For those who work as contractors, there are a unique set of challenges to be faced. While there are huge benefits to working for yourself, there are also issues that you would be unlikely to face if you were working for a company. One of these issues is getting paid on time for the work you carry out.
Feast and Famine
It is common for freelancers and contractors to experience ‘feast and famine’ in regard to their work and their finances. While ‘feast’ periods can be particularly rewarding and motivating, it is important to be prepared for the challenge of ‘famine’. You may find that these periods happen at the same time every year, so if you know that December is going to be a tough month, it may pay off to financially prepare for this period.
Payment Terms
Before you start working with a client, it is important to ensure that all parties are clear on the payment terms. Providing written versions of all agreements means that there can be no misunderstandings about how and when you expect payment. You should be sure that you are happy with the terms from your clients and thoroughly read through all conditions and clauses included in the payment specifications If you’re not sure about how much you should be requesting for payment, you can use our handy pay calculator as a guide.
Chasing Payment
Having to chase a client for payment can be an uncomfortable and frustrating experience. We can make it a little easier for contractors through our ICS Accounting and FreeAgent services which allow you to set up invoices and send out automatic reminders to clients who have not yet paid. You can watch a video about this service below.
If you have to continue to chase the client for payment, it is important to be honest and upfront. This may help clients to take the matter seriously and avoids any confusion.
Reducing the Risk
As a contractor, you will encounter clients and potential clients who you feel may present a risk of non-payment. You can take certain measures to reduce the risk such as requesting deposits or upfront payment. However, there is always the option to turn down work if you feel that there is too great a likelihood that you won’t be paid for the work you do.
It may be advisable to request that invoices are settled within seven days, or an appropriate time frame related to your industry, so you are able to stop work should the payments not be made.
We understand that there are many challenges that you will face as a contractor, and at ICS, we’re dedicated to alleviating some of the pressure by helping you to face these challenges. Whether you need a system that will enable you to quickly invoice clients or you need help with financially planning for your pension, we can offer our expert advice. Get in touch with a member of our team by calling 0800 195 3750 or by emailing info@icsuk.com and we will be more than happy to advise you further.
