You’ve finished your freelance work, hopefully done a good job and now you probably want to get paid.
There are loads of esports horror stories about freelance payments taking months or even years to get settled and there are absolutely no excuses for them (it’s not unique to esports by the way), but you can at least reduce some of that risk by making sure you follow some simple steps when requesting your payment and staying on the good side of your clients’ accountants.
Hopefully you’ve followed the previous steps in our earlier articles to make sure everything is in place for this stage, whether that’s ensuring you are set up as a supplier, obtaining any contracts that may be needed or purchase order numbers (an internal reference number used by businesses to pre-authorise a payment).
If anything has changed since agreeing the contract and invoicing, like any extra days added or additional expenses, make sure you iron these out with your contact before invoicing. Check if you need a new contract or PO. Some larger accounts teams will have automated processes that match invoice values and order values and if they have changed, your payment may get stuck in their systems, best to iron it all out beforehand. Again, this is not necessarily your problem as the contractor, but it can help speed things along if you ask the question.
Preparing Your Invoice
- If possible, just use a proper invoicing system. There’s plenty out there at pretty low monthly prices and they’re going to generate a compliant/standard invoice that is in the right format. It may cost you a few £ per month but once you have a flow of work coming in, it’s going to save you more than it costs in time and effort. Check out things like Sage Business Cloud, Quickbooks, Xero etc. Plus you’re then going to have decent records for your tax returns to make that time easier.
- If you are making your own invoice, you need to make sure it includes:
- Your Details – Name, company name, address (should be the registered address of the business if you’re a registered company), contact details, VAT number if you’re registered
- Recipient Details - Name, company name, address, contact details, VAT number if they’re registered
- Invoice Date – This is the date you send it, not the date you completed the project, don’t send an invoice in a week after this date and still expect it to be turned around in 30 days from the invoice date.
- Invoice Number – A unique number that you generate usually in sequence that can be referenced on your payments.
- Reference/PO – Any purchase order numbers or references that the supplier has asked you to include to match up with their accounts systems.
- Breakdown of the work completed with clear prices and quantities.
- Final total of the amount payable in the currency you agreed in your contract (don’t surprise the supplier by suddenly changing to a different currency when you invoice, they may not have a mechanism for foreign transactions, or it may incur expensive transfer fees).
- If you are VAT registered, you should clearly state the VAT % and amount of VAT being charged. If you are not VAT registered, then you should not charge or show VAT on your invoices (if you’re turning over more than £85k in the UK you need to register).
- YOUR PAYMENT DETAILS – Honestly, you’ve no idea how many people forget to do this. This will normally be your account name, bank account number and sort code (Or BIC/IBAN details for international transfers). When including your bank details, make them easy to copy and paste in to payment systems, don’t include any random symbols like / in your sort code, either 00-00-00 or 00 00 00. Some suppliers may be able to deal with PayPal, but larger businesses will not, so always include bank transfer details anyway.
- Do not ever put your 16 digit bank/credit card number on an invoice, it's near impossible to use that to pay you, but you open yourself up to all kinds of fraud.
- Agreed payment terms – Net 30 is common and reasonable, realistically you aren’t going to get terms much lower than this when dealing with large businesses, some will be higher, make sure you agreed this at the point of contract.
Once you’ve prepared that you should email the invoice to the correct accounts contact at your supplier, again you can try to find this out at the contract stage to save time later. Many suppliers will have a dedicated address or person to send this to, often worth CC’ing the person who booked you for the work too, they may have to authorise the invoice.
Send your invoice in an email as a PDF attachment. Don’t send it as a word document or spreadsheet as they can be edited but also by sending as a PDF you’re making it easier for the supplier’s accountants to upload in to their systems.
Make sure you send your invoice in within a reasonable timeframe after the work has completed too, larger organisations will have financial periods that they want to allocate the money to and if the work is close to a financial year end and your invoice is late you are likely to make yourself unpopular with the supplier’s accountants. A few days/weeks will probably be fine, but if you send something in 6 months late, expect to be grumbled at!
Then wait until your due date. Don’t be one of those people that chases every week before your invoice is due, you’ve agreed terms with your client so you should at least let that time pass before chasing or reminding. If you’re regularly chasing before that point, then you’re taking up more of the time of the accounts team who have to stop what they’re doing to reply back to you.
Of course, if it goes overdue, then by all means get in touch and ask for updates, but not before then!