UK freelancers are increasingly struggling with late invoice payments, with around half admitting they have considered quitting life as a freelancer because of worries over continued late payment, and 46 per cent stressing about having enough cash to live on.
The study from Ormsby Street also reveals that one in ten freelancers have faced difficulties paying their mortgage or rent because of late invoice payment, and many have turned to family (37 per cent) or payday loans companies (36 per cent) to cover a shortfall brought about by late payment.
While a fortunate 19 per cent of respondents say most of their invoices are always paid on time, a freelancer’s invoices are paid on average 18 and a half days after their due date.
Some 79 per cent of freelancers say that cash flow is the number one concern for their business.
Martin Campbell, managing director of Ormsby Street says, ‘Every freelancer knows that late invoice payment is one of the biggest frustrations, impacting cash flow and causing much stress, from paying the mortgage to having enough money to live on.
‘For a freelancer to be owed more than £5,000 is clearly unacceptable and threatens the emerging freelance economy in the UK, which brings flexibility and work-life balance to so many.’
The Office for National Statistics revealed in 2015 that 4.55 million Britons are now their own boss and research by the Association of Independent Professionals and the Self-Employed (IPSE) finds that three in five businesses agree that it would be difficult to operate without hiring freelancers.
The study of 1,002 freelancers and sole-traders reveals that 40 per cent of respondents have taken out a County Court Judgement (CCJ) in the last year to chase a bad debt, and more than half say that late invoice payment is getting worse not better.
More than half (57 per cent) of respondents say they worry that if they chase for payment that client might not use their services again, while two-thirds say they feel uncomfortable and awkward chasing clients for late payment.
Campbell adds, ‘Why should a freelancer waste their own billable hours chasing payment for work that has been successfully completed and is already due for payment?’
‘If customers are not willing to pay within the agreed terms then it’s time for freelancers to become more informed over whom they work with, and either ask for payment upfront or even choose to not work with company.’