A client is far more likely to pay you in a timely manner if they are used to receiving your invoice on a regular basis and on a specific date such as on the 1st of every month.
If your invoicing is all over the place, the client won’t get into the habit of paying you on a specific time frame.
Using an invoicing system simplifies your life
While you can use a free template downloaded from the internet or create your invoice, there is a far simpler way to get the job done, and that is by using an invoicing system. Not only will this make your life easier but you will have access to a lot of extra features.
There are invoicing systems such as “Freshbooks” that include features like creating estimates, tracking of multiple clients, email reminders for overdue payments. “Freshbooks” is a system offering these options and more. You can create profit and loss sheets, and there is a time management feature you can use.
Freshbooks is a great invoicing system, and it comes with a free trial which gives you a chance to try the software.
Being able to manage your time and track your earnings for each project is a beneficial function of an invoice system. You’ll need your hourly rate to be profitable for your business to thrive and these systems allow you to do that.
There is nothing worse than waiting and waiting to get paid for work you have already done. Eliminate this stress from your life and either pick up a free invoice template or start using an invoicing system and make late payments a thing of the past.
Faster payments in modern times
The business world is now part of the new age and getting paid no longer needs to be the long drawn out process it once was. Billing a client used to involve mailing them an invoice and patiently waiting for a check to arrive then depositing it in the bank and waiting, hoping it would clear. Well, NO MORE!
In this day and age, you can invoice a customer and get paid in minutes.
Making it as easy as possible for your customer to pay you dramatically increases the odds of receiving prompt payment. If you accept electronic checks, credit card payments or utilize a service like Paypal, you eliminate the need for the old “the checks in the mail” scenario. Your customers will appreciate having multiple options to pay you and may have a preferred method themselves that falls in line with the payment options you accept.
If your client has a set schedule for when they accept invoices such as on specific dates of the month, then work within those parameters and send your invoices on those dates which increases your chances of a fast payment.
More invoicing software choices
Invoicing solutions can be found online and invoicing software such as Freshbooks enable you to prepare and issue invoices in mere minutes. The client’s details can be kept in the program and used to quickly invoice them for any new projects or to invoice them on a recurring basis if that is required, all of which saves you a heck of a lot of time with your invoicing. There are many additional features with these software programs like being able to coordinate with colleagues on a project.
Getting an invoice ready for your customer will be much easier and faster if done with invoicing software. There are many to choose from, and it’s just a matter of picking the one with the right features to suit your needs.
Some of the invoicing software programs are paid services while others offer free trials. Regardless of the software, you decide to use, make sure it meets all your needs with the features you require.
Tracking your clients and finding out who owes you money and how much should be a quick, simple task within your business and is an important feature to look for when selecting an invoicing software to use.
Regular invoicing for regular income
Never feel like you are pestering a client by invoicing them. You are not a charity worker, and you have earned money owed to you so invoice regularly and consistently.
As a self-employed freelancer, you might need to invoice your customers every week. Establishing a routine like this helps to avoid forgetting to bill someone and more importantly it helps to get you paid faster and on a regular basis.
So you invoiced someone it’s been a few days, and you have received no response. Late payment doesn’t necessarily mean that your client’s intention is not to pay. They may have merely forgotten all about it and let it innocently slip their mind or lost your invoice among the pile of paperwork on their desk. If the payment due date is fast approaching, there is absolutely nothing wrong with sending them a friendly reminder. Drop them an email, text or give them a quick call and let them know their payment is required.
Having to do this manually and to do it for all of your clients can take up a lot of your valuable time that could be better spent elsewhere. This is where invoicing software helps enormously and proves invaluable by allowing you to put all of this on auto-pilot.
Some of the best businesses are built on recurring revenue. If you are entering into an extensive and ongoing project that could last quite some time, then it would be highly beneficial to send recurring invoices every month. Rather than you having to create and send a new invoice all the time, having a system of recurring billing in place will be far more convenient. Imagine how much easier things would be if you have your customer’s credit card charged automatically every month.
Anything that saves you time and allows you to concentrate on building your business instead of doing “busy work” is always beneficial.
Getting paid in advance
There are situations where you can be paid in advance, especially if it is a service that you are offering. The deposit or retainer as it is sometimes called could be a percentage of the overall fee such as 30% down with the remaining 70% to be paid on completion of the job. In industries where this is a normal and accepted way to do business if you have a potential client that is not willing to give you a retainer then you may expect to have problems down the road when the bill is due. This all goes back to not undervaluing your service and picking the right people to work with.
Late fees and discounts
Beneath everything else on the invoice you are creating, include details of any late fees you charge by setting a time limit and rate. E.g., “If not paid within ten days of the payment due date a 3% finance charge will go into effect” If payment is still not forthcoming don’t forget to keep follow up with them.
If your client just does not pay, you should be prepared for this and have a plan of action. Sending them a letter with the threat of legal action such as taking them to small claims court or telling them their outstanding bill will be placed in the hands of a collection agency are options. Do some research and know your rights and the procedures needed for this type of situation. Remember the adage, “forewarned is forearmed.”
On the other end of the spectrum, you can increase the likelihood of receiving a fast payment by offering an incentive that encourages the client to pay you. Doing this may also help you to avoid the need to chase people for the money they owe. An example of this may be a statement like ” If paid within seven days deduct 3% from the total amount due”.
It has been shown that being courteous and polite does, in fact, improve the odds of you being paid promptly by more than 5 percent. Using terms like “Please pay by” and “Thanks for your business” do work so use them. As my dear old Grandma used to say “manners cost nothing.”
You can take the personal touch a lot further with clients especially if you are building an ongoing working relationship with them by sending birthday cards or corporate gifts. It is a nice gesture and shows your appreciation for them giving you their business. As already mentioned having a good rapport with clients increases the chances of them making your invoice a priority.
Remove the middleman
When dealing with big business the person you are dealing with may not have anything to do with the billing side of the company. By sending your invoice to your client they may then, in turn, have to send it to the billing dept, so find out if you can send the invoice directly to that department yourself and eliminate a whole step between you getting your money.
On time delivery
By completing a project within the set time frame and showing your reliability, your client will be more inclined to pay you on time. Think about it, if you miss deadlines and don’t do what you promise then isn’t the client going to feel the same way when it comes to paying you?
Reputation is everything
Protect and build your reputation for providing excellent service or products and doing phenomenal work within set time frames. This will enable you to procure high caliber clients that are far more likely to pay their bills on time.
Just as important as your reputation is the reputation of the businesses and people you are thinking of taking on as your clients. Check them out first, look on the BBB, ask around about whether they are known to pay on time and pay in full. If things show up that make them look a little shady, then you may decide it’s not worth your time getting involved with them.
Put it in writing
Never work for a client without having a signed contract. Within the contract, the payment terms will be written along with Non-Disclosures and whatever else both parties feel need to be added for their protection. It will state the invoicing procedure and the course of action to be taken if a bill is not paid. This legally binding document will improve the likelihood of you being paid promptly and will prove beneficial if you need to take legal action to receive payment.
So, making sure you get paid on time doesn’t need to be an ordeal. Go through the steps outlined here, make good choices when it comes to deciding who to work for and remove the stress of getting paid from your life.
Be professional at ALL times
You always want to portray a professional image and using the correct procedure for invoicing is a large part of that. You want to have the appropriate policies in place, methods of payment established, invoice filing system set up and having the ideal invoicing software will help you achieve all of this. So implement everything you learn here, and you will impress your clients.
Establishing your invoicing policies
Of course in a perfect world, you complete a project for a client who pays you immediately, and you are both happy. Life isn’t always so straightforward though, and sometimes a client does not pay on time. As an entrepreneur, you will occasionally come up against a client who doesn’t pay or only pays a portion of what he owes. To reduce the risk of this happening you’ll want to have policies in place that cover payments.
When establishing your policies include the following:
- Method of payment – check, credit cards, Paypal?
- Do you need a down payment and if so how much?
- Will you start the job before any payments?
- How many days will you wait before the customer pays?
- Will there be fees for late payments?
- Will you submit the final work before or after making payments?
These policies are not set in concrete but are a good guide. All clients are different, and you may have to adapt your policies sometimes to accommodate their needs as well as your own.
Be open with your policies
Go through your policies with your clients, so they know what is expected of them especially regarding price and payment. Let them know immediately if changes to the policy are needed to avoid surprising them.
If a client is caught unaware of something within your policies that you have not told them about then the chances of you getting paid late, or not at all will increase. It is imperative for you as an entrepreneur to establish trust with your customers and to lay everything out on the table about your policies is going to accomplish this. Business relationships like these lead to more work in the future from current customers and recommendations from those happy clients.
Think about your pricing
Rule number one never undersell yourself. Find out the going rate for others in your field and stay within that range. Never offer to work cheap just to get clients it never pays in the long run. Undervaluing the service or product you provide will attract the wrong sort of client who may very well vanish without a trace before paying you in the end anyway. Decide if you are going to bill by the hour or do a project for a fixed price. Let the customer know exactly how you intend to charge them for your service.
Being open and honest from the start, so everybody involved knows exactly what is expected of them is the route to a mutually satisfying business relationship. As an entrepreneur, you are selling yourself because people like to work with like-minded individuals who they have a good rapport with.
Services and charges
Your invoice must include the services you have provided and the amount that is being charged for those services. You want to make things as clear as possible for the customer, so they can see precisely what it is they are being billed for. It will make things easier for both you and the client to keep track of payments made, payments due and projects completed or not yet finished.
Many freelancers expect payments in advance whether in part or in full before they even start work for a customer. The invoice should show for what portion of the job the payment covers.
Let them know payment is due
Entrepreneurs often fail to inform the client that their payment is due and therefore do not get paid. As mentioned earlier you must include a payment due date on your invoice to lower the risk of late payments, and you must do this for every single client whether they usually pay on time or not.
As you have discovered in this article, it is a possibility that your invoice may be passed through many hands before reaching the person who issues your payment. Having your full contact information will make it easy for that person to know where the invoice is coming from and to contact you if they have any questions so don’t leave anything out. Not providing the correct contact information may slow down the whole process so be accurate and pay close attention to the details of your invoice.
Invoice record keeping
As with any saved data always do a backup. I repeat, ALWAYS BACK UP YOUR DATA..!
Losing your invoice records would be an absolute nightmare. You wouldn’t know who to bill, who has paid, who hasn’t and that’s a headache you do not want.
Get into the habit of backing up your invoice data regularly. However, you choose to do it whether it be by photocopying them, scanning and saving them to a different computer or onto a USB just be sure you do it. Along with the actual invoice keep any related and relevant information such as letters, emails, and any other communication as it may save your skin at some point.
Always follow up
As we have already established not every customer gets back to you about your invoice promptly so follow up with them. Contact them, ask them nicely if payment is on its way. Remember to be courteous while following up because you don’t yet know the reason why they haven’t paid you.
Invoicing issues with customers is something you have to respond to systematically. Provide fast responses to their questions, address their concerns quickly and efficiently, and you will appear like the consummate professional you are. Being professional, honest and reliable will lead to them offering you many more jobs in the future and recommending you to their associates and friends.