Hands up if you’ve had problems being paid by a client? Thought so. It still amazes me that so many client companies get away with not paying for freelance services received. It’s short sighted, and immoral, but some companies and organisations (including some well known and established names) still get away with it.
Of course there are all sorts of reasons why clients don’t always pay up in a timely and fair manner, but when big companies trade with each other, particularly with larger projects, they frequently check their prospective partner out first in a process called ‘due diligence’. In a nutshell, this is about making sure that their new trading partner is not going to go out of business soon, has a good credit score, and a track record of paying their bills, doesn’t owe too much money and haven’t got themselves into hot water with the regulatory authorities.
The fundamental problem is that as freelancers we are usually in an unequal partnership with our clients. They are often bigger and it can feel like they call all the shots. But it’s got a lot easier to check up on your prospective clients before you start working for them. Whilst you might still decide that it’s worth the risk, particularly if the project will give you opportunities for learning new skills or just because the name looks good on your profile, just doing a few basic checks could make all the difference.
There are some excellent tools available to you – many for free to find out more about your potential clients. You can use them individually or in combination, which is usually what I do.
Duedil lets you run free searches for Companies House registrations and directors’ names – you can usually get an at-a-glance look at their recent financial reports and who their shareholders are.
It’s incredibly easy to use (honestly, I’m not a numbers person, but…). You can very easily check out your prospect company from a simple dashboard. Firstly, that the company hiring you is actually a legitimate, registered trading entity, and secondly that they’re not in dire financial straits – their credit score.
It might also be worth checking whether the person you’re dealing with is a company director, or further down the ladder – just to give you a clue of how closely their interests should align with those of the company as a whole.
And there’s an app too…
Most people are on LinkedIn and to be honest, if they aren’t I think that says something anyway. LinkedIn is a good place to look for individuals and to start to put together a qualitative picture of that person and their experience. You’ll often pick up comments in their recommendations from previous suppliers.
It’s not the only place where you can find out about companies, but because it is a social network it will give you a richer feel for the people that you want to deal with .
The fabulous Freelancers’ Union in the US created a very useful resource in The World’s Longest Invoice. Freelancers who haven’t been paid can post their stories on the site. It’s a great way place to check whether your prospective client is on that list, although clearly more useful if you are based in the US.
This is a great resource for information on how to secure early and complete payment from your clients. It has an up to date list of all the latest legislation and tips for getting paid.
A Whois lookup allows you to find out more about who registered a particular web address.
It’s amazing what you can find out just by using this service. It will tell you when the website was registered, who by, and should give a contact address. It will give you a good idea of whether it’s a website associated with a bricks-and-mortar business, but you can also cross check the names with Directors on Duedil.
This ties in with the Whois lookup described above – if you’ve got a contact address for your potential client, see what Google comes up with. If the client company has a history of non payment, there will be a trail of comment on the web that Google picks up. Likewise, you will see from Google Maps if their office location looks questionable. (You’d be surprised!)
Just because you are a one man band, it doesn’t mean that your clients should value your time, skills, experience any less than those offered by larger companies. These tools and techniques are simple to do, won’t take long and will, with any luck, make all the difference. Give them a go!