategy called “stretching accounts payable.” It's done to improve cash flow and, as the sources I consulted said, “cash is king.” The trick is to pay your essential vendors first; everyone else waits. I swear they must train people to appease angry vendors with empty promises.

    Now that you know this, here's a counterstrategy:
    – tell the client up front you will tolerate no covert payment stretching; if they are strapped for cash, they need to tell you about it. State you willingness to negotiate alternate terms, partial payments, or discounts on early payment.
    – Once your invoice is past due, get very aggressive about being paid. Accept no lines about lost invoices or soothing promises of payment 'as soon as possible.' Get them to commit to a date and time by which the check will in your hands. If it isn't, then you have more ammo to sue them. Don't hesitate to hire a lawyer to write a firm letter.
    – Let them know how angry you are being treated so unethically and how disappointed you are that a respected company would so easily damage its vendor relationships by paying late. They will be remembered for this behavior when good times return. Reputations spread.
    – Reward your ethical clients by being loyal to them in good times. Shun the stretchers. What goes around comes around.

    Bruce Wilson
    Montreal

  3. Anonymous

    Have you ever heard of Suge Knight? Chances are you haven't. If you have, you know this man to be a huge, intimidating, fear-causing person whose mere name induces fear in the recording industry. Let me say that I am nothing like Suge Knight. But allow me to tell you that I learned one thing from Suge Knight – if you want to get paid, show up at the company, unannounced, and ask to see the editor for whom you did the work. I guarantee you will see that money. I have been paid late for work. Clients have “lost” my invoices. People have often stopped returning my emails or calls. But all in all, I have never not been paid for work I have done, because I am willing to go to the source to get my money.

  4. Deb Gordon

    Dorothy. . I am keeping a list that I will share with people who contribute to it; email me directly; also, tell your client that unless you are paid within the week, you will have to call THEIR client and let them know that the copyright for the project resides with you until you are paid. It worked for me. I assume you don't want to work for this client again?

  5. Dorothy L. Tengler

    This is a topic close to my heart. I've done a project for an agency who keeps telling me that I'm “scheduled” to be paid. But the check never arrives. Now I'm finished the project. The agency has sent the document to the pharma company, but I haven't been paid. I'm tired of emailing the president begging for my money. Is there a list of deadbeat agencies somewhere so that we can “warn” each other? How do I get my $4000.?

  6. Deb Gordon

    Heather, that's the same issue as what Time Magazine and others are doing, only they're forcing freelancers to give a discount in order to get paid in time; I don't think we should have to discount our fees in order to get paid in a timely manner. I know my mortgage company doesn't do that; nor my painter; nor my grocery store. . .

  7. Heather

    What about incentivizing people to pay faster? During cash flow 101 with SCORE, the counselor talked about giving a 2% discount for payment in 7 days. Apparently most companies will bite. I am reading the Ultimate Consultant (good book) and he talks about incentivizing people to pay the whole fee up front using a discount (5%). I'm contemplating trying this in 2010.
    Though we do have it better than magazine writers where 90 day terms are standard.

  8. Dianne P

    I hear you! Furthermore, it torques me off when a client delays getting me a contract or statement of work but I have to begin writing to meet the deadline. Meanwhile, I can't submit an invoice because the SOW/contract is not on file. So irritating.

    I had a new client get angry at me because I pushed for a SOW–he said they do work 'on a handshake.' Well, I can't eat a handshake.

  9. Jane

    There are some agencies that really do value brilliant writing, recognize what great editorial looks like, value the 'devil in the detail' approach, and pay on time. At Mash we believe fantastic writers are a true asset to the team and because we value your inputs, talents and ability we pay not only on time but often in advance on a phased basis. If you'd like to work with us – contact me at Jane@mashhealth.com

  10. Caitlin Rothermel

    This is absolutely the case for me. I am currently owed more money than I have ever been before. At the moment, I'm not doubting that I will eventually see it, but the work I am needing to put into following it up has been enormous. Plus, I'd like to buy some Christmas presents for my kids this year….sniff!

  11. Ovi

    This is a general problem, valid for all fiels. I am into medical elearning, 3D simulations etc. The absoulte same thing happens there. Plus the re-production of the content (digital era) and you are absoultely right. Getting a lawyer it's an option that can prove costlier.
    So the pahrma SSRI business goes up, along with one's own weight.
    heh..
    I would be interested too in the boiler plate of the contract.. I can share mine..

  12. About me:

    Thanks so much, Dr. Sergio! Keep checking in.

  13. Dr Sergio

    Debra, it seems like we have all the same vibes and problems (and the same desks!). Working freelance is an emotional roller coaster you feel up and up one week and down in the dumps the next, but well that´s life. I´m glad you started such an interesting blog. It is good for your readers and helps your catharsis I´m sure. Keep up the good work.

  14. About me:

    Thanks, Larry. Email is on the way. Great advice.

  15. larry marion

    Deb, you're not alone to be concerned. Freelance writers are often viewed as expendable and therefore the first to be screwed.

    let me pass on some advice that others gave me:
    your agreement should say that copyright doesn't transfer until you get paid. i know you're probably doing work for hire, but you should try to amend the agreement to say that the copyright doesn't transfer to your publisher until you're paid. since copyright violations trigger triple damages, that gets the CFO's attention.
    asking for somethign up front when dealing with a small/shaky client is always a good idea. think about 50% upon delivery of the initial outline if you're concerned about the client's stability.
    late fees have worked as a deterent. there were years when the late fees for my company hit $1k. publishers fought them, but your counter argument is “this shouldn't be an issue if you pay on time. Or are you planning to delay payments? if so, then my fee goes up 10%.”
    you don't need a lawyer to include payment terms. just borrow someone else's boilerplate. send me an email and i'll share mine.
    lmarion@triangle-publishing.com

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