Time is Money
Have you ever been in the situation where you’ve completed a piece of work, and the client is taking such a long time to pay? Yep, as small businesses we’ve all been there. But why does this happen at all? Why should the topic of payment be a difficult conversation to have? After all, you’ve given your time and resources to provide a service for someone else. As such, you deserve to be paid in full, without any argument or uncertainty. Here we’ve outlined the strategies we follow to ensure we get paid earlier.
No agreement, no work!
If you’re clear about how much your service costs and what you expect to be paid from the start, it will make the whole process a lot smoother. Don’t leave it until after you’ve done the work! In fact, we wouldn’t even start any work without making a clear agreement on the value and timing of the work, and when payment is expected. If nothing else, having this already agreed will help settle your mind when doing the task.
We often find it useful to use a template agreement to ensure that all information is clear and agreed upon prior to commencing work. A template can also show the schedule of services and the payment timetables. Plus, it means you don’t forget any details when all the business talk is happening.
Although it’s not always an option, if you can get paid before doing the work, go for it! It’s then 100% clear the customer isn’t going to mess you around. It is rare for people to accept this though, and so we recommend asking for a deposit before commencing work.
Make payments easy.
Invoicing. It will need to happen at some point. Help yourself by doing this early – the sooner the better. Make sure your invoice has all the relevant details, including the due date. Making it easy for the customer to pay will increase the speed with which it happens. Ensure the invoice includes details of exactly how to pay and that this information is clear and concise.
It’s easy to put off a task just because it looks hard and you don’t know where to start. I know I’ve done it before. Consider using online payments to reduce this. Accounting packages make it simple to link invoices to payment providers including PayPal and Stripe. Not only is this better for you, it can simplify the entire payment process for the customer too.
Don’t provide the opportunity to forget.
Don’t be afraid to chase for what you’re owed. You shouldn’t feel bad or pushy about it. Nowadays, everyone has a lot on their plates, and it’s easy for things to slip the net. By sending reminders, you’re simply jogging the memory. Use them to remind your client of the task they need to complete in return for your time and effort. We’ve found that sending reminders before or on the due date both work effectively. More often than not, they will both get the result we want – payment on time!
Our final strategy is a very important one which we follow closely. Do not compound your loss. Make it clear that you will not be doing any further work until you have been paid. And stick to this. Chances are, the customer came to you because they cannot do what you are offering. They need you to complete the work in full, and so they won’t hang around in preventing this.
Remember: your service is valuable. The client chose you to deliver that service and as such should pay as agreed. Make it easy to do, and don’t be afraid to chase if you need to.