Matthew Knight’s Post

As part of #NationalFinancialAwarenessDay we take a look into how late payments are affecting the freelance and small business market with tips for safeguarding your finances. Read more about late payments here: https://bit.ly/3M2RTA8

Useful guide for independent professionals setting out your legal rights regrading late payments - published by IPSE - the Association of Independent Professionals and the Self-Employed #waitwatchers #paydontdelay #smes #microbusiness #freelancers #cashflow

❓So how the flippin' heck do I get paid on time Mark? It's a question I hear a lot from freelancers/contractors/consultants! It's a good question and my strong recommendation, which might irritate you for being so obvious, is to get paid upfront... Get the money in before you do the work - that's the gold standard 👌 But if you can't - and I know there is pushback in lots of industries to this - then there are some things you can do to improve your situation and keep that cashflow moving. ✅ Vet your client before you do any work for them, to see if they have any financial red flags e.g. court judgments, bad credit history. ✅If possible, negotiate a substantial deposit up front and reduce credit terms to a period that's manageable for you. ✅Get the client to agree to your Ts and Cs (preferably with a clear signature) BEFORE you do any work. ✅Be crystal clear on the scope of work and the fees charged. Mismatched client expectations can be a big factor in non-payment. ✅Make sure your Ts and Cs include a right to claim interest for late payment. It should be high enough to incentivise paying on time, but not so high that it could be considered an unenforceable penalty. ✅Include in your Ts and Cs a right to suspend your work if you are not paid. This must be stated explicitly as it's not an automatic right. ✅Make sure your Ts and Cs include a right to recover legal costs for pursuing bad debts. For smaller debts (usually less than £10,000), legal costs may not be recoverable even if you win at court. ✅For bigger/riskier projects and clients, consider if you would benefit from trade credit insurance, invoice factoring, and/or letters of credit. ✅Send accurate and complete invoices at the right time and make it easy for your client to pay. Being sloppy on invoicing sends the wrong message. ✅Have a robust credit control process in place for monitoring payment dates and quickly follow up with the client for all missed payments. Hopefully this checklist helps and if you need some bespoke assistance with your payment processes and contract terms, drop me a line 📞 #freelancers #legalsupport #smesupport #gettingpaid

Getting clients to pay for your services in good time is a challenge for many entrepreneurs and businesses. And the challenge can harm any business if not dealt with proactively. One of the biggest responsibilities of business owners is managing cash flow. Without a thorough process to protect yourself, you could end up working hard for your customers/clients, piling up unpaid invoices, and sometimes getting ripped off. This is a nightmare scenario. But it’s more common than you might think. If you’re on the fence about accepting a client but need the income, here are a few things you can do to protect yourself: 1. Collect at least 50 percent of your project fee up front – before you begin the project. If you are able to collect 70% upfront then you are safe. 2. Schedule milestone payments throughout the duration of the project. 3. Consider working with them on a smaller (trial) project to make sure you can collect before moving on to bigger commitments. 4. If you’re able to do it, consider working only with established companies who have a good reputation for paying their freelancers and partners on time and in full. If you do run into a client who won’t pay – and you’ve already done the work – realize that you’re not alone. Businesses get burned at one time or another, but a little preparation up front can reduce your risk. See my 2021 guide to helping businesses get paid and recover unpaid invoices. #debtrecovery #invoicing #smallbusinessstrategy #businessadvice #startuptips #businesstips

> There are several types of business structures, each with its own advantages, legal implications, and tax considerations. > Let's just focus on Self Employment for now, is that okay 👍 👌 1) Ownership: Owned and operated by one individual. 2) Liability: Owner has unlimited personal liability for business debts and obligations. 3) Taxation: Business income is reported on the owner's personal tax return. 4) Advantages: Simple to set up, minimal paperwork, full control. 5) Disadvantages: Personal liability, harder to raise capital, limited life of the business. > Sole proprietorships are common among freelancers, consultants, and small business owners due to their ease of setup and operation. > Having an accountant can provide significant benefits for both individuals and businesses. > An accountant provides peace of mind, knowing your finances are in capable hands, reducing stress, and helping you achieve financial success. If you find this post valuable, share, comment and don't forget to follow me for more useful tips 🙂

When it comes to freelancing or running a service-based business, one question often arises: should you take a deposit before commencing work for a client? The answer is not one-size-fits-all; it requires a careful consideration of the pros and cons, an understanding of when it's appropriate, and a well-structured deposit agreement. This balancing act is essential for safeguarding your interests while building trust with your clients. The Pros: Financial Security: Deposits provide you with a degree of financial security. They ensure that you have some compensation for your time and resources in case a client cancels or doesn't pay the final invoice. Commitment from Clients: When clients invest financially upfront, they often become more committed to the project. This can lead to better cooperation, communication, and a higher likelihood of project success. Risk Mitigation: Taking a deposit helps you mitigate the risk of non-payment or project abandonment. It's a common practice in industries where upfront costs are substantial. The Cons: Trust Issues: Demanding a deposit can sometimes raise concerns for clients, especially if they're unfamiliar with your work or industry. It may create a perception that you don't trust them. Competitive Disadvantage: In industries where competitors don't require deposits, insisting on one can put you at a competitive disadvantage. Clients may choose the path of least financial commitment. Refund Hassles: Handling refunds for canceled projects can be administratively burdensome. It may require a clear refund policy and a system for returning deposits, which can be time-consuming. When is it Appropriate: Large Projects: For substantial projects that involve significant time, resources, or expenses upfront, taking a deposit is often necessary to protect your business. New or Unknown Clients: When working with new or unknown clients, taking a deposit can provide you with a level of assurance, especially if you've experienced payment issues in the past. Custom Work: If you're creating bespoke products or services tailored to a specific client, deposits can be used to cover initial design or development costs. In conclusion, taking deposits in your business can provide financial security and commitment from clients, but it must be approached thoughtfully. It's not always appropriate in every situation, and clear deposit agreements are essential. By striking this balance, you can protect your interests while fostering trust and successful client relationships. Remember, transparency and professionalism are key to navigating this practice successfully. #accountingpractice #accounts #businessaccounts

Freelancers and small business owners often have tight budgets. And staying on track means cutting out unnecessary expenses. But even the most well-run small businesses waste money from time to time. So how can you prevent this? Know how money gets wasted. Some common ways: 17. Buying too much inventory. 18. Failing to optimize for tax deductions. 19. Traveling too much for business. 20. Failing to optimize work processes. 21. Paying too much for legal or professional services. 22. Failing to manage cash flow effectively. 23. Not setting a clear budget. ⁠ You can find the full post on website: https://lnkd.in/gxrX62Fp ⁠ #agency #freelance #finance #consulting #smallbusiness

Big shout out to @invoiceninja for making invoicing a breeze! Highly recommend this program for all freelancers and small business owners. #InvoiceNinja #InvoicingMadeEasy #SmallBusinessSolutions Check out our article: https://lnkd.in/gkeHU9tz

Ariel Palitz once called Archie a 'compassionate payment platform' - a nod to the transparency and timely payments. I think about her framing a lot. It's the kind of framing that helps me stay motivated and grounded while running the race. (Devin Baptiste helps me on that front too). Rebecca Drabczyk at The Standard puts it beautifully - “If you are committed to having your vendors trust you more, then you should trust Archie. Not only will their payment solution save you time, but it will show your vendors that you have their best interests at heart.” But beyond this, here's what you should know as a business hiring a freelancer and the risks of not having a sound process in place: 💰 Not paying on time is prosecutable and clients cannot retaliate against a freelancer for pursuing payment. 💰 Businesses face double damages and attorneys fees in court, and repeat offenders can face penalties of up to $25,000 if they pay late. 💰 If a business fails to provide the correct 1099 form, they're subject to a minimum penalty of $630 per form or 10% of the income reported on the form... with no maximum (!!!) xoxo

Do you ever check that you are on track financially, or just wait for your accountant’s bill and tax demand? Some do, and they operate this way as it suits their purpose. For most it doesn’t follow that this is the best way forward. There is, according to every accountant, coach and NED I know, a need to know when and where money is moving to and from for the business. Similarly, do you know when client demand is going to peak, or dwindle? Every business has some kind of cycle, even if you work from 3 or 5 years contracts. Do you also know when new clients will join and when some will leave? Doing these things are key to know when you need to increase, and/or decrease, staffing levels, or support from freelancers. When you can, work out when you will take time out to work “on the business” and when you need to roll up your sleeves and be part of the engine room and work “in the business”. The fun part for me is no two businesses are ever the same. They have a different business ethos, and different risk appetites. These are essential things for me to know as without them my support is far less effective. While I have digested so many standards and approaches to managing various aspects of businesses, I never “quote from the playbook”. The benefits that I bring are mainly that everything is done to suit your needs. I may highlight many things for you to consider, but its always your decision that counts. The last thing I would comment on, should a presented option be refused, is the risk that may be encountered from doing nothing. It usually carries a greater risk than doing something. #business #smallbusiness #change #businesssupport #success #standards