By Princess Jones
When you’re first starting your business, you may have thought that the hardest part would be finding clients to give you work. Well, finding work certainly is a process, but you’ll often find that getting paid is the real work.
But getting your invoices paid has to be a priority for you if you want your business’ cash flow to stay healthy. You may think this means chasing checks but there are some small things you can do first to make sure your invoices get paid.
1. Have Clear Payment Terms
Start off on the right foot with your relationships with clients by making payment terms clear up front. Make it a standard practice to have new clients acknowledge your terms in writing. Put your payment terms in your contracts. You can accomplish that by emailing it to them and asking them to reply acknowledging their understanding. Don’t just let them read it and sign it. Go over it with them point by point while in person or over the phone to ensure it’s being understood.
2. Invoice Quickly
Once you’ve got something to invoice for, do it as quickly as possible. Sure, you’d rather be working on the next thing, but if you don’t take care of your invoicing, you’ll never get paid. The clock starts ticking as soon as you send the invoice so don’t waste any time. And if you don’t have the time or the inclination to stay on top of your invoicing, make sure you hire someone who does.
3. Send Invoices Directly to the Person Paying Them
This may seem a little obvious, but it’s often overlooked when trying to get your invoices paid faster. Depending on the size and structure of a company, the person cutting the checks might not even work on the same side of the world as the person who runs the project. Sure, it’s their job to get the invoice to the right place. But you’re better off finding out the direct information for accounts payable and sending them a copy, too. You can even hire the services of accounts payable outsourcing companies.
4. Charge Up Front
The best way to prevent being paid late is to make sure you get paid before you even get started. Write your contracts so that all work is triggered by payments. For example, instead of saying you’ll have the work done on the 15th, say you’ll have the work done 15 days after you receive payment. With bigger jobs or certain types of work, you might not be able to get paid completely up front. In those cases, try to get half or a third before work starts. The more you can get initially, the less you might have to chase later.
5. Make Paying on Time Cheaper
In a perfect world, clients would pay your invoices as soon as they see them because that’s what they’ve agreed to do. But in the real world, you sometimes have to make it worth it for them. Consider adding late fees for payments outside of the acceptable window. On the other hand, consider offering a discount for pre-paid invoices to entice clients to pay upfront.
Chasing invoices can actually be harder than the day-to-day running of the business, so follow these tips to get your invoices paid on time, every time.