Collecting payments is one of the biggest difficulties faced by freelancers across the world. Freelancers might be subject matter experts in development, design or copywriting, but cash management is a skill of its own.
On the face of it, invoicing seems like a pretty simple deal. Once you’ve delivered work all you have to do is create a document listing your deliverables and their associated costs. Which is where invoices come in.
The truth of the matter is, it really isn’t that simple. Creating an invoice is one thing, but other factors come into play that makes this matter as difficult as it is.
There are some strategies freelancers can incorporate in their dealings to make sure they get paid on time. Let’s discuss some of these strategies in detail.
Send invoices on time
This might seem like a no-brainer, but you’d be surprised to find that many freelancers simply do not send their invoices on time. This can be caused by a number of factors, one of which is that creating an invoice can be a cumbersome process.
No one wants to open Excel and do all of the necessary formatting and data input. Here’s a handy tip: if you’re using Excel to create invoices from scratch, you’re simply doing it wrong. There are many great options these days to create invoices in a matter of minutes. The well-known accounting software company Freshbooks, a comprehensive accounting suite and offers a variety of free invoice templates for freelancers. These are well-designed invoice templates from a company that knows a thing or two about professional invoicing.
A great benefit of sending invoices right after you’ve delivered work to clients is that the value of the work you’ve done is still fresh in the client’s mind, and they’re much more likely to pay you on time as a result.
Communicate non-negotiable due dates ahead of time
Most freelancers are ill-prepared for financial dealings with clients, communication being one of the weakest areas. The next time your client asks for some work done, have an open and transparent conversation about payment with them.
Avoid common phrases like “payment 15 days after the invoice is received”. Instead, give them a clear cut date on which the invoice must be paid. This leaves little room for misinterpretation on the client’s part and ensures they know exactly when to pay you.
Of course, before giving them a payment date you have to make them agree to it. You can even go as far as setting late payment penalties in case the client doesn’t pay you on time.
Send the invoice to the one who pays the bill
Please note that this tip doesn’t apply if your client is the sole proprietor. However, many freelancers do provide services to structured businesses. If your initial point of contact for a business is say, the project manager, you can’t really expect him to pay your invoice. Not everyone has the time for it.
What you need to do is to find the right contact when billing your clients. Ask your point of contact for the person responsible for managing accounts of the business, as they’re more suitable for handling your invoices. Also, make sure that the person you send invoices to is authorized to make payments. Sending invoices directly to the person who’s responsible for paying them ensures that there are no unnecessary delays caused by people too busy to check their inboxes.
Send friendly reminders to pay invoices
In case you don’t get an invoice paid on time, always assume that the client simply forgot to do it. Remember, your client is giving you business so it’s best to assume ‘the best’ of your client, unless proven otherwise.
So if they haven’t paid your invoice, send them a friendly reminder. A tip here would be to keep the reminder short, typically one or two sentences are enough for the job.
Accept online invoice payments for convenience
Today’s economy is becoming increasingly reliant on digital solutions. And you might not realize it, but many businesses prefer paying online. The reason behind this is pretty simple. Online payment platforms allow you to easily send, receive and track payments, and can be accessed from virtually anywhere.
There are a few considerations to be made before you choose an online payment platform. You need to make sure that it offers multiple payment methods so your client has absolutely no excuse on delaying payments. The ability to accept deposits and send recurring invoices is also a valuable feature to have.
Make invoices easy to pay on mobile
Expanding on our point for online payments, make sure your chosen payment platform supports mobile payments. Now this isn’t an absolutely necessary option to have, but it will go a long way in ensuring you get paid on time.
The reason behind this is simple: more than half of all emails are first opened on a mobile device. And if your payment platform supports mobile payments, all it takes is a simple “Pay here” button similar to Amazon’s “Buy in one click”, to get the job done.
Ask for a deposit before starting work
Many freelancers assume that it’s a bad practice to ask for upfront payment. Whereas in fact, it can be a great way to build a trusting relationship with the client. Simply request them to pay upfront a fraction of the total payment so that you can start working.
This serves two purposes: one, it keeps the client invested in what you’re doing and two, you’ll be obliged to deliver quality work on time since you’re ‘locked in’.
Late payments are a source of frustration for many freelancers, and there is no perfect cure to get rid of them. As a freelancer, you have to try your best to ensure that there aren’t any loose ends on your part that might lead to clients paying late.