By Princess Jones
When most of us dreamed up our businesses, we didn’t think about what we’d have to do when a client’s check has been “in the mail” so long, they could have walked it over to your office. We didn’t think about those times we’d have to call our client’s account payable department a couple of times a week to get payments straightened out. And we never thought we’d get ghosted by clients who suddenly don’t pick up the phone or answer emails when it’s time to pay the bills.
Chasing checks can be demoralizing. You have a mix of emotions, everything ranging from anger to embarrassment to feeling like a jerk for having to be so direct about money. You can create all of the revenue in the world but if you don’t collect the payments, your business can’t survive.
If you’re the type of person that dreads making collection calls, chasing checks can be downright painful. But with a few tweaks to your business basics, you can make it easier.
Contracts Are Your Friend
A handshake and a smile might have worked in the old days but today’s business is run by contracts. By using contracts, you can spell out exactly when you get paid and what happens if you don’t. You can also build in late fees for those clients who tend to pay late or nonrefundable deposits for that clients that cancel at the last minute.
Some people get caught up with thinking contracts have to be difficult. But as long as all the terms are in them, contracts can be easy. You can consult a lawyer to get a general template put together and make changes as necessary. And if you can’t get a contract in place, at least get it in writing writing. Emails and texts count, too. Just get something spelled out with the terms and their agreement.
Get a Process
Process is how business gets done. From the way your products are created to the way you sell them, it’s so much easier to see progress if you’ve got yourself a process to rely on. It will help you with billing, too. Retail businesses have built in processes — the customer gives you the money and you give them the product. But other types of businesses can use process to fix this issue, too.
Let’s say you’re a personal chef. Clients book you to cook in-home meals for special occasions. Your process is that you get in an inquiry and you meet with the client. From there you send a proposal with all of the details, including the price. When the client approves the proposal, you have them sign it as a contract. Then you take the first payment and book the date. When you show up to do the job on that date, you get a check before you start working.
Since you have the process in place, you know when to expect payments. You get paid as soon as you book the date so you’re not turning down other jobs for that time slot without a firm booking in place. And you don’t do the job until you get paid on the day of the job. The process dictates when you get paid. You don’t have to call to say “Hey where is my money” because the process does it for you.
This type of process would work for any service business but there are so many ways to build in a process for your business. All you have to do is find the right one for your business.
Get Some Help
If you’re one of those people who just don’t want to have anything to do with chasing a check, I get it. There are a lot of us out there, especially in the creative fields. Do yourself a favor and get some help for making those accounts receivable roll in.
How about using some billing software that sends auto reminders for you? PayPal and Wave both will do the job of nudging an overdue bill automatically. It doesn’t even come from you. It comes from the program.
But if you have the budget, consider hiring someone to handle accounts receivable for you. That could be an accountant or a bookkeeper or even a virtual assistant. You need someone whose job is to keep an eye on the money that’s supposed to be coming in versus what has made its way to your account. If that isn’t going to be you, find a way to delegate it.