Working hard at your craft and delivering great products and services to your clients can be fun, challenging and fulfilling. Everyday represents a new opportunity for you to build on what you’re passionate about and share it with the world. To this end, you need to ensure you have adequate cash flow to fund existing operations and allow for growth and expansion. And, part of this equation is ensuring that you get paid from clients in a timely manner.
Provide a Time and Cost Estimate
One of the best ways to ensure timely payment is to determine if your customer can afford the project to begin with. You’ll want to provide a complete cost breakdown of the products/services you’re providing along with an estimated time for completion. This will let the customer know that they’ll need to be ready to pay your invoice in full within that time frame. If not, you can work out an arrangement to start the project at a later date, when they’ll be financially ready.
Confirm Your Customer’s Payment Preferences
It’s important to find out how your customer prefers to pay their invoices. Small businesses are generally flexible and can pay online or a variety of other ways, while larger organizations can be less flexible and may only pay by check only. Additionally, some customers may prefer using one payment provider over another. For instance, many people prefer not to pay via PayPal, while many others will insist on it. You may even have customers who prefer direct transfers to your bank, which is great as you’ll most likely avoid transaction fees.
You also want to confirm the email address where your customer prefers to receive invoices. This could be a different address from the one they use to correspond with you–it could even be a different person who handles paying invoices. Additionally, their preferences can change over time, so it’s a good idea to confirm their email preference at least every year or so.
Break Projects Into Milestones
(and get paid at each one)
With freelance or contract work, it’s common practice to request an upfront deposit, then just charge the remaining balance when the project is complete. As simple and straightforward as this seems, it can result in large gaps in payments such as when projects are extended due to unforeseen difficulties, additional requests, or other delays. It’s not unheard of for a project that was originally scheduled to be completed in 3 to 4 weeks to, instead, take 3 to 4 months. That would be a very long time between deposit and final payment!
To ensure you receive payments more consistently throughout a project, set up multiple milestones, and request a payment after the completion of each. If the project seems short, then it’s fine to stay with the deposit/final payment schedule, but inform the client that additional payments may be required if the project is extended.
Additional benefits to using milestones are:
- The deposit can be smaller, making it more affordable for clients to get started and easier for you to close the deal.
- You can halt work if the client is unable to make a milestone payment. This frees you to work on other projects and maintain good cash flow.
Put Invoicing on Autopilot
During your hectic work-life schedule, it’s easy to forget to invoice customers for completed work or recurring services. And if by the time you remember to invoice, the customer no longer has the money or becomes unavailable (e.g. out on vacation), you’re going to wait much longer to get paid. You can avoid this by scheduling single and recurring invoices ahead of time so they can be sent exactly when you need them to.
For overdue invoices, it can be awkward to continuously remind clients to pay you–that’s assuming you even remember to do so. With our Auto Reminder feature, you can easily schedule reminders to be sent on a schedule (e.g. Send the first reminder tomorrow then every 5 days afterward).
Withhold Final Delivery, if Possible
The simple truth is, if a customer has the final product in hand, there’s less incentive and urgency to make final payment. It’s not necessarily intentional: once the project is complete, your customer’s attention will likely be diverted elsewhere, and they’ll need constant reminding to pay the invoice. However, if you let them see and feel the final product, but don’t deliver it, you’ll have their attention, and there will be more urgency on their end to make the final payment.
Hold Up Your End of the Bargain
Simply put, the sooner you deliver a great product to your customers, the sooner they’ll be willing to pay you. Look for ways to optimize the speed and quality of your services to get them done on time, on budget and to your customer’s satisfaction.