As a freelancer, you expect to be paid at the time you submit your invoice, or at least within your specified time frame. Not all clients have the same integrity as you, though, and once they have their product or service in hand, they may not be in a hurry to pay.
If late-paying clients are a regular problem for you, look into adding these 4 things as part of your regular business practices.
How to Stop the Late Payment Headache of Invoicing?
Ultimately, you are in control of how you want to run your business. Do you want to be flexible with payment terms and bring in more clients, some of whom may not be as reliable with payment? Or do you want to have stricter requirements and possibly lose out on some clients as a result?
The truth is that most of your potential clients who will balk at signing a contract or doing anything that legally places them in a position to pay you probably wouldn’t have paid anyway. Here are four basic, common practices that any reputable client will be perfectly fine with agreeing to for your services:
- Let the client know your terms clearly upfront. Like any business transaction, the client knows they will be expected to pay for the service. However, some freelancers get a little uncomfortable discussing payment.
Decide on your terms ahead of time so that when you communicate with a client, it’s a smooth transition. Have a system set up for freelancer payments so the client has multiple ways to pay.
- Use professional invoicing software. When your invoice is clearly designed and each service is itemized, the client has less of a reason to complain or ask for clarification.
Professional invoicing software lets you describe each item, list the quantity and price, and then formulates the total, with minimal work from you.
- Add late payment penalty terms to the invoice. Yes, you’re a nice person. But you’re also in business. Credit cards, mortgages, and auto loans all add penalties if you’re late paying them, and you can’t pay your bills when your clients don’t pay you.
Don’t feel bad adding a late penalty. However, if it’s the first time a client is late, consider giving them a friendly reminder before you do.
- Have an automated invoicing process. For a busy entrepreneur, invoicing is time-consuming. Creating the invoice, sending it, and following up on unpaid payments is time better spent in other ways.
An automated process is easy to implement if you invest in the software. With consistent use, it will more than pay for itself over time.
You Deserve to Be Paid for Your Work
Your service is necessary to fill a need for your target audience. As such, you are essential to them and they should expect to pay you accordingly. If you clearly stipulate your payment expectations and they agree to them and accept your finished work, they need to pay you timely.
These four processes can help you streamline your invoicing system to avoid the hassle of late-paying clients.