Welcome to Dear Kier - your credit control agony aunt. Each week, I'm dedicating time to help you solve your payment woes - whether you're a credit controller, small business owner, or even an accountant or bookkeeper. The questions I receive, along with my best advice, will be published below.
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David vs. Goliath
Submitted 30 Nov 2018 by Anonymous
I’m a freelance copywriter that has a reasonably wide portfolio of clients. My smaller clients are fine but whenever I’m dealing with large corporates retrieving payment is always a headache. They just pay whenever they want.
Do you have any advice for dealing with larger companies like that?
Legal notice: As a representative of Chaser I provide this advice on the understanding that you will consider the consequences of your chosen actions. Neither Chaser nor any Chaser employee will be liable on any basis for the consequences of your use of it.
Great question! Thanks so much for submitting, this is something I've been asked a lot. I myself have been a freelancer and know all about that David vs. Goliath struggle.
Firstly I would check to see if you signed any kind of agreement on registering as a supplier. It’s quite common for the procurement teams of larger companies to make all suppliers adhere to their own supplier terms, and nestled in amongst all the legal jargon is often a line about payment terms. It’s quite common for them to pay on 60 or more days, as for them that’s 2 months worth of interest accruing in their account.
If you’re sure that you’ve not signed anything like that, in theory, these businesses should adhere to the same rules as any other. Your biggest challenge is dealing with the bureaucracy that comes with these firms, and my advice would be to be firm and persistent. Send initial emails so that you have physical proof of your chasing (or use Chaser to store them), but then favour phone calls. Call the main switchboard and ask for the Accounts Payable department. When you eventually get through it’s likely that they’ll deal with you in scripted responses so be sure to get them to answer:
- “When are your payment runs?”, and
- “Do you need a purchase order?”
When you eventually get a promised payment date from them, and it’s not within your payment terms, kindly remind them that you’ll need to receive payment by X date or statutory interest will be added. I've included a couple1 of resources2 below for more info on this.
In short, large companies will try to slow the process by making you jump through hoops. Make sure you’re leading the conversation - polite persistence pays after all - but in some cases you may just need to be a little more firm.
One final thing to note is that some freelancers are worried that being too pushy collecting payment will jeopardise their future with a large customer. Whilst this does need to be considered, I would add that the size of these companies often means that something is going to have to go pretty south before it works its way back up the food chain. There’s generally not too much cause for concern.
I hope that helps! Good luck and let me know how you get on.
All the best
Gov.uk service to check large businesses payment history: https://www.gov.uk/check-when-businesses-pay-invoices ↩
More info on the application of statutory interest: https://www.gov.uk/late-commercial-payments-interest-debt-recovery ↩
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