Not getting paid fast enough, on time, ever? (yikes!). Lets see if we can make this problem go away. First lets go over the standard ideas on why people don’t get paid. Often it can come down to expectations up front. How much will the service cost, when will you invoice, how soon do you expect payment, etc. So we’ll make that our first item.
1. Set clear up front expectations
When you’re first starting to work with a client or talking about your exciting services and the awesome things you can do for your client it’s hard to think about payment terms, invoices, etc. Because honestly that seems kind of a downer to talk about when their are so many more exciting things that could be being discussed. Not to mention you work hard to get clients interested and who would want to ruin a perfectly good sale with talk of payment terms. But remember it’s not really a sale if you never get paid.
So why while we would never tell you to put this at the beginning of the conversation we would say to put it in their somewhere, even at the very end. Which is exactly where we would put it too. But just remember without clear expectations on how and when you expect to be paid, it will hard to tell your client they knew ahead of time.
2. Invoice promptly
Don’t wait any longer than you have to invoice for your work. A lot of larger companies have payment cycles and won’t pay you on time if your invoice comes in after their cycle date. These cycles can be as far out as once a month so don’t get caught in that trap. People get busy and just plain forget, get distracted, etc and even an honest mistake like this can put your business in a tight spot. Good customers can be as careless as the bad ones when it comes to the bright shiny objects in their business getting in their way. The best way to be sure you get the attention you deserve for your invoice is to make sure your client has it as soon as possible once the work is complete.
3. Use us! (shameless plug)
Seriously, the reality is that businesses large and small are going to have to manage their invoices and follow up. If you’re a small one person shop every hour you spend hounding clients about invoices, sending extra invoices copies, etc. is one less hour you have to spend working on the thing that actually gets you paid to begin with.
Not to mention that cash outstanding is really just a loan to your customer made at a very high interest rate and we don’t know about you, but we would be willing to bet you need that cash to run your business.
Large or small chasing invoices costs money and we know we can do the job of consistently following up on your invoices while you focus on the work you love at a lot less cost no matter how big or small you are.
4. Follow up early and often
Clients are like all people, forgetful at best. Make sure clients know when their invoice is ready and many will pay right away. Then again a week before and/or the day before the due date is also another great time to remind them to pay. These reminders really serve two purposes, on one hand they will get you paid directly and on the other they serve as a reminder that a due date is on the way. That way when the date arrives or worse the past due arrives they can’t say they weren’t prepared.
5. Sometime you gotta be direct
So when all else fails sometimes you just need to get on the phone and give them a call. Sometimes a client doesn’t understand the seriousness of the situation, has extenuating circumstances, or are being just plain lazy. The best way to change this situation is to touch base over the phone. It’s easy to delete an e-mail or ignore automated systems, but a real person is hard to say no to.
Hopefully these tips help your business get a leg up on your collections and as always give us a call if you need help making this all happen without you lifting a finger!