9 Tips To Get Paid On Time
We have all heard those horror stories about customers who don’t pay. Bouncing checks? Interminable delays? I have personally heard so many times: «I lost your bill,» «The company has financial problems,» or «Have I not already paid you?» Ever thought about returning to your 9 to 5 office job just to not have to deal with those types of situations? Before putting a cross on your self-employed career, consider reading those tips and tricks, that will help you keep those bad payers away!
And even if you think these situations will never happen to you, no one is safe. Prevention is better than cure! These few measures will therefore protect you from payment problems before they even happen. These few tips will also encourage your customers to pay more quickly.
1. Be clear from the very beginning
As soon as you start a new relationship with a client, don’t be vague with your offers. Of course, rates and payment delays are sensitive subjects that we sometimes try to avoid, but it is essential to be clear from the beginning in order to be taken seriously. Specify your rates, what they include and not include, your billing methods, deadlines and the ways to pay (checks, wire transfers, Paypal, etc) before starting the work. All of this talk frighten you? Prepare a document containing all this information, send it by e-mail or hand it over to the client, so he can’t say he wasn’t aware of the way you do business.
2. Establish employment contracts
Many self-employed workers could plead guilty for the lack of contracts! This step is often overlooked, but an official document can protect you if you need to go to court for a payment that wasn’t made. Write one, at least for bigger mandates. Better be safe than sorry, and a contract can prevent you from having trouble in the future.
3. Make them pay immediately
Make it a habit to charge your customers at the same time as you hand in the job, in the same email if possible. Your client will not be able to say they haven’t received it and your request may be processed more quickly
4. Specify the payment period on your invoice
The usual deadline is 30 days, make sure that the payment deadline is displayed on your invoice and include it directly in your email. Then, under your conditions at the bottom of the invoice, clearly indicate: Payable upon receipt. No excuse possible!
5. Offer a discount for advance payments
This is an easy way to get your customers to pay you fast. For example, you can give a 2% discount to customers who pay in 10 days or less. Just make sure you put it in writing in your terms and conditions on the invoice. Also, specify it to your clients at the beginning of the relationship, they may see it as an opportunity to save.
6. Charge interest
In return, it is also possible to charge interest for late payments. However, you should not wait until it is too late before informing the customer. Let them know from the beginning that this is how to do business and state it in your terms on each invoice. If they know it in advance, they will probably want to avoid the situation.
7. Requesting Advances
For large projects that will be spanning on for several weeks, do not hesitate to split payments. Ask for a first deposit before starting work and the rest of the amount at the time of delivery. You will at least have an advance payment on which to count on in case of glitches.
8. Offering hourly-packages
You charge at an hourly rate? This might be a good solution for you. Your customers will have paid the hours in advance and will be able to use them as they see fit. Introduce the benefits the them in advance: they will not have to manage monthly bills. In addition, to encourage customers to purchase those hourly-packages, do not hesitate to offer a discount. For example, if you usually charge $ 45 an hour, you could ask for $ 400 for a 10-hour work instead of $ 450.
9. Accept online payment
Faster and more efficient, online payment simplifies the lives of your customers. By accepting to be paid by PayPal or Stripe, you offer the possibility to your customers to pay the invoice by credit card as soon as it is received.
In conclusion, the important thing is to establish all your methods in advance and stick to them, just as big companies do. Being clear from the very beginning will help your notoriety and will avoid possible conflicts!