A friend and fellow freelancer told me a story yesterday which made my blood run cold. Two days before starting work on a new contract, her client demanded that she cut her fee by 40%.
She was able to walk away from the work. As recession snaps at our heels, I do wonder if gazundering on this scale is going to become more widespread, and if it does are we just going to have to put up with it? Personally I haven’t found my rates being queried, but I am finding it increasingly difficult to get companies to pay within a reasonable time. Worst so far was a very well known company who took 75 days to cough up from receipt of my invoice – this means that work I did in June/July I got paid for in October. Fortunately I wasn’t relying on it to pay the mortgage!
Ian Monk at PR Week has been looking at the issue of late payment for small business for quite a while now and has reported on some real horror stories, including business being closed by cashflow problems, which make my experience look mild in comparison. I appreciate that the economy is hurting everyone, self-employed or not, but if we’re doing the work surely the very least we should expect is to be paid for it on time?
In case it’s useful to anyone, here is the Better Payment Practice campaign with advice about late payment legislation for small businesses. And here is a report on FreelanceUK about how useful the legislation is proving in practice…