Welcome to five minute magic from Creativity For Sale Podcast. A quick fire episode, sharing tips and tricks from the pages of the book of the same title. 

Every week I'll be sharing one or two ideas that can give you. And actionable take away for your creative career, your business, or just the food for thought for the weekend ahead. These are taken from the audio book, and you can find the full version below. ~

Daring Creativity. Podcast with Radim Malinic

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[00:00:00] Today's episode is the last one of three on the topic of money, and it's a very much of a finance admin episode. It's not very juicy, but hopefully quite practical. [00:00:10] If you often struggle to get paid for your work, then I should have you covered with this one. Let me share some tips on setting clear payment terms, on navigating the murky waters of late payments, [00:00:20] we'll touch on the power of contracts, the importance of insurance, and what to do when a client goes missing with your invoice money.

This episode is full of practical tips on how you can keep [00:00:30] your cash flow healthy and your stress levels low.

 How to get paid.

Now for some [00:00:40] quick tips on getting paid, because payment can turn into a nightmare. Please note that you can download email template scripts for some of these actions via the bonus [00:00:50] content link. Be clear with your payment terms. Usually, invoices are paid within 30 days of the [00:01:00] invoice date as standard, though some companies set their own terms to pay their suppliers later, such as 45 days or even up to 60 days.[00:01:10] 

This is often clearly stated in the contract. State your terms on your contract. Your clients might be a little confused if you [00:01:20] start chasing your payment within your own set payment terms that weren't mentioned in negotiations. It's easy to be keen to get paid within a much [00:01:30] shorter amount of time, but it needs to be flagged up.

Otherwise, it looks very awkward. Don't send your invoices too early. [00:01:40] You've finished the work and supplied the files. Before the client can even approve the delivery, An invoice for the work slams into their inbox. It makes you [00:01:50] look efficient, sure, but it can also be in bad taste. Get the work approved, and then invoice.

But a regular client won't mind an [00:02:00] early invoice. There's an exception here. With clients that you know and have a proven track record with, You can sometimes invoice early. For [00:02:10] example, if you know that the work will take a month to create and the same time to get the invoice paid, you can issue the invoice at the beginning of the project.

Just [00:02:20] check with them first. Half up front, the rest on completion. This is a common practice across many industries. and can often work in [00:02:30] your favour. Some clients want to secure creative services by making a part payment, often half of the project fee upfront before the work has [00:02:40] begun. The second half is due either on supply of the work or within 30 days of that.

Either way, the contract should state [00:02:50] when the final amount is payable. Size doesn't always add up. Smaller client projects tend to be easy to get started, [00:03:00] but often take longer to get paid. Bigger work can take endless days and weeks to start, but these payments can often be credited next [00:03:10] day. It can also feel like a second job to keep track of payments, contacts and outstanding balances.

But with thoughtful communication, [00:03:20] it's not too much drama.

You also need to make sure you're legally covered for any inevitable challenges. [00:03:30] The following documents and policies can help you hope for the best, prepare for the worst, as the saying goes. Statement of Work, [00:03:40] SOW. This document provides a list of project requirements. It defines the scope of work with a list of the deliverables and estimated [00:03:50] timelines.

where the work takes place, and any other information that provides clarity for both parties. Usually, the client creates this, [00:04:00] but make sure it's in place. Contract. This two way document incorporates the statement of work. With clear conditions [00:04:10] on the project cost, how the work is agreed and delivered, and more.

Some creatives won't get up in the morning until a contract is signed. Then [00:04:20] some creatives, like me, don't have a contract for the first 15 years of trading. Ultimately, I learned that especially for higher ticket projects, [00:04:30] contracts make all the difference. As clients stop having silly ideas about delayed payments.

The client or the freelancer might have their [00:04:40] own contract and whoever's you choose, make sure you're both happy with it. Business insurance. Again, some freelancers [00:04:50] never bother to get insured, while others have insurance from day one. Insurance is one of those things that you don't think you need until you need it.[00:05:00] 

Business losses if something goes wrong can be huge, so for the sake of a few hundred quid, get your insurance in place and save the heartache [00:05:10] later if the worst happens. There are plenty of companies and brokers who can advise on what types you need, from public liability to professional [00:05:20] indemnity. For more information visit www.

businessloss. co. uk If you make a mistake, deliver a project late, or deliver it with such inferior quality that [00:05:30] it negatively affects the client's trading, they might consider starting legal action against you to recover the loss of trading revenue. [00:05:40] This could feel like the end of the world, unless you've got this type of insurance.

It gets you out of a hole. How to chase non [00:05:50] payments. Even with the most robust fail safes in place, sometimes a client won't pay on time. [00:06:00] These circumstances sometimes come about when a verbal agreement rather than a written contract has been made, like when the project's communication moves faster [00:06:10] than the admin side of things.

The majority of non payments are due to simple reasons and are rarely malicious or intentional. [00:06:20] And unless you're unlikely dealing with a hustler who ghosted you, there's every chance that you'll eventually get paid. So, here are some tips [00:06:30] on late payment. Late payment insurance. As the name suggests, you can purchase insurance that covers you when your [00:06:40] invoice funds aren't forthcoming.

But this insurance can be misleading, as there's no magic pot of money that will provide you with full payment if your client [00:06:50] doesn't pay, or that your insurer will go after your debtor. Instead, it often provides legal services that advise you how to pursue the [00:07:00] money owed. Pursuing Debt When a payment is outstanding, The longer it takes for the non paid to respond with a constructive response, [00:07:10] the more likely the non paid one is to feel resentful and annoyed.

Communication is often the key to resolving this situation peacefully. [00:07:20] If you don't hear back from the debtor, Send a few neutrally toned email reminders. Some small companies even set up a [00:07:30] fictional character, an email address, to make it look to debtors like they've got an accounts receivable department.

And it turns out this works really well. [00:07:40] And as mentioned earlier, always ask for a reply in an email. This time to get the status update and payment date. [00:07:50] How to escalate. If your invoice is unpaid beyond 60 days, you can up the tone of the language and stipulate what might happen [00:08:00] in the case of non payment.

At this stage, the suggestion of getting a debt collection agency involved can produce almost any [00:08:10] Bigger companies don't want legal action against them. You can find email scripts in the bonus content section. When that doesn't work, [00:08:20] if they still don't pay, the next step is to appoint a debt collection agency to act on your behalf.

If the issue gets this [00:08:30] far, it's best to transfer the work over to the agent and let them do their thing. Which does not mean kicking down someone's door or threatening them. [00:08:40] However, these professionals work on commission and they make sure they get the job done. They establish contact with the debtor and ensure there's [00:08:50] no dispute over the work delivery or costs.

Then, they negotiate a favourable outcome. which might be a staggered payment plan or full [00:09:00] sum received. Just make sure you understand the terms and conditions of the recovery agent, as you don't want any hidden fees to surprise you at any [00:09:10] point. Legal action and costs. A minority of debtors still may not pay what they owe.

Even if they agree to [00:09:20] installments or full payment, debt recovery agents can help you escalate the matter further, i. e. pursuing legal action in court. [00:09:30] At this stage, there are upfront costs for the legal paperwork and court fees, which could make an unpaid invoice start to feel like a burden, especially as [00:09:40] you have to part with further funds just to get paid for the work you've already done.

To add further insult to injury, even a court judgement in [00:09:50] your favour doesn't guarantee the debtor will pay. And the next level of escalation is paying a bailiff to knock on their door and seize their [00:10:00] assets to the value of the total sum. As you can imagine, this is messy and complicated. Something best avoided.

And with that, [00:10:10] let's get back to talking about what I prefer to talk about. Creativity. All you need is the plan, the roadmap, and the [00:10:20] courage to press on to your destination. Earl Nightingale.