By becoming a freelancer or small business owner, you pretty much agree to get a masterclass in bill collecting. Following up on invoices becomes a part time job.
I’ve had clients take months to pay for work they insisted was “urgent”, or refuse to pay because they outsourced the work from one of their clients and the client didn’t pay them, so they couldn’t pay me.
I’ve even had a client, who took years to settle a bill, die before paying it. That put a whole new spin on “take it to the grave” for me.
Nevertheless, I’ve grown from all of this and learned three key lessons that transformed my invoice payment times from months and years to just a few days.
1. Get the deposit up front
I’m sure you’ve heard this before, but you’re probably scared to do it because you don’t want to turn potential clients off by demanding money at the outset. Don’t be. A good client will understand that they need to have some skin in the game and show their commitment up front, and they will have a lot more respect for the process if they have money on the line. I also collect monthly retainers in advance so I’m not stuck doing a month’s work before I get paid for it.
2. Collect final payment before delivery
Yup, you heard me. Get your money before you finish that project, honey. In web design, I allow clients to fully review the final site built on my server, but in order to get it transferred to their server/domain and go live, they need to settle up. This way, the payment is tied to something they need, so they are much more motivated to pay quickly.
3. Forget Net 30 and Net 60, try Net 0
You contract my services and you know exactly what it will cost. You set a deadline and I delvier on time. I’ve done all the work you’ve asked for and you’re now benefiting from it. But I still need to wait 30 or 60 days to get paid for it? Nope. That payment is due right now.
Of course, there are a few expections. I give potential new clients 30 days to pay the invoice for their inital deposit. After 30 days, the invoice is no longer valid and any time reserved for them is unblocked. I also send my monthly retainer invoices 5-7 days in advance of the due date, just as a reminder. For everyone else, the payment deadline is the day you get it.
If you’re struggling to get paid when you do work for clients, try implementing these strategies and see how they change things. And be sure to let me know if they help!