Asking your customers to pay you should be the most difficult part of your work. You've worked hard to find a customer, agree on a price, do the project, and deliver the finished product. You should be able to relax and watch the money come in. Unfortunately, this is not always the case. According to the Credit Protection Agency, over half of all freelancers have experienced repeated late payments on invoices.
In this piece, we will discuss how to encourage a customer to pay your invoice, as well as some procedures you may take before you begin work to guarantee you get paid fairly and on time.
Before you begin the task
You make sure:
- Send A Services Agreement To Your Customer
- Establish Your Terms And Conditions
- Don't forget to request a deposit
Send a Services Agreement to Your Customer
This has been stated before, and it will be repeated again. A service agreement (or basic contract) is the most powerful instrument you can use to ensure that a client pays you the exact amount on the correct date. Send your customer a service agreement before you accept to take on the work. This should include the following information:
- What kind of work will you be doing?
- How long does the work usually take?
- How much will you charge that includes late fees, etc.?
- When is payment due?
- Any other relevant data?
Having clients agree to these conditions in writing ahead of time creates a paper trail on which to fall back if collecting money becomes difficult.
Establish your Terms and Conditions
Make your payment conditions very clear in your service agreement and at the bottom of your invoice. Make it clear to the client how much they will owe you when payment is due, and the repercussions of late payment.
A standard invoice would read, "Payment is due within 10 days," which is acceptable, but you can go much further. Something like "payment due within 10 days of the given invoice" or even "to be paid in full by (a specific date)" on your invoice and in your services agreement gives little room for doubt about what a customer owes you and when.
Don't forget to request a deposit
Asking for a deposit before work commences is a fantastic way to ensure that your customer pays your invoice. Accepting a partial payment upfront, especially when dealing with a new customer, relieves some of the burdens of "chasing" invoices afterward. If a consumer is hesitant or refuses to cooperate on a deposit, you'll get a sense of how they'll manage a complete payment later on.
A 50% deposit is usual, but depending on your sector of business and amount of expertise, you can go higher or lower.
Following the issuance of the invoice
You make sure:
- To Obtain Confirmation
- Know How To Interact With Your Customer
- Don't Give Up!
To Obtain Confirmation
Your email may have easily been lost in your client's inbox, or it could have been opened with the intention of being read later, only to be deleted. This happens frequently due to simple carelessness.
When sending an invoice to a client (with complete payment terms and conditions, of course), it's a good idea to ask them to acknowledge the receipt. Include a line in your email that says something like, "Please reply with confirmation you've received this invoice." If you don't hear back within a few days, send a follow-up email asking for confirmation again. Receiving confirmation is a good indicator that your invoice was neither lost nor disregarded.
Know How To Interact With Your Customer
Whether or not your customer has paid their invoice, it is always a good idea to follow up with them once the task is completed.
If your customer has paid your invoice (or even if they haven't), ask them to submit feedback on your website or Facebook page. This will generate testimonials for your service, resulting in more traffic to your website. If the client hasn't paid your invoice yet, having your name in their email will act as a subtle reminder that you're still out there, presumably waiting on a past-due invoice.
Don't Give Up!
It's exhausting to chase down invoices. It may be difficult, and the temptation to give up is tremendous. In rare situations, a client will purposefully delay paying your invoice or just refuse to pay you the entire amount you're owed. Don't be hesitant to urge your customer to make payments on a regular basis. Remind a late paying (or partly paying) customer to finish your payment on a regular basis.
If you are requested to renegotiate your pricing after the job has been completed, you have a paper trail that the customer previously agreed to. It's your hard-earned cash, so take it!
All of these tools will make your life as a freelancer or small business owner more convenient. Following these procedures will allow you to spend less time hunting down invoices and therefore more time doing what you love!
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