Getting Payments From Your Clients On Time

I subscribe to a daily small business tip from Big Ideas for Small Business and the Idea of the Day from March 3 really struck me. Independent contractors have a hard time getting payment for their work. It’s so bad that 75% of these individuals aren’t getting payment on time. About 16% of them have to wait more than two months to get paid. And a whopping 59% of independent contractors have open invoices of more than $50,000! I don’t want you to be like these individuals. Here are some tips on getting payments from your clients on time.

Tip #1 On Getting Payments From Your Clients On Time: Develop A Payment Schedule Before Work Starts

The first tip on getting payments from your clients on time is to create a payment schedule before you do any work for the client. This way both of you know when and how you will get payment for your work.

If you want to split up payments around project milestones that’s a good start. Meaning you will get a portion of the total payment when you deliver a particular part of the project. This is a payment schedule many in Software Development and Web Development industries follow. I also know some in the trades who follow this schedule too. It works well because not only do you get payment, but your client sees progress.

Now, if your client decides to not pay after you deliver a portion of the code or you complete the framing of the house you can stop working until the money arrives. This way you aren’t working for free. And no one wants to work for free.

Tip #2 On Getting Payments From Your Clients On Time: Choose Convenient Payment Options

The second tip on getting payments from your clients on time is to choose convenient payment options. When you limit payment options your clients may be less likely to pay. Especially if they don’t use or trust the method you like.

My grandfather was a mechanic and he only like to deal with cash. He would accept checks on occasion but he only would if he knew the customer. This hurt his business because he would get customer who wanted to use a credit card to pay him and my grandfather refused. Partly because he didn’t use credit cards in his personal life, and he didn’t want to pay the extra fees to accept them.

In today’s business landscape you can’t have that mentality. Customers want to pay multiple ways, from credit cards to even their phone. That’s why you need to have multiple convenient payment options. On my online store I accept debit cards, credit cards, PayPal, and even Affirm. That way I have the ability to service my customers no matter how they want to pay.

Finally, you can take payments on the go using a card reader or your phone. Thus, you don’t have to wait to get paid.

Final Tip: Send Invoices Promptly

The final tip on getting payments from your clients on time is to send invoices promptly. Businesses have several ways to process invoices. Some process them only once a week while other process them everyday. So if you miss their cutoff you will have to wait longer for payment.

Also, don’t procrastinate sending out an invoice. To make this task easier use a bookkeeping software like Quickbooks or Freshbooks. These make invoicing easy.

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