There are few things more frustrating than investing your energy, time and skills and failing to get paid on time. Unfortunately, this is a reality that many small business owners have to face quite often. The following strategies can help to fine tune your skills at the art of billing so you get to enjoy the full rewards for your work.
A great way to do this is to prepare and have the client sign a written contract. Word-of-mouth agreements are not much good in case of a conflict. A signed contract presents concrete proof that the client accepted their financial obligations to you. The contract should include provisions such as payment schedule and dates, late payment policy and key deliverables. If you are using a borrowed invoice template, you might want to check the stipulated terms carefully and make sure they are aligned with the contract. The little words at the bottom of your invoices are more than just paper fill, they could be the determinant on whether you get paid or not. Use simple, polite language and include a message on late payment penalties such as interest.
Before you start working for a new client it is advisable to find out their track record with outstanding payments. Their credit rating can help to tell your chances of getting paid. Additionally, make an effort to know the person who processes payments or signs checks. In small businesses, this is most likely the owner, in large companies it is almost always someone in the accounting department. You can contact them personally when the payment is late. If you are suspicious you will not get paid on time by a client, ask for the payment in advance. This will require some negotiating skills but if you get it right, you can avoid numerous disagreements with your client. You should position the gesture as an act of good faith on the client’s part. Some clients will happily pay before you deliver on your side so do not hesitate to ask.
Most vendors take between 30 and 60 days to pay contractors. However, you can quicken your payment by stipulating fewer days say 14 days on your invoice. This way, you can call your client sooner to find out why the payment is late. For many clients, your call is usually enough to spur them into action and sooner rather than later, your check will be clearing the accounting department.
If you have met your client’s expectations and they are already benefiting from your product, you have a right to get paid. You should therefore not feel bad about following up on your payment with zeal. All the same, this should always be done in a respectful manner. Resist the temptation to fly into a rage or shame your client on social media. Aside from losing future business, you may find yourself in trouble with the law for using abusive or threatening language. As soon as any payment becomes due, send the client an invoice. This keeps the client from overlooking the payment they owe you. The sooner you invoice your client, the sooner they will pay up. By being late to bill, you are sending a message that it is not urgent and this sets a dangerous precedent.
Depending on the type work you are doing for the client, you can get your client to pay by slowing some aspects of the project or stopping work altogether. It may seem like a drastic measure but you can do it while still being respectful and friendly. All the same, it is not worth investing your time and effort in a client who does not value your working relationship. If this strategy does not bear fruits and all your polite reminders are ignored, then it may be time to do away with some of the niceties. Have your attorney send the client a letter on your behalf. This is usually enough to get you paid but if it fails, you might want to hire a collection agency or take the matter to a small claims court.
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