As a small business owner, if you spend more time managing your money than doing work in the first place, you’re doing something wrong. Whether you’re constantly chasing late payments from clients or trying to work out who owes who what, spending too much time getting your payment into your bank account is a recipe for disaster.
Fortunately, there are some simple steps you can take to get organized and paid on time.
1. Share Expectations
Let’s face it, sometimes money is the last thing you want to talk about with a client. Perhaps you’re working for a friend, or maybe you don’t want talk of rates to get in the way a creative project — whatever the reason, it’s wrong: money has to be ‘in the room’ from your first client conversation.
Simply stating your payment process is the most straightforward approach and will often seem more professional, but if this makes you nervous you can always start by questioning the client: ask them when they like to be invoiced during a project and whether there’s anything special they’d like to see on the invoice itself. You can then follow up by talking about your expectations for payment.
2. Be Clear
You don’t want to receive late payments because your client is confused or unclear about something. State your payment terms in your contract, and reiterate them whenever you have the chance. Don’t allow confusion to be an excuse.
3. Get to Know Your Contact
If you’re freelancing for a business with an accounts or operations department, it can be very helpful to know who to contact should a payment become overdue. A name, email address and phone number will do wonders for prompt payment. You should obviously always be polite and patient with the person holding the purse strings, but it’s also important not to be a pushover.
4. Create an Invoicing Process
An invoice is a piece of communications just as important as anything else you send to your client. This invoicing guide will give you a comprehensive walk through on how to invoice, but here are a few quick pointers:
- Include a thorough breakdown of costs
- Include your payment terms
- Invoice regularly for smaller amounts rather than irregularly for huge bills
- Include your contact details
This list of invoicing services provides some more options worth exploring. You could also consider using more robust accounting software to help you create more professional invoices, send them out promptly and then keep track of payment dates for everything that’s going out the door.
5. Keep Communicating
Keeping the lines of communication between you and your client open throughout a project will make payment a lot easier. If you’ve been difficult to get ahold of while delivering the work, your client might feel like you deserve the same treatment when it comes to payment.
In the same vein, when it comes to talking about money, make the effort to communicate simply and clearly. If you’re discussing payment on a call or face-to-face, always follow up with a written version of what was decided.
If a payment is overdue, you need to keep the pressure up in your communications. It can also be useful to keep track of dates — for invoices and follow up communications. That way, you can easily prove that the late payment isn’t anything to do with your lack of engagement.
Image credit: johnridley