Freelance life isn’t all about flexible working hours and staying in your loungewear all day. As a freelancer, things can get pretty tough at times, so it’s important to know how to protect yourself and your business in case anything goes wrong. Freelancers don’t have the backing of an employer for support, so they need to be able to stand up for themselves.
In this blog post, we look at three of the most common challenges that freelancers encounter, share some tips on fending on them off, and what to do if problems do arise.
Managing late payments
Most freelancers starting out tend to think that drumming up work will be the biggest challenge they face. And yes, that’s not without its issues, but at the other end of the process are those customers who pay late.
Late payments can be a real problem for those working in the freelance sector to deal with. As a very small business, even the smallest wobble in your cash flow can be significant.
Recognising this, the government has implemented various courses of action to help. This includes the recent overhaul of the Prompt Payment Code (PPC) which requires companies to pay freelancers within 30 days. However, only a small number of companies are actually signed up to the PPC, so it’s crucial that you take steps to protect yourself.
Measures such as including payment terms on your invoice, and regular payment reminders before the due date can help avoid potential problems, but if you do find yourself facing late-paying clients, there are other options.
Stop work for that client
Stop carrying out any work for your customer until overdue invoices are paid.
Notify the client that you will add interest on top of overdue debts
You are allowed to apply 8% statutory interest to late payments, as well as the Bank of England base rate for B2B transactions. This will need to be added on via a separate invoice, in line with the following set rates:
- Debt of up to £999.99 – £40 interest
- Debt of up to £1,000-£9,999.99 – £70 interest
- Debt of £10,000+ – £100 interest
Enlist the help of a collection agency
These are also known as Recovery Specialists and are trained to support late payment negotiations for self-employed people, often with a no collection, no fee contract. On the subject of fees though, there will be one! Consider if the debt is worth the cost of collection.
Take the client to the small claims court
If a client’s debt is below £10,000 you can try and resolve the issue through the small claims court. Just remember that legal action can be costly before you make any decisions.
Issue an LBA
This stands for Letter Before Action. It’s sent to inform somebody of the action you plan to take. Whichever route(s) you take, all courses of action should be communicated clearly to your client.
Protecting your Intellectual Property
As a freelancer, you’re regularly sharing your portfolio with people – with prospective clients, with your social media audience, maybe even with your peers. When in talks with new clients or discussing new briefs or contracts, you’ll also be regularly sharing your ideas, pieces of test work or pitches for a job.
These are all necessary parts of the process but that means protecting your Intellectual Property – or IP – is crucial.
Whoever gets hold of your work – your IP – can essentially claim it as their own and leave you in the dust if you don’t put damage control measures in place. So, what can be done?
Non-disclosure Agreements (NDAs)
Non-Disclosure Agreements (NDA) are a great way to safeguard your ideas and your creativity. This can be a separate contract or form part of your standard working agreement. You ask your client to sign, and then they can’t disclose your ideas or use your creative assets without permission.
Copyright is another option you might consider as a freelancer in order to protect your IP, as this relates to assets of creative craftsmanship. Copyright determines who has the right to own and use creative assets such as film, music, and photography.
You can cover yourself with a copyright clause in your contract that explicitly outlines who owns the rights to any creative assets – but what about if this is violated?
Dealing with IP infringement as a freelancer
Huge companies can have whole teams whose job it is to spot the brand’s identity being used without permission, and to take appropriate action. When you work alone as a freelancer you might have fewer resources, but the process is still roughly similar.
The first thing you should do is contact the person using your IP illegitimately – this will help settle any honest mistakes. The best-case scenario is that the person did it without realising the error of their ways and it can be resolved right away.
Beyond that, and in instances where this violation has been carried out with ill intent, you seek specialist IP legal action.
Where IP is concerned, it’s particularly crucial to put protective measures in place, rather than just having to deal with damage once it has already occurred. Hopefully you’ll never need to navigate any IP infringements in your freelance career but if you do, you’ll need evidence of your creative process from the very beginning and documentation of any copyright agreements you had in place.
Legal action can be a costly endeavour though so be sure to consider it carefully (although it may be possible to claim tax relief on costs).
Dealing with plagiarism
Plagiarism is when somebody directly takes or copies your work and masquerades it as their own and sadly, it’s a problem that is rife in the freelance sector. For things like design, photography, web design and video you might be able to protect your work by using watermarks. However, for other freelance professions, such as copywriting, it’s not quite as easy to block.
If you find yourself in a situation where your work has been plagiarised, your options are pretty similar to if your IP was exploited. The first port of call is to contact the plagiarist and ask them to remove or stop using your work – hopefully that does the trick.
If not, you may wish to take the matter further with legal action but as we touched on above, this can be costly. It’s worth weighing up the pros and cons first. If somebody has plagiarised a low-traffic blog post from your website, for example, it might not be worth the expense but in other cases, you may deem it necessary.
When seeking out legal action, make sure to do your research first – don’t just go with the first firm you stumble across on Google. Look around, read reviews, and ask for recommendations because where legal matters are concerned – and their related costs – it’s important to find a reputable and reliable representative that you can trust.
Remember: prevention is better than cure, so taking measures now to bubble wrap your business is better than scrabbling around for a quick solution if you-know-what hits the fan.