This is a true account of the current situation of a freelance colleague known to us at The Freelance Collective. This successful website developer offers a range of creative services, but due to a range of late paying clients, her bank account currently contains just $0.56c., and she’s owned more than $20,000 by a range of clients. She has called on dear friends to deliver food parcels until her clients pay and she can afford to go to the supermarket. This is her story.
** UPDATE: In a surprising and heart-warming turn, a number of the freelancers listed on The Freelance Collective were so touched by one of their own struggling like this, they personally gave out of their own pocket to our anonymous freelance friend. Between us, we raised $475 for her, enabling her to go to the supermarket and get on top of a couple of pressing bills. **
I’m a successful Melbourne freelancer. And I’m poor.
I’ve hit a perfect storm of non-payment that has utterly stopped me in my tracks. A long-term retainer client put the work on hold, effective immediately, with no notice.
Another client, who is a very large business, has been fussing and delaying on a very large final payment (which has affected six people, I’m just one of them) for a project long delivered, due to internal politics.
Another client has just disappeared, owing a few thousand. No calls, no emails, nowhere to be seen.
Another client has been sitting on draft work that’s been delivered for six weeks, with no feedback or sign-off, so is now disputing the invoice.
An ad agency I do work with across four separate clients is going through a cash flow crunch after losing a big client. They used to pay on 7-day terms and were quick, and now they’re insisting on 60 days terms until they get through it.
And a major three month project that was due to start last month (they are great payers, awesome day rate, pay fast) was put on hold until the new financial year, only notifying me when I showed up at their office to get started.
The stress levels have been unreal
When you’ve got a full invoice pipeline representing delivered work, and for a range of reasons it’s almost impossible to get debt collectors or legal on them, plus a full pipeline of upcoming back-up work disappears overnight, it’s really tough. Each one on their own would be frustrating and a bit disruptive, but to have so much happen all within a short timeframe has been like nothing I’ve seen before. It’s been really hard to manage these clients to keep the lines of communication open to get the funds in, find new replacement clients and work on short notice, and try and talk to suppliers all at once.
Let me try and describe it for you
It’s possible to live really lean, and I don’t have a problem with that as such. Aside from having to rely on friends dropping food by and having to cancel social engagements and make excuses, when cash flow gets that tight, it’s hard to run a business.
When your accounting app is frozen, directly preventing you from quoting and invoicing. When your Myki empties out and you have to get to meetings in town. When your Creative Cloud subscription gets suspended. When you’re watching the due date of your monthly internet bill like a hawk because if that goes down, you’re screwed. That’s all really stressful.
But the absolute worst is when you’re holding up payment to the awesome suppliers you work with, most of whom are people you know really well and work with all the time. It’s a knock-on effect and it’s the absolute pits. And when there’s nothing tangible you can say to them, aside from ‘please be patient’, I think that’s the hardest thing of all, especially when you’ve done all this work, billed it out, and know the situation can change in a heartbeat and it just takes one client to get off their bums and process a payment, changing everything.
Last year, things were different
I’ve freelanced for long enough to have gone through a range of incredibly busy times and the occasional quiet one. It does ebb and flow a bit. Over that time, there’s always been a percentage of clients who are late to pay or never pay at all, and I’ve gone through the debt collection process more than once so I like to think I’ve got a pretty good handle on contracts, terms, getting deposits and the like. I don’t have the perfect mix, but for the most part, it works pretty well. Last year, for example, was a really fantastic and successful year.
Could it have been avoided? Well, no.
Some of this is just all part of freelancing and was completely unavoidable. Taken as individual incidents, they’re just business bumps in the road. But this collective ‘perfect storm’ has also shown me that it’s important to have strong terms and contracts in place, and minimise exposure to one client or company. It’s also been a stark reminder to stay on top of the business development train no matter how busy you are, because a pipeline that looks full can change on a dime.
But you can mitigate your risk
For larger contracts or projects, split them up into specific deliverables rather than one big one, and that way the client can’t hold up a big payment or hold you to ransom. Stay client diversified. Have good contracts, even if they’re just one page long and you trust the client. And don’t ever take your eyes off your business development and quoting pipeline, no matter how busy you get.
And don’t keep working with bad payers, no matter what. You’re better off resigning accounts and making room for new clients than have people systematically take advantage of you.
Writing this has been carthartic. Must. Stop. Grinding. Teeth.
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