Here are 10 Ways To Get Paid Faster.
1. Review Your Invoices
Do your invoices have your contact information including a phone number? Is the amount due, date due, invoice number/reference and how to pay easy to find?
Make it super simple to get paid so all clients need to do is transfer the money or click a button to make a credit card payment. Software such as Wave has credit card payment integrated so it can be the work of moments for a client to pay you.
Ask a friend to look at your invoices. If they can’t find within 3 seconds the details needed to pay you, and contact you, you need to change that fast. We use Wave for invoices and you can download a free template invoice here.
2. Review Your Payment Terms
What are your payment terms?
Payment terms are how long clients have between the date of your invoice and the date they need to pay you. Have the shortest term you can, while being aware of the norms in your industry. If you aren’t sure, ask others who do similar work.
Payment terms can vary from ‘upon receipt’ (pay me now) to 90 days or even 120 days (!). In some industries you get paid when they do a BACS or CHAPS run (electronic payment systems) regardless of what it says on your invoice. Doing your research can help reduce stress so it’s worthwhile spending a bit of time.
3. How Do You Chase Payments?
Do you hate sending reminders? Does it feel pushy, impersonal, embarrassing?
Politely send a reminder before your invoice is due and politely call after your invoice is due. If your client says they have cash flow problems and gives you a date they will pay, you can negotiate: honesty and communication go a long way.
Every business needs a debt management procedure, also known as What You Will Do When A Client Doesn’t Pay. It’s professional to have one, it makes it easier to feel professional, and it makes it easier to get claim a bad debt in your accounts if worst comes to worst and you never get the money.
4. Do A Client Review
Which of your clients pays quickly and in full?
Who always pays late and wastes your time and energy chasing them? Be honest and review your former and current clients who don’t pay on time to how much they cost you in time, energy, money and emotion.
Seriously consider firing the worse offenders. It can take courage when you have bills to pay but the time and energy saved is time and energy for new clients who pay well and on time.
5. Consider A Payment Incentive
When a client pays me they receive a chocolate brownie in the post. It’s a reward and incentive for taking control of their money and accounts management.
Freelancer Emma Cossey offers a discount for payment on receipt and saw her pay on time rate go up by 60%. Another option is offering a discount for paying in full in advance: I don’t publicise it but I offer this for my higher priced packages (tax return, sole trader, limited company).
6. Who Is Your Ideal Client?
When creating the profile of your ideal client, include being paid well, in full, and on time.
It’s easy to forget getting paid when designing your business. Hopefully you’ll never have to chase an invoice to a client who doesn’t want to pay you!
7. Do You Know What To Do If A Client Doesn’t Pay?
If a client is continuing to not pay, do you know where to go for help and what you can do legally?
There is a lot of information on freelancing websites and ask in networking groups. It’s common so it may feel embarrassing but most people have been through it.
A debt recovery business takes a fee in return for chasing payment. You can also take the client to the Small Claims Court.
8. Do An Industry Review
Some industries are notorious for paying late, not paying, or taking so much time to pay that you struggle to pay the mortgage.
Identify the industries where it’s common to have poor payment practices and the Prompt Payment Code unfortunately hasn’t changed the situation very much. Put a credit control procedure in place (a ‘getting paid’ system) and be serious about your cash flow so the impact of not getting paid on time is lessened.
Get help from others who are experienced so you feel supported and don’t give in from being pressured.
9. Do You Have Payment Friendly Terms Of Business?
Do you have terms of business in place to protect you if a client doesn’t pay?
Include late payment fees and reserve the right to charge interest according to the appropriate legal limits. Do your terms state the contract is under UK law and have you invoiced correctly (sole trader, partnership or limited company) in case you need to take the client to the Small Claims Court.
10. Do You Know How To Claim For A Bad Debt?
You need to assume you’ve been paid when you do your accounts and pay tax on the income.
This can smart a bit if the client hasn’t paid you! The good news is if you have the evidence to prove you have professionally chased the debt and there is little hope of being paid, then you can get the money ‘back’ through your accounts.
Contact me if you want to chat about how you can claim for a bad debt through your expenses.
Getting paid on time and in full is our due as businesses and freelancers for giving a high value service.
Which ways do you use to get paid faster?