Being a small business owner has many benefits. You can choose who you work with, how you work, when you work, and your income potential is so much better than if you were working as an employee for someone else. However, there are some drawbacks too. You may wind up working more hours than when you were an employee, you are responsible for ALL the things, and there may not be a bi-weekly paycheck directly deposited into your bank account.
It can be stressful, financially difficult, and even painful when clients don’t pay on time. Having clients pay you starts well before you send your invoice. For best results, it’s essential to set clear expectations of the scope of work you will provide, when and how often you will invoice, the payment terms, and your preferred way of payment.
7 Tips to Increase the Likelihood of Getting Paid in a Timely Manner
Here are some best practices for invoicing your clients to help you get paid on time:
1. Include ALL the necessary details:
Make sure your invoices include the Amount Due and a Due Date, and ensure they clearly state the services or goods provided. If your invoice isn’t clear, your clients are going to be wary of paying it.
2. Make it easy for your clients to pay you.
Don’t make your customers jump through hoops to pay you. Whether it is a link, check, or through a secure portal on your website, ensure that your invoice clearly states how you’d prefer to be paid and that it’s quick and easy to do so.
3. Be timely in invoicing.
Clients are much more likely to pay when the invoice comes within a week of the completion of the work. Not sending an invoice until weeks or months later signals to a client that they don’t have to pay you quickly. They may feel that you don’t value your time and efforts, so they don’t need to, either. Schedule time in your week – every week (or month) – to invoice.
4. Completely avoid sending invoices.
Asking for payment in full prior to starting the work or requiring automatic payments eliminates the need for invoicing altogether! If these aren’t viable options, break up the invoicing into milestones, and do not continue onto the next phase until the invoice for the completed phase is paid.
5. Talk to your clients.
If you have clients that are consistently slow in paying, it may be time to have a meeting with them. In that meeting, review your service agreement and payment terms. You may need to make an adjustment to the scope of work, move to automatic payments, or find another win-win action plan for moving forward.
6. Make the hard decision.
If, after all the above steps, you are still chasing a client for payment, it may be time to end the relationship. It can be scary to let a client go, but doing work and not getting paid for it in a timely manner isn’t fair to you or your business. It is better to let the client go, freeing up time and energy for a client who values your time and expertise.
7. Hire a bookkeeper.
As a business owner, finding the time to invoice clients on time or set up a system to ensure you get paid on time every time can be a struggle. By hiring a bookkeeper to handle your invoicing for you, you can take this task off your list and get back to doing what you do best – serving your clients.
If you need help coming up with a system for invoicing clients and getting paid on time, I can help. Get in touch today!