Why late payments are a mental health issue (and what to do about it) - Part 2.

A short series on late payments, and why it isn't just a problem for the bank balance - this week, we look at confidence and capacity.

In the first part of this short series, we looked at why late payments to freelancers are a mental health issue, specifically with regards to a major problem: Cashflow.

But beyond the obvious, dealing with late payments also causes another impact: Confidence.

CONFIDENCE

For every late payment, there's a subtle erosion of the freelancers' confidence in their work, through the lack of respect being given.

"Was the work not good enough?"
"Was there a problem?"
"Has the project stalled, and I'm not going to get paid?"
"Do they not care about their relationship with me?"
"Don't I deserve to get paid?"

90% of freelancers experienced feelings of low confidence at some point in 2024 - 44.2%¹ felt this lower confidence affected their mental health negatively. A lack of confidence in their ability to generate an income, to promote their own work, to stand up and say with pride "I'm good at what I do".

And whilst confidence is complex, and affected by many different things, not getting paid on time is one of those things that can chip away at ones confidence over time.

I have far too many conversations with freelancers who are waiting on a late payment, and say things like "I don't want to sour the relationship with the client by chasing the invoice", or "How can I approach them without making them feel like I'm being difficult?, as if asking to be paid on time is some sort of favour or gift.

I've even seen recommendations from some freelancers to do things like discount clients who pay on time, and plenty of articles on how avoid getting paid late - as if the responsibility falls to us as freelancers to ensure the clients are doing the bare minimum in simply paying a bill, within 30 days.

I understand the fear and anxiety around asking to be paid on time - money is one of the last taboos. We don't openly talk much about money in this country, it can feel crass or awkward. There's very little transparency around salaries. There's a whole topic on that alone. But for some reason, there's also an uncomfortable feeling when it comes to chasing an outstanding bill.

Despite that we've delivered the work, and now they owe us.

And every time we're pushed into that situation, it can either embolden us ("Dammit, they owe me!") or it can eat away at us ("OK, maybe I'll write this one off and learn for next time").

And each time we take the hit, accept that it's "part of freelancing", we become less confident for standing up for ourselves the next time (and make it a little bit easier for the client to do it to someone else next time).

And then the third C: Capacity.

CAPACITY

Not only does it cause issues to our cashflow and confidence, but chasing late payments, writing the follow-up emails, researching our rights, asking others for advice, more chasing, more frustration - it all eats into our time to be doing work for other clients.

Not only does this reduce the income we can create, but it further adds to our stress levels, with yet another task on the todo list.

We're already burdened with the issue of finding work, and delivering the work, but having to chase payment too, and then in far too many situations, argue for the money, even end up having to spend further time and money on lawyers or going to small claims court, all of which also reduces our ability to be doing other things.... it all takes a toll.

UK small businesses spend on average 20 hours a month² chasing late payments.

And is often when freelancers will just ask themselves - at what point do I just give up and writing this one off, leading to a hole in the finances, and a need to do even more next month to cover the gap.

More work, more effort, more stress, less wellbeing.

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So: Cashflow, Confidence and Capacity - three major negative impacts on our mental health for each late invoice. Three ways late payments are a mental health issue.

Now, let's get pragmatic - because just being annoyed at late paying clients isn't enough to help improve your mental health or avoid your mental health being affected by the issue. In fact, it's possibly going to make matters worse (let me get annoyed for you).

Next week, we'll look at the super pragmatic things you can do to avoid and mitigate the likelihood and impact of late payments…

(And in the meantime, send me a note with your stories of late payments, as I'd love to share some of them here).

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Recently seen:

» Useful advice on working via umbrella companies - ahead of changing legislation around how (and who) is responsible for ensuring compliance. Plus this resource is incredibly valuable too. (Can you guess what I’m working on resources about right now?)

» Brilliant work from the team at Bournemouth U on “supportive offboarding” freelance teams. This has a focus on the film & tv industry, but could and should be applicable to many type of freelance projects.

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That’s all from me this week.
✌️ mk

1. Leapers

2. Natwest/Payit