writers.com feature:

Getting Paid

By Paula Guran

January 2002

After more than a year of an interesting, creative, and -- most importantly -- *salaried full-time* job, I am back among the ranks of freelance writers. Although there are ecstatic fulfilled freelancers, I'm not one of them. I find freelancing often has very little to do with being paid and everything to do with being *owed* money. (No worries here -- Writers.com pays quickly.)

I fully aware of the other side of the issue. As a small press editor I know exactly how difficult it can sometimes be to get those checks out on time despite good intent. I realize there are cracks to fall through in corporate accounting departments and payment is just one of many tasks for the harried small publisher. But understanding the situation does not pay the bills.

So, I looked into common pointers, added some common sense as well as my own experience and that of others, and came up with this advice. I just hope I can follow it -- and that it works!

The best way to prevent a payment problem is to avoid misunderstanding. Understand the payment terms up front. Are you getting paid "on acceptance" of your work? On publication? Within a certain time period after acceptance or publication? If you are supposed to invoice a client for your work, what is the normal payment cycle? Can you invoice *before* your project is completed so you can get paid faster? Is the client/publisher willing to pay up front? Can payment be received in increments as the work progresses?

Getting a written contract, signed letter of agreement, or even a fax or email confirmation for a project is important. A signed contract and any other paperwork you can produce -- a purchase order, correspondence (including email), source materials, copies of anything produced using your writing -- are always a help if you face collection problems. But when dealing with relatively small amounts and small press such "proof" may not get your money any faster.

Still, you can use the paperwork to remind the editor/ publisher/ company of the agreement. On the other hand, more work than you might expect is done with only a "handshake" (and a virtual or telephonic one at that). If this is the case, you might at least make notes as to the agreement for future reference.

Contracts are an absolute necessity, however, when dealing with large amounts or long-term commitments. In general, publishing contracts (and oral agreement between parties *are* valid contracts) should include specifics covering (1) subject matter (2) payment terms (3) quantity and quality (delivery, length, other deliverables) (4) duration of the agreement (5) work to be done (delivery and obligation to publish). Work-for-Hire contracts, however, must in writing to be valid and should contain a "vesting of rights" clause.

Even if collection does not become a problem, if you are dealing with a large corporation or publisher, written contracts can (at least) help you deal with in-house accounting shifts, project re-orientation, and corporate changes. And these days -- expect changes! In 30 months of doing monthly contract work for Universal Studios, I went through at least four major changes in the way invoices were paid, the information needed on an invoice, and/or the manner in which to invoice; numerous changes in the personnel who handled payment, three editors, a department change (from being "Universal New Media" to being "Universal Studios Online"), one crisis over a movie starring a pig, and when Vivendi took over we "evolved" into a "fully integrated global leader in media, communications and entertainment."

In other words, big is not always better but your measly check is probably not really a problem, it is just tied up in the company's system. To help things along make sure you follow all the "rules" and be prepared to re-invoice if needed. Stay on top of the dates involved -- if you are supposed to receive payment Net-30 days, then start checking five days past that date. Let your direct contact know immediately if there has been a delay or lack of payment. Finding someone in the company who can personally shepherd your bill through the payment labyrinth can also be a real plus.

And do remember -- whether with the big boys or the little guys -- to be polite. Getting angry or making accusations of deliberate deception won't help. Give them the benefit of the doubt. You want your money, not the satisfaction of moral superiority or a chance to vent.

If you are dealing with a company, try make direct contact with the person who *really* pays the bills: the person in charge of accounts payable, the CFO, the controller, or even the president of the company. This may be impossible, of course, but it is often effective if you can manage it. If the person acknowledges what is due and commits to paying you then STILL doesn't send a check, then you know that re-invoicing is a dead end.

So, let's assume polite reminders via phone, mail, and email haven't worked. What next? Write a strongly-worded letter stating if you do not receive payment within two weeks, you will have no choice but to take legal action. Send it as certified mail. Your return receipt will prove it has been received. If nothing happens in two weeks, send a second letter repeating the first.

If you still haven't heard from the deadbeat, you now have choices to make. The standard advice is to hire a collection agency or attorney. If you happen to be on good terms with an attorney and can get some free advice, you might want to do that at this point.

But there's one more step you might take first. I'm not sure where the wording for this came from, it was passed on to me some time ago. I am NOT an attorney and am not providing legal advice here -- but this technique seems like it might work.

Send another letter stating the amount in question is about to be declared uncollectible and that you intend to write it off as a tax deductible bad debt. (I'm not an accountant either, so check with yours or the IRS. Deducting a bad debt is a little complicated.) Then explain:

"My loss becomes you/your firm's gain and as such I WILL be reporting to the IRS on a form 1099 the total amount owed to me as INCOME TO YOU for the current tax year. As I doubt I am the only individual or firm that has a debt collection problem with you/ your firm, an audit of all your business activities will be suggested.

"Additionally, I will be pursuing all legal avenues for collection of your obligation, plus all collection costs and accrued interest.

"As a courtesy, and in the spirit of cooperation, I will hold off this mailing for five (5) business days. Please let me hear from you if you wish to make arrangements for payment."

If this gimmick doesn't work you have another decision to make: Is the amount in question worth any more of my time? In Small Claims Court there are no lawyers, thus no lawyer's fees. If you take the case to Small Claims Court, you'll still have to spend considerable time filing (the cost ranges from $10 to $75 according to your jurisdiction) and preparing. You will also be out at least one day of work. The maximum amount you can sue for varies from state to state (example: California - $5000, Massachusetts - $2000, New York - $3000) and some states have minimums, too. (Check online or under "Courts" in your phone book for more information.) Hiring an attorney involves more costs, but is, of course, worth it if the amount is large enough.

Collection agencies are another option, but probably not for most writers. Costs (and specialty) vary. Costs often depends on the volume of business you can offer and the amount of debt to be collected -- in other words, they may not even be interested in your problem. At the least plan on paying 25 to 30 percent of the amount collected or maybe even a 50-50 split. Look for membership in the American Collectors Association or the Commercial Law League of America and ask for proof of insurance to protect you for "any errors made by the collection agency." (Yeah, that sounds sort of sinister to me, too.)

Unfortunately, *my* amounts aren't that large. If yours are equally paltry, the best you might be able to do is to alert other writers that this is a "bad market" or that the individual is not trustworthy. There are many writers groups, organizations, newsletters these days to whom you can pass your hard-learned information.

Of course, this might provide some personal satisfaction and a help to others, but it won't pay *your* bills.

Copyright (c) 2004 Writers on the Net. This feature was originally published in "Writers.com," the monthly electronic newsletter of Writers on the Net. This publication may not be reproduced in print or posted elsewhere on the Web or used in any other fashion, in whole or in part, without written permission from Writers on the Net/Writers.com. Subscribe here or by emailing writers@writers.com.

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