The average freelancer in the UK is owed nearly £5,500 in late payments, with over a third (36%) resorting to payday loans to cover the shortfall.
Research by fintech start-up, Ormsby Street, found that half have considered quitting life as a freelancer and 46% have suffered some stress as a result of late payments.
One in 10 freelancers have faced difficulties paying their mortgage or rent because of late invoice payment, and many have turned to family (37%) or 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.
Martin Campbell, managing director, Ormsby Street, said: “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.
“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.”
Ormsby Street said 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. Fifty-seven per cent 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.
Mr Campbell added: “Why should a freelancer waste their own billable hours chasing payment for work that has been successfully completed and is already due for payment.
“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.”
