This week's message is for IT people who moonlight. You're not full-time consultants, but you sneak in several freelance gigs a year. You set up a LAN here, design a Web site there, and you wind up with a handful of 1099s at the end of the year.
The big question for a freelancer is: How soon are you getting paid? If you have a contract with a huge company that states you'll be paid in 30 to 90 days, you shouldn't expect a check before day 91. But if you're freelancing without a contract, here's some advice that can help you put money in your pocket sooner instead of later.
The "I have my invoice with me" trick
Many years ago, one of my mentors, Professor John J. Murphy, taught me two valuable rules of consulting. The first rule of consulting is:"Be prepared to invoice at any time."
This trick works well with one-time-only gigs. Say you've been hired to do a job that only requires one visit, such as installing and configuring a machine or two. Don't give the client a chance to forget about you. As soon as you finish the work, whip out your invoice (which you have conveniently printed before leaving your home or office) and present it to the client.
The alternative, of course, is saying something like, "Okay, I'll send you my invoice." But your bill will get paid a lot faster if you present it in person instead of waiting and mailing it.
There's another good reason to carry your invoice with you on disk when you visit a client site. If the plug gets pulled on your project, the client may ask you to "submit your invoice for billable work completed to date." Whip out your disk and say, "I happen to have that information right here." Most clients will let you borrow a printer to print your invoice before you leave.
The “2% 10” trick
Thesecond rule of consulting is: "To get paid sooner, offer ‘2% 10’ as one of your terms." Full-time consultants bristle at the thought of discounting their services, even a measly two percent. But for part-time freelancers, the "2% 10" trick can often put a check in your hand before you leave the client's office. I've given away two percent of my invoice amount several dozen times in exchange for the privilege of having a check written to me on the spot.
For medium- to long-term projects, I usually bill my clients once a month. Recently, I presented my first invoice to a new consulting client, and I included in the invoice this item:
Terms: 2% 10, net 30
To accounts receivable and accounts payable types, that's shorthand for "take two percent off the invoice amount if you pay me within 10 days; otherwise, the whole amount is due within 30 days."
This client acted like he'd never seen this kind of invoice before. "What's this mean?" he asked. I told him, and he said, "Would you like a check today?"
I said, "Why yes, that would be nice!"
And so was born a great consultant-client relationship. This tightwad couldn't resist a deal, and he got what he wanted—he saved a few bucks. And I got what I wanted—paid on the spot!
What's your favorite trick for getting paid in a timely manner? Post your comments below or follow this link to drop me a note. Subscribe to the View from Ground Zero TechMail, and you'll get a bonus of my picks for the best Web stuff—exclusively for TechMail subscribers.