Raise your hand if you rushed to have your invoices sent out before the Christmas break only to realize that January is quickly coming to an end and you still haven't seen payments for those same invoices...
If you could see me right now you would see me with my hand raised. And hey, if you're in the same boat, let's high five!
Now that we have some more positive vibes flowing lets collectively look at some proven strategies for getting our invoices paid on time.
1. Include a due date on invoices
Yes, this may seem like a simple strategy, but I've done enough side-hustle work for friends, family and returning clients to know the importance of including one. As good as it is to have a stable list of loyal clients, it's better if they actually pay for your services on time. So, let's do away with the
"IOU"s or the "I'll catch ya next time"s and provide a day for when we can expect payment. In doing so, our invoices will carry more weight - just like those daunting utility bills!
2. Create a late payment policy
You and I are both not naive enough to think that a due date is going to solve all of our client's inabilities to pay on time. There are some people in life that don't mind ignoring a due date (the audacity!) until they actually feel the pain of missing it.
Each person's approach to creating a late payment policy will be unique to their own business needs. Maybe for your business a flat fee of $25 works. For me, I think having a percentage of the overall contract value to represent a late fee works best. Whatever the case may be, it's important for us to be up-front about our late payment policies before we engage in any work for a client. As bad as it is to not get paid on time, it's equally bad if we lose a client by surprising them with additional costs that they weren't aware they could incur. As long as we are upfront, then everyone knows the consequences if payments are late.
3. Bill jobs separately
A common tendency in freelance work is for clients to add additional items to a project, which can delay the anticipated completion date. In the past, I have made the mistake of adding these additional items into the contract and providing my clients with the invoice once it had all been completed. As I have become more experienced with these ad-ons, the more I have come to realize that this can often lead to issues of delayed payment.
With this in mind, I have opted to create contracts that provide a more detailed scope of work, while additional items will be billed as separate jobs or projects. This way I can ensure that I will be paid for the project that was originally agreed upon and this will make the cash flow management of my business much easier to anticipate.
So, by all means, take on as much additional work as you can, just make sure you bill each of those ad-ons in a separate manner.
Care to share your advice for getting invoices paid on time? Comment below! We'd love to share them with all of our fellow freelancers!
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