Owning your own business has some truly amazing benefits. You can make your own hours. You can take on the projects that you want, and turn down the ones you don’t. You can work on your terms, and do it your way.
Sending an invoice, and hitting the refresh button on your email over and over again waiting for the notification that your client has paid– like your inbox is an awful freelancing slot machine that mostly dispenses spam. Without the other regular recurring revenue, overdue invoices are especially painful for small teams and solopreneurs.
There is a surprisingly easy and simple solution to keep the late and non-payers at bay. It’s so remarkably simple I’m shocked not every does it. Ready? Here we go:
A Simple Fix
To avoid late and non-payers every single time, collect payment upfront. Collect payment before work starts. If the client doesn’t want to pay, the work doesn’t begin. It really is as easy as that.
Ok, maybe I’m over simplifying it just a little bit. But it really can be done. I have worked in accounts receivable for years, and make a living reaching out to clients who haven’t paid their invoices. The #1 thing I tell my clients is to reconsider their process when it comes to collecting payment from clients to prevent the problem before it starts.
The majority of clients I work with charge hourly rates. When the work is complete they send an invoice based on the number of hours the project took to complete. Then they wait. Hoping the invoice is paid in a timely manner. Does that sound familiar?
The first step in collecting upfront payment is to make your expectations clear to your clients before the work even begins. Try this with your next new client. When you are approached by your next client set up your payment expectations right off the bat. Qualify your client to make sure that they are a great fit for you and your business.
If your client understands how you work and what you need from them, you’ll avoid confrontation down the line. You’ll in turn have an understanding of their expectations of you. All of this helps you to find the clients you WANT to work with, and avoid the potential nightmare clients.
Take Time off the Table
Once your expectations are clear to the client, it’s time to talk about rates. Instead of charging hourly rates, try quoting your client fixed rate prices. You are a professional and know the value of your work. Be upfront about your rates, and quote your client prices based on the entire project discussed. Transparency on your pricing will avoid issues down the line when it comes to rates and scope. And if the client knows the project will cost a specific amount, requesting upfront payment will be that much easier.
Change Billing Practices & Get the Clients you want
Changing the way you look at your billing practices can end past due invoices. Qualifying your clients not only helps you find clients you WANT to work with, but it makes your payment expectations clear before you even begin working. Charging upfront fixed prices ensures your rates are clear and avoids non-payment due to rate conflicts.
Finally, ask for payment upfront. Every Time. These simple changes ensure you are working with clients you want to work with. And will be the end to unpaid invoices.