Late payments threaten to derail the freelance industry

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% stressing about having enough cash to live on.

freelancermainimage

Our latest research here at 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%) or even payday loans companies (36%) to cover a shortfall brought about by late payment.

While a fortunate 19% 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. At any one time, a freelancer in the UK is owed on average £5,431.03 in late payments and 79% of freelancers say that cash-flow is the number one concern for their business.

“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,” said Martin Campbell, Managing Director, Ormsby Street. “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) found three in five businesses agree that it would be difficult to operate without hiring freelancers. The Ormsby Street survey of 1,002 freelancers and sole-traders, revealed that 40% 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.

It remains a problem for many freelancers when it comes to chasing clients over late payment, partly because they do not have the time to spare, but also because of fears this might impact future work with that company.  57% 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.

“Why should a freelancer waste their own billable hours chasing payment for work that has been successfully completed and is already due for payment,” continued Martin Campbell. “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.”

Special Freelancer rate!

With 49% of freelancers having had to turn down a contract because of concerns over a client’s ability / willingness to pay on time, we’re offering access to CreditHQ for the special freelancer rate of £12.50 for the standard subscription; allowing freelancers to obtain financial insight into every company they trade with. Sign up here to take advantage of this offer

“Freelancing has grown in popularity because of the choice and flexibility it gives people over their career, but its success relies on the prompt payment of invoices, which is not happening enough,” concluded Martin Campbell. “Credit-checking potential customers and partners is straightforward to do and should be done by a freelancer every time they work with someone, to protect themselves against late payment.”

About the research

An online survey of 1,003 freelancers and sole-traders was undertaken by TLF Research in March and April 2016.

CreditHQ, the credit-checking tool built by Ormsby Street, collates credit and trade information from Companies House, Experian and Dun & Bradstreet and presents that information in simple-to-understand credit and payment indicators, so a freelancer can assess which businesses are likely to pay them on time, or after 30 or more days.

Formed in 2014 to take over the operation of the financial data proposition of BCSG, Ormsby Street is developing the next generation of financial data services for small businesses. Its team of high-performing product innovators and software engineers are quietly taking sophisticated financial information and turning it into a next-generation digital tool to help businesses make good decisions about customers, suppliers and themselves.

We’ve been nominated for a Benzinga Award!

Ormsby Street have been chosen as a finalist for this year’s Benzinga Awards – in the ‘leveling the playing field’ category

bzawards-finalists-2016-official

The Benzinga Awards (BZ), is a competition to showcase the companies with the most impressive technology, who are paving the future in financial services and capital markets.

Last year’s winners include HedgecoVest who were the overall winner, with Estimize taking first place for best startup.

If you’d like to join in the celebrations in New York on May 24th, click here for full information and details of how to grab your ticket.

Good luck to all the other finalists!

An Egg-cellent offer this Easter week!

The long weekend might be over, but we’re extending our Easter special offer – Access CreditHQ FREE for one month!

Now we’ve hit the second quarter of the year, it’s a great chance to reflect on the first few months of the year and review the businesses with whom you’re trading.

Are your suppliers paying you on time? Might it be time to increase or reduce the amount of credit you’re extending to a particular business? Has your business’ credit and payment score improved and you’d like to show potential customers this?

CreditHQ can help improve your cash-flow and credit management, and ensure you’re working with the companies that are best for your business. If you know you want to work with a particular business but know in advance that they’re not likely to pay you until 45 days, you can plan accordingly and make sure you’ve got enough cash in the meantime for other purposes.

So this Easter, we’re offering you access to CreditHQ’s Standard subscription free of charge for one month! Simply enter the code EASTERHQ16 in the voucher code box*.

You’ll need to enter your card details, but don’t worry –  we won’t charge you a penny for 30 days (and if you find you’re not using CreditHQ, simply cancel anytime within the first month to avoid the £25 monthly subscription fee).

So hop to www.credithq.co.uk and start checking out the best businesses you should be working with!

*voucher code valid until 30 April.

CreditHQ at Finovate Fall!

We’re thrilled to now announce that we’re going to be demoing CreditHQ at this year’s Finovate Fall in New York!

FinovateFall is a demo-based conference for innovative startups and established companies in the fields of banking and financial technology. Held in New York City, the event offers an insight-packed glimpse into the future of money via a fast-paced, intimate, and unique format.

“For online personal finance nerds – like your humble correspondent – Finovate is the Super Bowl and World’s Fair rolled into one.” – MARY PILON, WALL STREET JOURNAL THE WALLET

Finovate

Competition is fierce to appear at this event, with around 70 companies from the financial technology sector showcasing new products or technology over the course of two days – both on stage and on their company stands to an audience of over 1500; including investors, VCs, entrepreneurs, expert analysts and influential press.

If you’re attending, please come and say hi and let us show you how CreditHQ can help all small businesses combat the problem of late payments and focus on growth and success.

FinovateFall is organized by The Finovate Group. For more information on the event or to view videos of previous demos, please visit finovate.com

What is a business payment score?

As part of a Credit Reference Agency’s determination of a credit score, they receive millions of trade payment experiences on a monthly basis from companies operating in a broad variety of commercial sectors in order to analyse the payment performance of companies.

Invoice Paid

Changes in payment performance constitutes one of the earliest signals of possible financial difficulty and understanding the payment performance of a company will give you an indication as to when a company will pay it’s bills.

At CreditHQ, we convert payment scores from Credit Reference Agencies into a payment indicator which uses 1-10 scores and colours to indicate high (red), medium (orange), or low (green) risk of late payment.

If you know the likelihood of a company paying on time then you are able to make decisions on when to chase debt and adjust your cashflow projections to reflect real-world information rather than standard payment terms.

How to get the most out of CreditHQ

firstIf you own a small business, then knowing what your competitors, suppliers and partners are up to, and when you will get paid is a must. Here at CreditHQ, we know that this part of the business may not be the most exciting, and usually is quite a struggle and misunderstood. This is why we have made CreditHQ the easiest possible tool for you; simple, smart and focused on the important information you need to run your small business.

So how does that work?

Getting started & searching
Landing on the CreditHQ homepage you can search for a company you would like more information on . Try to be precise with your search terms – there are a lot of companies out there. You can also search by company ID. Once you’ve entered your search criteria, our engine will provide you with a list of companies matching your initial search – just choose from the list to see details. If you already have an account, you can sign in via the top right menu of the page.

Company details & Free account
On the company details page, you have access to general information about the company (such as address, phone, company status etc.). Creating an account with CreditHQ will give you access to credit & payment indicators, credit events and insights on what to do next. CreditHQ doesn’t only give you info about a company, but also helps you make the best choice regarding the credit information that you’re provided. Oh and yes- it’s free!

2Creating an account, and why?
To create an account, just follow the “create an account link”. You’ll be asked for the usual credentials and also your company details. You can either search for your company in our database, or manually enter your company details. Creating a free account is that easy.

So why should you create an account? Well, this is where CreditHQ unlocks its true power. Having a free account will give you access to your dashboard, where you can add companies and follow their credit & payment indicator evolution. You will be given meaningful insights on how to act if, for instance, a company has a low payment or credit indicator, and the reasons why that is happening. You will also be given information or your company score and how to increase it and keep it healthy. Basically we will help you and guide you through the process. You can also set up email alerts, to know all the changes of all the companies on your dashboard. All of this won’t cost you a penny.3

Upgrading
Once you are fully set up, and want to unlock even more features. just follow the link on the side menu to upgrade to a standard subscription. Standard users will get access to accurate credit and payment indicators, credit events plus recommended credit limits and detailed valuable financial information for each business.

An insight to the future
CreditHQ is still young, and growing every day. New features such as debt management and action letters are on their way to make your life as a small business user, much easier. We aim to be as small businesses are; close to their customers and listening to their needs. We read all our emails thoroughly. If you feel that the product could be using some new features and improvements, we really want to hear your ideas! Use the contact page, and get in touch with us, we don’t bite!

www.credithq.co.uk

 

Invoice early to avoid the Christmas post rush

It’s a well discussed fact that cashflow is the lifeblood of any business, and as such we should do everything we can to ensure the flow keeps flowing, however we’re soon to be entering the season when a giant rock gets placed in the way of the flow … Christmas.

Many businesses will shut down for the festive period, which means your customers won’t be ChristmasPostpaying any of their bills. In the meantime, you’ll need to be paying your employees holiday pay and not getting in any more new business as your team open presents and drink sherry, so cashflow becomes doubly important as you need to bring in the cash before the Christmas shutdown begins.

There are however a few simple things you can do in order to make this a pain free period:

  • Invoice early – if you want your invoices paying before Christmas then work out when you need to send them by taking your payment terms and the last Christmas post into account. If it arrives on the accounts payable desk too close to Christmas it might get put on the ‘next year’ pile
  • Chase debt – don’t wait until an invoice becomes due before chasing it, instead contact your customers as soon as an invoice looks like it might become due to get it processed before the office parties and mince pies
  • Spend carefully – if there’s a chance you might not get all your income received before Christmas then keep an eye on your spending so your cashflow can cope, even if it means a New Year party rather than a Christmas party

Oh, and of course, if you want to send a letter to Santa, you’ll need to do this before Saturday 6th December so that it gets there in time for him to get your gift ready and wrapped

DearSanta

Merry Christmas!