The Freelancers' Union recently released a report regarding the issue many freelancers encounter. This common issue is that of unpaid invoices. Unfortunately, the cost of this nonpayment is much higher than the actual amount due. And even more unfortunate, is the idea that it can easily be avoided. This ever-present problem in the freelance world can be remedied by using billing companies such as ReliaBills to help manage your accounts payables.
The Facts of the Study
The Freelancers' Union surveyed over 5,000 freelancers in 2014 to determine the percentage of nonpayment and the overall effect such nonpayment issues have on the freelancer community. According to the study, 50% of freelancers experienced nonpayment at least once in their career. Furthermore, the average total loss for this nonpayment averaged approximately $6,000 per year, which amounts to about 13% of the average freelancer's income. What’s more unfortunate is that the employment and labor laws give these freelancers little recourse short of pricey and time-consuming litigation. The study also found that 71% of freelancers experience difficulty in collecting payment for invoices, which can be quite costly as time progresses.
Changing the Trend
As with many small companies, nonpayment is extremely costly for freelancers, considering their income is solely based on the payment of the invoices. They are the sole proprietors, depending on only the work they, themselves, can produce. Therefore, nonpayment actually costs thousands in bank charges, missed bill payments, collection costs, and other issues that arise as the result of poor client payments. While it may cost more than you want, hiring a firm that will help make sure you get paid, is likely a worthwhile and much-needed investment for any freelance business.
ReliaBills is one firm that is well worth its investment of time. By creating professional invoices and tracking them, sending updates, and updating invoices with interest for nonpayment, ReliaBills creates a streamlined process for your accounts receivables.
Fact: the easier you make it to pay, the more likely you are to get paid. Many freelances do not have access to credit card processing and may only accept check, cash, or PayPal. As a result, it is often less convenient to pay a freelancer's bill than other bills that a company receives. ReliaBills come with a fully integrated merchant account that allows a client to make a payment on an invoice at any time, from any place. They even handle the credit card processing of your company. As a freelancer, this allows you the ability to appear as a larger organization while still maintaining the integrity of your own work.
Sometimes invoices simply slip through the cracks and reminders need to be sent. Sometime customers are forgetting to make payment and the invoice simply slips through their accounts payables system. Because freelancers are working independently, they often forget or do not have time to conduct the proper follow-up with those customers. Therefore, it’s best for these tasks to be left for the professionals. ReliaBills sets up automated emails and reminders to contact clients and help get bills paid. Using a company like ReliaBills will drastically reduce nonpayment for freelancers and help make freelancing profitable for you again.