According to a survey by invoice finance experts Access Commercial Finance, today signals the start of the most stressful week of the year for the UK’s freelancers.
The study, involving one thousand freelancers, found that the third week of February is when freelancers have the highest number of outstanding invoices. On average, they have three outstanding invoices, so I suppose I'm lucky: I have only one at the moment. The UK has a worse record for late payment for small businesses in general than elsewhere, according to research undertaken by MarketInvoice. For small businesses in general, over 60% of invoices in the UK in 2015 were paid late, compared with just under 46% for the USA and just over 40% for the EU.
The ACF survey also found that nearly 80% of the respondents said that chasing unpaid invoices was the most stressful part of their job. I can attest to this. It's stressful because it takes up time that you could be using to generate further income. This is especially the case for sole traders.
Key study findings:
• Photographers, writers and designers are the most likely to be paid late by clients
• 62% of freelancers have at least one overdue invoice at any given time of the year
• Average number of outstanding invoices rises to three in the third week of February
• 54% of freelancers say they have a budget to cover living costs in case of unpaid invoices
• 37% said they expect to be paid late for invoices raised before Christmas
• Larger organisations are worse for paying freelancers late
• Fashion industry and universities among worst for late payments
The worst offenders, according to the study, were organisations in the fashion industry, higher education sector and local authorities.
The study also found that large organisations are significantly more likely to keep freelancers waiting for payments.
According to the study, three quarters (75%) of freelancers say organisations with more than 200 employees were the worst culprits for late payment.
Matt Haycox, funding consultant with Access Commercial Finance, believes businesses should commit to paying freelancers on time.
“The fact that freelancers are actually budgeting to cover late payments is a disgrace.
“In many cases freelancers will have already paid for their own training and development and businesses benefit from access to that highly skilled worker without shouldering any of the development cost. Freelancers don’t get holiday or sick pay.....
“One of the biggest complaints uncovered in our study is the amount of time freelancers spend chasing large companies for overdue bills.
“Businesses of all sizes, but especially larger organisations with less nimble accounts processes, need to recognise the importance paying freelancers on time. Not doing so puts these workers at real risk of hardship and could even force some of them out of self-employment, depriving us all of their hard-earned skills and talent.”
Possibly useful links
If you live in the UK, you may find the following links helpful. Please note that I'm not responsible for how up-to-date or accurate these websites are, so please just use them as a starting point for your own research.