4. Invoicing and Payment
March for the Arts and the FWA Committee cannot stipuate rates of pay but would recommend seeking appropriate hourly/daily and weekly rates from trusted sources such as unions: Equity, Bectu, ITC etc. We are building up some information in our Union folder here too. Freelancers can also try this helpful tool for calculating their own rates.
“There is a real fear about not getting re-employed”
Be informed and inform.
Give and seek all the information about payment before work commences - be ready to pay the freelancer according to the agreed schedule, anything you need prior should be already in place.
Freelancer has a responsibility to provide invoicing and information required for payment in good time or as agreed.
Proactively encourage communication.
Be proactively flexible - encourage, accept and make room for negotiation.
Create clear lines of communication as well as alternative lines of communication between freelancer and financiers as a back up.
4.1 An organisation should make clear the process by which a freelancer will be paid.
This includes sharing information about when payment will happen, staffing structures, processes, personnel and invoicing dates in advance of work.
4.2 Organisations should be clear about all the information they need from a freelancer in order to process payment.
Be aware that such information can vary massively between organisations - so much so that freelancers cannot be expected to simply know the ‘standard way of doing things’.
Organisations should provide a template invoice.
Engage in communication prior to work to ensure that all the correct information is included in invoicing. E.g. name, address, contact details, bank details, invoice number, PO number, declaration of self assessment tax, unique invoice numbers etc.
4.3 Organisations should outline rates of pay and discuss total expected pay at the start of the job.
It should be clear whether the fee for the work will be fixed, an inclusive fee OR based on hourly work that might be monitored in an ongoing way between the organisation and the freelancer. Recording of work and tracking of hours should be discussed if appropriate.
Freelancers are often not told whether they should record hour by hour, whether they have set hours that they cannot exceed, or whether they have a set fee and no hourly recording is needed.
Organisations should think about this and the implications for budget, illness or emergency leave and monitoring.
4.4 There should be explicit communication about whether money for payment is immediately available.
It should be clear whether funding is secured ( payment will be immediately available at the conclusion of the project), or pending (is there ticket revenue involved etc?).
Although some freelancers will be happy to accept a level of risk, this should always be made clear. Best practice will avoid allowing the funding burden to fall on the last person in the chain, often the freelancer. To do this small and large companies should budget properly and be prepared to absorb temporary deficits.
Where a fixed fee has been agreed for a freelancer’s work, this should never depend on insecure funding or be subject to change later down the line.
4.5 Freelancers should provide invoice(s) including all the information needed by an organisation in a timely manner. Freelancers should also be proactive in finding out all the information they need to submit their invoice on time.
Freelancers can access a free MFTA invoice template here.
As a brief guide, invoices should at least include:
your full name and address;
your bank details for digital payment (if you are being paid in a different way, e.g. cheque, this should have been agreed and discussed in advance of sending your invoice at which point you should also confirm which details you need to include in your invoice in order to get paid);
description of work;
amount of money you are owed;
dates you did the work;
the date you are sending the invoice;
your invoice should be numbered
and have your name included in the file name.
4.6 An organisation should provide a freelancer with the direct contact details of the person responsible for processing their payment.
4.7 Communication about payment should be openly encouraged.
Organisations should take proactive steps to ensure that freelancers will communicate any issues with payment including chasing late payment, making alternative payment arrangements or negotiating pay without fear of relationship damage, i.e. ‘not being asked back again’.
4.8 Where discussions about payment and invoicing have been conducted on the phone or in person any agreements made should be followed up in writing.
This should apply to both organisations and freelancers, although it would be best practice for organisations to take the lead on formalising agreements.
4.9 Payment should be made promptly within the agreed timeframe. Clear communication about this should be maintained, particularly if there are delays to payments for any reason.
Freelancers can refer to the Late Payment Act if agreements are not met, or not made in the first place.
4.10 Organisations should commit to being flexible.
Organisations should be clear about payment structures and whether there is any flexibility.
In all cases, organisations should commit to educating themselves and sympathising with the various needs and circumstances of freelancers - openness to compromise about payment structures is best practice; as is listening to individuals about what works best for them.
Overall, it is necessary to be clear about the possibilities for flexible payment, i.e. what can be offered and what can’t.
4.11 Best practice would be to commit on both sides to any changes discussed.
If you’ve made an agreement or communicated about an issue and agreed to any change to the process of work or payment this should be formalised (e.g. provide confirmation in writing or alteration of contracts).
Organisations should take the lead on formalisation as freelancers often feel chasing things up will make them seem ‘hard to work with’.
4. This might be needed to identify your invoice for yourself or for an organisation, freelancers and organisations should communicate about whether this needs to be more complex than a freelancer simply numbering invoices 1, 2, 3 and so on.
5. MFTA cannot be prescriptive about what constitutes prompt payment as this may vary depending on size of project/organisation or length of project. To pay within 30 days is commonly acceptable; after this time the payment owed becomes legally defined as a ‘debt’ and is subject to statutory interest. A reasonable timeframe should be set out before work commences so that if said timeframe is unacceptable for a freelancer but cannot be changed, the freelancer can make an informed decision about accepting work. Further guidance about reasonable prompt payment standards may be found here.
If total payment is unknowable or subject to change over the course of the project then minimum and/or maximum pay for the job should be set out and communicated clearly.
Direct contact to the finance department, person or team, is important even if this is not the first route to payment or main contact for work.
Ideally freelancers should be provided with a finance contact that is separate from their contact for other work or collaborators. This is so that a freelancer has another route for communication in case relationships or systems break down.
In small organisations it might simply be best practice to provide the contacts for all relevant staff so freelancers have some alternatives available.
Self-employed engagements should be approached as negotiations between both parties, and freelancers should feel comfortable setting payment terms.
Payment plan options are good practice and can include payment milestones; deposits; weekly, monthly or whole project payment.