Pay me please!
July 8, 2010 11:12 AM   Subscribe

I do freelance work for a company that I suspect may be in financial trouble. How do I protect myself? How best to find out what's going on?

For several years I've done editing work for a publishing company based in Bristol, UK. I live in Manchester and all my communication with the company is via email and post. The work has been regular and now accounts for a significant chunk of my income. I don't have a contract with the company: they send me work, I return it together with an invoice, and I await payment, which is by cheque. Over the years, the period between invoicing and payment has grown longer, but with some variation (I have often tried to work out the mystifying cycles that govern their payment system). Whenever payment has been especially late, however, a quick email has seen a cheque sent out within a day or two.

In recent months, payment has actually quickened somewhat. But I've got the feeling that there isn't as much work as there once was - whereas previously I was being sent a new project before I'd finished with the old, there have been gaps while they wait for something to come in.

Last week, I was still waiting payment for a job I completed in May. I emailed my contact at the company, who said he'd make sure a cheque was sent out, and sure enough it came on Saturday. Before I'd had a chance to bank it, though, I got an email on Monday asking me to hold off for a few days, because other freelancers had been reporting cheques bouncing, and he wanted to make sure that wouldn't happen with mine. OK, fair enough, I said - I'd wait until Friday. This morning (today is Thursday in anonymous-land) came another email: the company is setting up a new bank account, so could I tear up the cheque I received and they'd send me a new one next week?

Clearly, readers of this question will know less than I do about what is going on with this company. But my first question, as an ignoramus when it comes to how companies are run and freelancing finances in general, is how likely is it that these problems could be temporary glitches for what is otherwise a stable company? Or are bounced cheques always a sign of serious trouble?

Secondly, if the company does have problems, how do I go about increasing my chances of being paid for the job I finished in May, and the jobs I have done since then (for which I would normally be expecting to receive payment in a week or two)? I mean, I am reluctant to ask, "How late will I be paid?" or even "Will I be paid?" because these questions in their meekness are almost an invitation to pay me late or not at all.

Thirdly, what should I do about the hefty project that I am working on just now and that will take up the rest of my month? My contact mentioned in his email that if I wanted I could delay working on this until I'd been paid for the earlier job. What does this offer mean?

I've seen plenty of questions on Ask Metafilter about the need for freelancers to be working under a contract. I have no idea if this advice is specific to the US, or how freelancing for publishing companies normally works in the UK: as I said above, I am quite ignorant of such matters. All I know is that this is how this company operates, and it has provided me with reliable income for several years. My questions are specifically related to how I would do myself most good by acting now, under these terms.

Throwaway email:
posted by anonymous to Work & Money (9 answers total) 2 users marked this as a favorite
Like you said, if you can't tell what's going on, it's going to be much harder for us to guess. But the red flags are waving, from the bouncing cheques to the recommendation that you cease working on your current project until you get paid. Yikes.

Whatever you do, don't tear that cheque up. Document every bit of correspondence. And don't do another shred of work for them until you get paid.
posted by futureisunwritten at 11:27 AM on July 8, 2010

Call your contact. In the course of the discussion, express concern for their job security. If they sense danger, you'll hear about it.

Start looking for a new client or 2. Not to dump this client, but as a cushion
posted by theora55 at 11:30 AM on July 8, 2010

I don't know anything about discovering business health in the UK. In the US I would get a Dunne and Bradstreet report. The report will give information on creditors, legal problems and a myriad of other things. It makes no recomendations. You'd have to decide for yourself what to do. I would ask my stock broker to get the report, so that I could avoid the fee. A little research as shown that D&B is available in the UK at
D&B UK and Ireland
posted by Hilbert at 11:37 AM on July 8, 2010 [2 favorites]

I second both theora55 and Hilbert. Ask your contact informally if everything is ok and do some research into public records or &B which is a great source. Even if you have to pay, it may likely be worth it.

Red flags are waving though.
posted by JohnnyGunn at 11:48 AM on July 8, 2010

talk as much as you can to your contact. stop emailing and start using the phone. build on any relationships you have.

you may find that if they are having a bumpy patch, the contractors who help them get through it are the ones they retain for more work when things are on the up.
posted by Frasermoo at 11:53 AM on July 8, 2010

I would stop work on the hefty project that is in progress. Give the client the heads up but don't go into more debt by playing nice. They made their money off of you with the other jobs and are counting on you to not complain.

They seem to know they are having money problems if they are already offering for you to hold on the current project. Let them clear their debts then carry on.

FWIW, I am a freelancer too and have a rule of work stoppages after 3 weeks of non-payment. I have gotten burned too many times being nice and just can't afford to be spending time working for free when I could be looking for other jobs or completing jobs for clients that have a good payment history.
posted by lampshade at 12:10 PM on July 8, 2010

On the other hand... it could be a simple case of the checking account information being compromised and someone tried to swipe money out of the account. It could take several days to straighten something like that out. But I don't think they would blame you if you back-burnered the project you are currently working on for them.
posted by Doohickie at 1:12 PM on July 8, 2010

Definitely stop work on anything you're working on, and explain that you'll be happy to finish the work when your outstanding invoice is paid. Do not deliver anything else until the check has cleared.

Unfortunately as a freelancer, you get paid last so you have to watch out for your own interests however unpleasant that is. However, freelancers are also the first to know when there's trouble because of debaucles like this.

So assume they're going out of business and request payment up front. They may not, but if they do you don't want to be left in the lurch. This is experience talking.
posted by shopefowler at 7:14 PM on July 8, 2010

Not normal. Bad signs and red flags abound.

DO NOT let yourself get behind with this client any more than you are willing to lose! Do not keep booking hours if they are in arrears! Ask for payment in advance, or at the very least tell them your payment terms are now net 7!

Your polite refusal to work until your account is current is the biggest weapon you have. Once they no longer need you to work, their motivation to pay you will decrease dramatically.

So speaks a freelancer who got screwed to the tune of $9K last year by a company that went boots up, filed for bankruptcy, and now appears to have reopened in India.
posted by ottereroticist at 6:52 AM on July 9, 2010

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