You worked hard. You took time to research the brand and product, to take amazing photos, to map out your content creating a story that is yours and authentically yours. You hit publish, and work some more. You promote and share and engage. You make sure your network sees your content. You answer questions and make suggestions. You put your neck out there for said brand.
And then, you never get paid. Now what?
With the news of a billion-dollar media company closing and leaving many bloggers out lots of dollars, the question has come up on what to do now. What recourse do you have when you don’t get paid for the work you’ve done?
- Know your options
You could find a collection agency and turn over the process of getting the funds to them. They will take a cut of the money owed to cover their time in collecting, but it saves you the time to follow up. Often, collection agencies have a minimum so you have to be owed a reasonable amount to make this feasible. Plus, the company has to still be in business.
You could just jump to suing them, but there are many things that need to be known to sue. Where is the governance of your contract? What does it say is the proper course of action? The actual paperwork to file is not that difficult to fill out, but knowing where to file and taking the time to do it all, including showing up to court, can be costly.
If the company closes its doors and, say, files bankruptcy, the first thing you should do is nothing. Yes, nothing. Don’t contact them about the money you are owed. Once bankruptcy is filed, all collections must cease. The only way to potentially get any of what you are due is by filing against them as a creditor, which means filing a Proof of Claim. Once you are a creditor, you can show up to the court date and actually ask questions about what happened. But, don’t expect to get much in the form of payment. It’s usually cents on the dollar, especially with an unsecured debt.
TIP: Sign up for an account with Public Access Court Electronic Records (PACER). This way you can follow the bankruptcy case.
- Evaluate your time
You already spent hours doing the work. Is the money owed worth more hours of your time? Let’s pretend you are owed $200, and the only way to get paid is through legal action because the owing company filed bankruptcy. If you value your time $30/hour and already spent 4 hours to earn the $200, then you’ve got $80 of time value left to spend to just break even.
You have to decide if spending your time that way feels like it’s of value to you. The more you are owed, the more likely it’s worth doing something. However, don’t forget to consider that bankruptcy payments are cents on the dollar, if anything.
- Know the tax implications.
The bad news here is that most influencers report their income on a cash basis. This means when you don’t get paid for your work, you get no tax benefit. You can’t deduct a bad debt when you never claimed the income. If you happen to report your taxes on an accrual basis, then you can deduct the lost revenue because you already counted it when you first did the work.
If you happened to incur any expenses as part of the campaign, you can deduct those. For instance, if you paid to boost your content on Facebook, you can still deduct the cost of the boost.
- Don’t lash out
There is nothing happy about losing hard-earned money. Definitely connect with your community for support and understanding, but be careful who else you pull into the conversation. Often, if other partners/brand/companies were involved, they are also getting the short end of the stick. Maybe not in the same way, but calling them out when they are just as shocked as you are won’t a positive step forward.
On personal note, as someone whose business it is to run an Influencer Network, the Pet Influencer Network™, I want to reassure our members and say that one bad cookie isn’t indicative of a massive outbreak in the industry. The industry is shifting and changing and growing, and I believe there are amazing opportunities ahead for both networks and individual influencers. I also believe that each person needs to take their business (influence) and their brand (blog/social media) seriously. Do everything like any other business would do them. Have contracts, media kits, sales decks, work on your negotiation skills, your branding and marketing, network and build relationships, and everything you need to be a successful business. Many of you do these things already, and yet there is always room to take it to the next level. And, if you don’t do all the business things yet, today should be the day you start.
In the end, losing money sucks. There really is no positive spin on it, but if you are in the business of influencer marketing, don’t let one company drag your influence down. What changes can you make to your operations to try and prevent revenue loss again?
Chloe DiVita is BlogPaws’ COE, Chief of Everything, and an animal-loving data junkie.