36 minutes | Oct 1st 2020

#74: How to Get Paid on Time & Charge Late Fees, with Wudan Yan

Today’s guest is Wudan Yan, an independent journalist in Seattle, who covers science and society. She has written for National Geographic, The New Yorker, The New York Times, Elemental, Harper’s and MIT Tech Review. Wudan also writes for brands and is a fact-checker.

She is the co-host of The Writers’ Co-op, a business podcast for freelance writers. Her co-host is Jenni Gritters, also based in Seattle, and the two describe their podcast as an “audio handbook for freelance creatives.”

In summer 2019, Wudan self-published an article on Medium called “I was owed about $5,000 from late-paying publications. I tried to hold them all accountable. Here’s what happened.” The article hit a nerve with freelancers and went viral.

Wudan wrote the article after she returned from a two-week vacation and none of the $5,000 she was owed by clients was in her bank account. She freaked out. But she was also fed up with clients’ excuses about not paying on time.

She had read a social media post from a photojournalist who added a 20% late fee to client invoices. Wudan messaged her to learn more and then began researching laws around late fees. She learned that in 2017 New York City passed the Freelance Isn’t Free Law, which says freelancers must be paid within 30 days of invoicing. It also says that freelancers are entitled to double damages if payment is late. It only covers freelancers who live in the city or clients based in the city. Although Wudan doesn’t live in New York City, one of her clients is based there, which meant she was covered by the law.

Wudan decided to go for a 10% late fee, not double damages, since this was her first time fighting this. She also sought the help of a lawyer.

All three clients had different responses. One major media company kept replying that they don’t pay late fees, but Wudan kept sending her updated invoice. They finally agreed to pay a late fee simply to resolve the issue “amicably.” A second client said essentially, “We paid you for something else on time, so we won’t pay a late fee for this,” which made no sense. The third publisher said the issue was pushed to the CEO of the company and he didn’t like the situation, and the company said if Wudan charged a late fee, they would never work with her again.

She eventually received late fees from all three clients, but she has never worked with any of the three again.

Wudan says she became a journalist, in large part, to hold people accountable. And that goes with her own business. Calling out the publishing industry’s poor practice of late payments was her way of holding the industry accountable. She also wanted other freelancers to know that charging late fees was possible.

Wudan wanted to “flip a switch” in freelancers’ minds from being passive and just waiting on late payments to acting like a business and going after late payments.

After Wudan wrote the piece calling out the publishing industry, she stopped working with clients who paid her late in the past. She also gained more confidence to charge late fees.

Wudan advises freelancers to try to get a late fee built into their contract. Ideally, add in: “Client will pay the contractor 30 days after receipt of invoice. Invoices paid after this timeframe are subject to a XX% late fee.” Specify that the late fee is compounded monthly. You may want to choose a 10% or 20% late fee.

While publishers don’t like the late fee clause, in Wudan’s experience they often agree to that first part: “Client will pay the contractor 30 days after receipt of invoice.” Even if that’s the only part they will agree to, she still includes on her invoices: “Client will pay the contractor 30 days after receipt of invoice. Invoices paid after this timeframe are subject to a XX% compounded monthly late fee.”

If they reply that they only pay 45–60 days after receipt, then Wudan builds interest into her fee.

Wudan uses Google Sheets to track when she filed her invoices. She hired an assistant, who reviews the invoice sheet at the end of every week. If an invoice is almost due or past due, she writes Wudan an email with that list of clients. Wudan set up a separate “bookkeeper” email, and her assistant sends clients notices about late payment through that, which shows more of an appearance of a business. You can create this separate email address yourself, even if you don’t have an assistant.

Chasing down money is emotional labor. Wudan hired an assistant to chase down payments so that she wouldn’t be angry every time she had to write those emails.

Wudan usually goes straight to accounts payable and doesn’t get her editor or direct client involved.

Wudan’s final advice: Freelancers need to push for late fees and on-time payments. Clients often tell Wudan no one has ever asked them for a late fee before, which is indicative of freelancers being more passive when it comes to payment. Maintain good relationships with your editors and clients, and they may be able to change the system from the inside and advocate for freelancers. You can also refuse to do more work until payments are caught up.

 

Biz Bite: Calendly app

 

Resources:

Wudan’s article on late payments (originally published on Medium): “I was owed about $5,000 from late-paying publications. I tried to hold them all accountable. Here’s what happened.”

Freelance Isn’t Free Act in New York City

Wudan’s podcast, The Writers’ Co-op

Wudan on Twitter

Wudan on Instagram

WudanYan.com