FEU Training Blog Archives - Page 15 of 16 - BEAU | Broadcast, Entertainment, and Arts Unions

Getting paid (5)

Posted on 29 Feb 201229 Feb 2012

FEU Training Blog

Using the law

In theory, the law is on your side. In reality, the law sees you and the giant corporation you are freelancing for as two equal bodies. It does not recognise that the bigger organisation has more power and influence, can hire expensive lawyers and can bully you just with the threat of making sure you never work again.

Having said that, there are times when using the late payment laws can be very helpful.

Proper name

The full name for the late payment legislation, which you should make clear on the invoices you will use, is: the Late Payment of Commercial Debts (Interest) Act 1998 as amended and supplemented by the Late Payment of Commercial Debts Regulations 2002.

This means you can charge a fee for any invoice not paid on time, plus interest at eight percentage points above the Bank of England’s base rate. Interest rates are currently very low so the interest does not add up to much but the penalty charges are worth it.

For bills of less than £1000 you can charge £40. Between £1,000 and £9,999.99, you can charge £70 and for invoices of £10,000 or more you can charge £100. So even if you only invoice for £10, if it is paid late you entitled by law to a £40 compensation fee.

Do the Maths

Calculating the interest on top of the fee gets more complicated. First you need to know the current interest rate. This has been simplified and for the purposes of this legislation, only changes twice a year. The Bank of England rate on 31 December is used for the first six months of the year and the rate on 30 June is used for the next six months. The BofE rate has been 0.5% since 2009, making the amount you can charge 8.5%.

You take the amount of the debt (including VAT if you charge that) and multiply it by the interest rate (8.5% is 0.085) This gives you the amount in interest for a whole year. You divide that by 365, which gives you the daily rate. And then you multiply that by the number of days the invoice was paid late.

So, a £100 invoice paid ten days late is £100 X 0.085 = £8.50 ÷ 365 = 2.3p per day X 10 days = 23p. But add that to the £40 fee and the total you can claim is £40.23. There are many interest calculators online that you can use (see links below).

Template letter

All you need to do to claim is write or email setting out that you wish to claim, giving the invoice and payment details.

Here’s a draft you can copy and adapt:

I am claiming late payment fees and interest on the invoice detailed below under the Late Payment of Commercial Debts (Interest) Act 1998 as amended and supplemented by the Late Payment of Commercial Debts Regulations 2002.

Invoice number: XXX

Dated: XX/XX/XX

Amount: £XX

Invoice due date: XXX

Invoice paid date: XXX

Days late: XX

Interest rate: XX

Interest charged: XX

Fee: XX

Total amount due: £XX.

Please make payment immediately.

If you have several invoices you might be best to produce a table of them – but you can include as many as you like in a single demand.

The key here is that you can use this as a lever to get customers to pay on time. The law allows you to wait six years before claiming your late payment charges and interest but if you keep pointing out that paying you late is incurring these charges, it can put pressure on firms to speed up payment. And you can, at the end of six years, claims for the whole lot in one go.

This might be particularly relevant if you work for one organisation for several years that paid a few invoices late. Once you have ceased working for them, demand your late payment entitlement.

Links (new windows)

Getting paid (4)

Posted on 25 Feb 2012

FEU Training Blog

What to do when you don’t get paid on time

It happens to all of us. In fact, I bet we’ve all forgotten to pay someone for something, sometime, and needed a reminder. So always start out on the basis that it is an oversight – a mistake.

Be firm but be polite and cheerful. Ask if there was anything wrong with the invoice, or with the way it was sent. Ask if there is anything you can do to help invoices get paid faster next time.

But don’t be fobbed off, either with excuses or brazen refusals to pay on time. Make clear the payment time (credit period) is part of the contract. You have carried out your part of the contract and their part of that same contract is to pay on time.

The law

Explain that this is a legal requirement and not an optional extra. Remind them of the late payment legislation and that you are entitled to claim for bills paid late. Explain that late payment charges will end up costing them more and you want to help them avoid those extra charges. You want to work together.

In recent years I have had a rule of thumb to work with a client in this way for three payments. If the first is late we have a discussion about it, with me making any changes necessary to help speed up the process (billing at a certain time to coincide with payment runs or copying the invoice direct to an extra person to speed approvals). I expect them to make changes in return.

They may not get it right still the second time, but I do expect to see an improvement. I will have been in regular contact to check the progress of the payment. These regular calls and emails also give you an idea about whether the company is taking the matter seriously or not.

Usually they get it right by the third time round. If not, you need to make a decision about what you do next.

New or old customers

Most payment problems arise with new customers and then settle down. Every now and then a regular prompt payer will miss a payment through a lost invoice or other error (which would have been spotted had you chased up the invoice after you sent it). Most of the time these are nothing to worry about and can be resolved with a friendly chat.

But late payment can be a warning sign of longer-term and more serious problems. Check the status of each customer before supplying further material. Are they in trouble? Have they their own cashflow problems? Are they solvent?

Strict credit advice would be not to continue to supply if the account is overdue. In reality most of us will supply while a problem is sorted out. But don’t let the amount owed to you build up.

Special terms

You can set special terms (7 or 14 days) if the customer has paid late before. And if the customer fails to meet the special terms, revert to pro-forma invoicing (invoicing and getting paid in advance) or demanding cash on delivery.

Ultimately you may have to cease supplying altogether. That’s a painful decision to make for any freelance, but less painful than working your guts out only for the company to go bust without paying you.

Link (new windows)

Getting paid (3)

Posted on 22 Feb 2012

FEU Training Blog

Fitting in with other people's system

Company payment systems are a minefield. Each will have its own foibles and you need to get your head round each and every one of them to get paid promptly.

People can be important. Within each organisation there is someone with the power to make things work efficiently – you need to identify that person and work with them to ensure you get paid on time. There is sometimes so substitute for charm and good manners in the battle to get paid. There may be times when you will need to be firm with them if there have been problems – having been charming and polite before then will emphasise your seriousness.

For some firms you will first need to become an approved supplier and have filled in forms and provided your bank details for scrutiny. Don’t fear this. It may indicate a high level of efficiency and identify a person you can speak to in order to check their invoicing and payment system (but not necessarily).

You need to find out:

Where to invoice
Who to invoice
Details to include: a description or date of work done, a purchase order number, a reference)
In what format they accept invoices (by post, email, as a PDF or Word document)
By when they need invoices to be included in the next, or relevant, payment run (some companies only make payments on fixed dates each month)
Who they need to approve or sign-off your invoices (you may need to chase them too or get them an invoice before they leave for their holiday)
How payment will be made (cheque, cash, bank transfer)

Always invoice on time, accurately and to the correct person(s) responsible in the format they require, using purchase order numbers or any other references necessary.

Chase up within a few days to ensure the invoice has been received, is in the correct format and is being processed. If you know it needs to be approved by a named individual chase them politely too.

Chase up the invoice a few days ahead of the due date or a few days ahead of the company’s payment run to make sure your payment is being included. Be firm but polite in your insistence that you be paid on time.

Links (new windows)

Getting paid (2)

Posted on 19 Feb 201219 Feb 2012

FEU Training Blog

Clarity is key

The scramble to snatch up scraps of work can sometimes cloud the details of exactly how much a job is worth and when we are going to get paid. This is almost always a mistake.

Negotiate and agree payment terms at the point of sale, not afterwards. Afterwards is too late. Either a genuine misunderstanding can come to light or someone might try to rip you off by offering less than initially agreed. If you have already done the work, it may be too late.

You don’t want to be in a situation where your client is saying: “I thought that was included in the price,” when you thought it would be for an extra fee.

Whatever deal you agree, make sure you put it in writing – an email – and that you keep a copy. Whatever your terms – and they may vary from job to job or from one client to another - make your terms of trade clear and unambiguous. Set out:

The details of the job, including any dates, quantities or other conditions you have accepted and what is excluded
Payment amount (s)
Limitations – any restrictions you have put on them using your work, such as copyright, ownership, repeat fees,
Date of expected invoicing
Credit terms (when you expect to get paid), including stating your intention to use the late payment legislation.

Once you have done the work or supplied the goods or service, get a confirmation that what you have supplied has been received and check that the customer is satisfied with the quality and number delivered. Errors or faults are often used as an excuse for delaying or reducing payment.

And get that invoice in sharpish.

Getting paid (1)

Posted on 15 Feb 201219 Feb 2012

FEU Training Blog

Be careful about who you work for

Check out all new clients before you start working for them – avoid the pitfalls of working but not getting paid.

What could be better than getting a new client, you think. Maybe someone rang out of the blue, or emailed, or even called. They saw your name, liked a piece of work or yours, or you were recommended by a colleague – they can even tell you their colleague’s name and you are proud of the connection.

You’re chuffed, flattered, grateful. You could do with a bit more work right now, or you were wondering what you’d do when the current project comes to end. Here’s the answer and you haven’t even had to go looking for it.

But wait. It might be great news, but it might be more trouble than it’s worth. If this is a fly-by-night outfit on one on the verge of bankruptcy, you could be about to commit to working for free with no prospect of ever getting paid.

Credit checks?

Big corporates do credit checks and due diligence before accepting clients. For most of us freelance professionals buying credit reports and seeking references is not realistic. But we can - and should - check out customers before we sign up to work for them. If they don’t pay, or go bust on us, we will have lost out.

Google is your friend. A few minutes should find out a little about this potential new customer. What are people saying about them? Are there any complaints? Check forums, chat rooms, any websites criticising them for not paying their bills or trying to cut down agreed fees after accepting similar work?

Personal contacts are even better – do you know anyone who has worked for them? What were they like to work for, did they pay well and did they pay promptly? Are people still happy to work for them? One reason organisations are often looking for new talent is because they have alienated their old favourites who will not longer work for them – if not, warning bells should sound. Check with your union – have they had to help members squeeze money out of them?

Pay close attention to quickly growing companies or companies that have been, or are being, taken over.

Sooner, rather than later

Do all this before agreeing to work for them – afterwards will be too late. A sensible freelance will also monitor existing customers and review them twice a year. You need to spot if a client is getting into difficulties and adapt accordingly, perhaps billing smaller amounts more often so that, if they do stop paying, you’re left being owed less. Better still, cease working for them before they get into difficulties.

Grade your customers by risk levels and set credit limits and terms for each customer. You might normally expect to be paid 30-days after sending the bill but not every customer has to be treated the same. You might offer to bill monthly instead of weekly, for example, but only if you can be paid within a week. That might save both of you the hassle of dealing with lots of invoices.

There may also be times when you have to ask for payment up front – before you start. This might be part payment in advance and the rest when you finish the job, or, if you are worried about the client, you might ask for full payment in advance. You might even ask clients to apply for credit terms – a child entertainer or magician, for example, might do many jobs based on payment with the booking but have a corporate client that provides regular work who pays on invoice after each performance.

It’s a case of horses for courses.

‘You gotta have a goal’ (2)

Posted on 14 Feb 201215 Feb 2012

FEU Training Blog

What's stopping you?

I’m a great believer in self-help books as a way to help motivate me to achieve my goals and learn from the highs and lows of others. ‘Don’t Sweat the Small Stuff’ (Richard Carlson); ‘Wanting Everything’ (Dorothy Rowe); ‘The Road Less Travelled By’ (M. Scott Peck) and ‘Change Your Life in Seven Days’ (Paul McKenna) are just a tiny scattering of the plethora of ‘make me happier and better (hopefully without trying very hard)’ literature that lines my shelves.

However, I am aware that, sometimes I like reading about change much more than doing anything about it, especially when change means doing a few things that I’m not that keen on – pleasant sensation seeker, quick fix lover that I am.

Indeed, I’ve learnt from experience that the thought – or at least too much thought – certainly doesn’t count when it comes to getting what you want. I’ve actually been guilty of procrastinating so much that I’ve forgotten what my goal was in the first place.

Eventually, I recognised that sticking my head in the sand where some goals were concerned was causing constant underlying frustration as well as a lack of focus – when you’re thinking about what you should be doing (and not doing it), it’s likely that it’s diverting you from doing all the satisfying things that you can – what a waste of time and energy.

A simple yet good example of this that I have never forgotten is a domestic one. There was a loose carpet on my stairs - for two years. Practically every day I thought something along the lines of ‘I must get that carpet fixed.” Hardly a major chore in retrospect but for two years I had the same thought without actually doing anything about it.

This thought would often catalyse a spiral of thoughts that would put me in a thoroughly bad mood such as: “Actually, the whole carpet needs to be replaced…and, the whole house needs to be painted…no gutted and renovated…and, it was a big mistake to buy this house in the first place because it’s going to cost a fortune to do it the way that I want and I’ll never get my investment back anyway.”

Eventually (through weariness rather than positivity), I went to B & Q, bought some glue and stuck the carpet down. It was easy, cheap and took me 10 minutes.

From this experience I realised two important things:

1. Don’t procrastinate, act – this may mean doing something that you don’t want to do or think you can’t do to get what you ultimately want. You might have to change your attitude a bit and do some research too – this can be as simple as reading the back of a glue tube!

2. Break your goals down into manageable steps. I realised the loose carpet wasn’t the underlying issue. What was really making me procrastinate was what I considered to be the enormous task of completely making over my house.

As it happened, taking the first small ‘carpet’ step opened my mind and motivated me to move forward. I changed my attitude: previously I had been thinking that unless I could do all that I wanted to do to my house in one fell swoop it wasn’t worth bothering about. This way of thinking suddenly seemed ridiculous. So, I made a plan (room by room), found out exactly what it would cost (it was a fair bit but not as expensive as I’d originally thought) and took it from there. In the first two years, I stuck down a piece of carpet. In the second two years I completed the make over!

On achievement of what I considered to be a major goal, I resisted the temptation to mentally kick myself into oblivion for not doing it earlier. Another lesson I’ve learnt – there are times to be hard on yourself and times to learn from your life experiences and give yourself a well-deserved pat on the pack.

Now, I’m never going to love DIY and will always ask or pay others for help in this area (yet another lesson – you don’t have to do everything yourself – especially if opportunity cost wise you can be more productive and satisfied elsewhere). But, now, when I’m faced with a challenge – easy or very difficult – I think of that carpet and apply the same principles. It works for me – at least enough of the time to get more out of life whether it’s professional or social. Admittedly, reading and thinking about acting is still my not so guilty pleasure.

Taking action

For all you procrastinators out there, a very successful friend recommended a self-help book to me, which he swears by – ‘Eat the Frog’ (Brian Tracy). It looks at getting more things done in the limited time you have. The central idea of the book is that you have to find out that one task that you need to do that will make the most difference (not the task you feel like doing) and take urgent steps immediately to do it. Ten of Tracy’s recommendations follow:

1. Write down your goals

2. Plan every day in advance

3. The most important tasks and priorities are those with most serious consequences. Focus on them.

4. Practice the ABCDE method: prioritise task from A (most important) to E.

5. Focus on key results: identify those results that you absolutely have to get to do your job well then work and spend most of your time on these.

6. Obey the law of forced efficiency: there is never enough time to do everything but there is always enough time to do the most important things. What are they?

7. Do your homework. The more knowledgeable and skilled you become at your key tasks, the faster you start them and the sooner you get them done.

8. Motivate yourself into action. Focus on the solution not the problem.

9. Put the pressure on yourself. Imagine that you have to leave town for a month and work as if you had to get all your major tasks done before you left.

10. Do the most difficult task first – the one task that can make the greatest contribution to yourself and your work. Resolve to stick at it until it’s complete.

‘You gotta have a goal’ (1)

Posted on 31 Jan 201215 Feb 2012

FEU Training Blog

Goal setting

The New Year is traditionally a time to make resolutions and set new life goals.

Personally, I leave my ‘New Year’ review until spring as January and February are months where ‘holding on’ seems to be a major achievement. Whether it’s a post-Christmas downer, the start of another new year in which, no matter how hard I try to resist, I end up analysing all that I HAVEN’T done or the seemingly endless darkness that, in my case, definitely brings on S.A.D, even if I’m on a positive roll, I always find these months tricky. At least I know myself.

However, if you work freelance, whatever the time of year, it is sensible to undertake regular progress reviews to ensure focus (on productive short- and long-term career pursuits) and to avoid drifting or wasting time on activities that sap your energy and lead nowhere.

As freelances, the onus is on us to set our career direction and evaluate if we’re achieving what we want. This is why it’s worth investing time on devising and planning your goals.

To increase your chances of achieving your goals, using the S.M.A.R.T principle will help. Make your goals:

Specific

Clearly define each of your goals so that you have specific targets to aim for. This sounds obvious but how many times have you vaguely thought you’d like to do something in your life but never got around to it? “I want to change” is not a goal – think about exactly what you want to achieve and what actions this will take.

Measurable

Quantifying your goal ensures that you can assess your achievement levels as you go along and know when you’ve achieved that goal. For example, I want to be rich is too vague while I want to earn £50,000 by the end of 2012 can be measured.

Achievable

Goals need to be within your reach so that you are motivated enough to commit to achieving them while being challenging enough to change your life in the way that you foresee.

Realistic

While dreams can come true and you should never be discouraged from aiming high, it’s important to be realistic in both what you’re aiming for and the resources you have to achieve this.

Self-belief, confidence and persistence are all marks of successful people but so is the ability to recognise when you’re aiming for the wrong goal and to re-assess and change direction when necessary. You need to be honest with yourself when setting your goals.

Timely

Does the same goal keep appearing on your New Year’s resolution list? If so, setting deadlines is a great way to get and stay motivated.

If you don’t achieve your goal by the set deadline, you can either extend it or re-assess the situation asking yourself if you really want to achieve this goal or is it just a pipe dream that’s diverting your attention from something that you could really achieve.

Being pro-active and taking control of what you can is motivating in itself. It also keeps you focused on what you can do rather than what you can’t which helps build positive momentum.

Remember, being motivated to achieve your goals is a consistent effort in which you will be continually evaluating and adapting what you are doing and sometimes what you want to achieve.

Business Link adds two new services to help your business

Posted on 29 Nov 2011

FEU Training Blog

Business Link the government's resource for business has launched new services and tools aimed at providing easy to use, tailored information to help businesses start-up, improve and grow their business.

The sites will host a variety of interactive tools to help businesses in the UK but first you need to chose the service that is right for you. There's a Starting Up section and for those already running their own business, there's Looking to improve and grow?

Here you’ll find videos, tools and case studies to help take your business forward, helping you to find government support and information about business events. You can even share useful tips with other businesses.

Following on from our recent workshop Money Matters held in Manchester on 17 November and upcoming workshop in London on 1 December, you can go to the Improve Your Cash Flow page where there is a video and links to advice:

Carry out a cashflow forecast

Identify cashflow problems

Find ways to improve your cashflow.

Funky Finance November

Posted on 1 Nov 20111 Nov 2011

FEU Training Blog

It may not be the end of the tax year quite yet but many freelances have just submitted their tax returns for HMRC to calculate tax owed before the 31 October cut off date. With this in mind, FEU Training will be rolling out two, one-day workshops Money Matters in Manchester on 17 November and on 1 December in London. This month's Hot Topic is finance. Yes, money, money, money. We all need to make it, save it and get it to work for us. After all, if we don't who will?

Following on from last month's Social Media October, we thought it would be helpful to point all you creatives to the growing number of people using crowdfunding platforms to finance creative projects. Whether you want to put on a play, make a film, record an album or exhibit some work, there are now some UK-based platforms. I recently wrote a feature about this from which I have taken a few snippets.

“We really accept all kinds of creative projects and try to be as inclusive as possible” says Sponsume founder Gregory Vincent. “That’s kind of the idea of crowdfunding; helping to support projects that are slightly out of the mainstream opinion find a niche that may be able to support them. It’s very important to the arts.” Projects are “lightly vetted” once they have been submitted to make sure they are “sound” while ”the real vetting is done by the public, which I’ve found to be very efficient”, says Vincent.

The first crowdfunding platforms were established a couple of years ago in the US with sites such as Kickstarter and Indigogo. In the last six months, a number of crowdfunding platforms with a creative and arts focus have sprung up in the UK and Europe including Sponsume, which was one of the first websites to go online in the UK last August, wefund and wedidthis. While Sponsume caters for creative and entrepreneurial projects, wefund considers all creative projects and wedidthis, which launched early this year, focuses solely on the arts.

Continue reading "Funky Finance November"