Getting paid is one of the hardest things to do as a business person.You spend months chasing your money after you give your clients a valuable service.Many business-to-business invoices get put on the back burner because unlike credit card companies who will immediately report the late payers to a credit agency, the smaller business will not do this.You will save a lot of time and trouble if you have incentives and protections in place.
Step 1: When your services are retained, make sure your payment policies are clear.
Regardless of whether your business is approved by a client meeting or you submit a bid, your client must agree to your estimated price for the work they want done.You are ahead of the game if your payment policies are clearly stated on your contract, bid, or whatever document you use to bind the contract.
Step 2: Credit card payment is encouraged if you accept all forms of payment.
Even if the client doesn't have the funds at the moment, you have a better chance of being paid in a timely fashion.You can find the best terms for a merchant account.
Step 3: A deposit is required in advance.
Unless you have a long-standing relationship with the client, get a deposit in advance and then collect another portion midway through the job.30% in advance and 30% upon completion of some agreed-upon benchmark, such as delivery of comps, if you are an artist.Upon completion, there will be a balance."Completion" means on the day you deliver the work.
Step 4: If they pay within 30 days, you can offer a discount.
If an invoice is not paid on time, insert a clause with a penalty amount.
Step 5: When collecting payments, start out being friendly.
If a customer doesn't pay on time, you should escalate the situation.It's important to get paid but not jeopardize your relationship with the customer.
Step 6: If the customer makes an offer, accept it.
A lot of times a client will ask, "Do you need a check now?"The business owner said, "No, that's okay, we'll get it at the end."Don't do this!The customer should be allowed to pay up front.
Step 7: Before you deliver the final product, make arrangements for payment.
They will need to pay you before you finish the job.Many business owners think this is a low-rent practice, but it is not.It is not low-rent and does not tell your clients that you can't afford to wait.It shows them that you are a professional who is used to being paid on time.Say something like, "Hey, Mr. Jones, I have your job ready to go."If I swing by around 3 PM, can you have a check ready for me?The balance is due.
Step 8: You have to follow every day until you get your money.
After your payment was due, this should start.You should try to get paid as soon as possible.Sometimes, you have a lapse in judgement, or you are lulled into a sense of security by a client you've had no problems with in the past.Your client will attempt to exploit it once they realize your payment policies are not strict.You need to remember that every minute you are working to get paid is a minute that you're not working on a new job which still needs to be finished on time.
Step 9: You should apply your payment policies to all of your customers.
Don't give special treatment to friends or family.They often attempt to take advantage of your relationship if you treat them with less trust than a stranger.If the client hasn't paid by the due date, call him and ask for the money.If you're put off until the next day, call again the very next morning.
Step 10: You can contact the credit agencies.
If you fail to follow it up, you won't be taken seriously.If the payment is more than 30 days late, contact the credit agencies and report them.If you don't get their payment before the deadline, you will have to report it to the credit agencies, which will damage their credit.It's an incentive to pay.
Step 11: Paper invoices should be stopped.
Hard copies in the mail slows down the process.Send invoices via email or invest in an automated billing system that will email invoices for you and continue to send reminders to the client until the invoice is paid.The client can make payments online.
Step 12: Ask your lawyers for a retainer.
As you complete the work, you will pay this amount upfront.You ask the client to replenish when the amount is used up.
Step 13: A recurring billing system is needed.
You can take what you are owed on the same day each month if you provide a credit card or bank account number.
Step 14: Someone will be following up on your accounts receivable.
It makes payment seem more urgent if you can afford it.This way your relationship with the client is not jeopardized by calls about money, even if it's your spouse who makes the calls.
Step 15: If you don't get paid, report them to a collection agency.
If you want to try to collect it, the collector will pay up to 50% of what you're owed.