Q+A: An Anonymous Accounting Staffer on Why Freelancers Are Paid Late

Even when efficient processes are in place, the most common culprit behind late payments is human error.

Interview by Audrey Carleton

It seems like every freelancer has a nightmare story about a centuries-late payment or a client who ghosted right after they received a commissioned assignment. We spend so much time chasing payments without any insight into what’s going on behind the scenes…so, what is going on behind the scenes?

Study Hall spoke to an employee in the accounting department at a small media company about the internal processes involved in getting freelancers paid. The staffer, who asked to remain anonymous, estimates that they field dozens of invoices per month. Despite having efficient processes in place for paying vendors, they say the most common culprit behind late payments is human error.

This interview has been edited for length, clarity, and to remove identifying details.

Study Hall: Walk me through your payment process from the moment a story is assigned to a freelancer to the moment they get paid.

Anonymous: It’s actually a very easy process. The editorial managers here who work with vendors deal with getting contracts, negotiating their rates and things like that. And once that’s all done, they gather all the paperwork and they email me the vendor’s contract, their W9, and their invoice. That’s all I need to process payment. I have the contract there that I can reference to make sure that the amount is correct. And then once I get that, I enter it through our company’s accounting software and get them paid.

SH: What’s the average wait time for an invoice?

A: We tell our vendors that we will process on net 15 [paying within 15 days of the date they send their invoice]. But most of the time, I’m paying people every week. Say I get an invoice on Friday. I’ll enter it on Tuesday, have my boss approve the payment to go out, so it’ll probably go out by Thursday. If it’s a physical check, then the vendor will get it the following week; if the vendor has direct deposit, they’ll get it the next day. The maximum is net 15, but they typically get it faster than that.

I try and set aside a couple hours twice a week to enter invoices, just because the volume gets too much. The invoices do take a while to enter. It’s very tedious and time-consuming. I’ve had one invoice with so many items on it that it took me an hour to enter — just one invoice. So I try and do that twice a week.

SH: What are some of the circumstances internally that might cause a payment to be sent to a freelancer late?

A: If a manager forgets to send it to me.

SH: That’s the only thing?

A: If they forget to send the invoice to me, or if they send it to me missing the vendor’s W9 or missing their contract, then I put it back on them. If they’re missing any information, I won’t see it until I actually go to enter the invoice. And that may have been three days after they sent it to me, and then we’ve got to wait for the documents to come in. So that’s typically what happens [when a payment is late].

We also encourage our contractors and freelancers to set up payments with their bank information so that they can get payments through direct deposit versus check. Once it’s processed, it’s a day turnaround [with direct deposit] versus five days for mail.

SH: You work at a smaller company, which comes with its own challenges. What are some reasons that you think larger media companies with large accounting departments might experience delays in paying freelancers?

A: I feel like whether the company is big or small, it doesn’t really matter. For accounting, it’s just making sure that the processes are in place and the checks and balances are there. As long as they have good instructions, there shouldn’t be any out-of-the-ordinary things that would delay payments. It’s up to the company and how they set up their payment processing schedule.

If there are higher-level approvals that may be required, then that might delay things. I imagine in a larger company, you probably have an accounts payable person who is entering everything, and that probably has to go to the chief accounting officer or a high-level accounting manager, and then once they approve it, they might need to send it back to the managers to approve. And at other companies where I’ve worked, the flow is a bit different. Stuff like that could cause delays.

SH: In an ideal world, what would best practices for payment processes be? How could things improve at a company like yours?

A: If you’re talking about efficient workflow, I think that the way that we do it right now is the most efficient way. I can’t think of any other way that it could be faster than that. It really comes down to whether the managers send the invoice to me right away or if it’s sitting in their inbox. Those are human behavior things that could delay payments; it’s not necessarily part of the process.

SH: If you had to give any advice to freelancers chasing late payments from clients — or looking to avoid late payments altogether — what would it be?

A: My advice for freelancers is to work [early payments] into their contract. Ninety percent of the time, we pay the entire fee at the end. If they’re going to need their funds before, then work it into the contract and say, “I’m already going to be doing the work before it’s finalized, so 50 percent up front, 50 percent at the end of the project.” Companies can say yes or they may say no. I don’t know what it’s like with bigger companies, but for us, we’re generally pretty flexible.

SH: Is there anything else you’d like to add?

A: Because we’re so small, I was able to determine certain processes. It’s been good to be able to get through the process and figure out what is the best way for us.

We also understand that it’s really difficult for freelancers; they need their money right away and their cash flow is not regulated like a normal paycheck would be. We’re very sensitive to that, and we do whatever we can to get them paid as quickly as possible.

And that’s the thing: with [freelancers] getting us all the information that we need and having everything complete when it comes to us, it’s really not that hard. The manager gives me all the information I need, and then we pay them.

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