Banking

10 ways to make sure your clients pay you

Mishandled billing can spell disaster for your consultancy. To keep the cash flowing, follow these tips to make sure you get paid on time.

One of the biggest issues consultants face is getting paid. Most clients don't realize that you don't get paid if they don't pay. And because there are plenty of those types of clients out there, getting paid can be a challenge. Luckily, there are also plenty of ways to help ensure that you will get paid for the work you do. Let's take a look at 10 ways you can help yourself out.

Note: This article is also available as a PDF download.

1: Bill often

The last thing clients want is one huge bill at the end of the year. They would rather pay small chunks frequently. To that end, you might consider offering maintenance contracts where you give clients a certain number of hours per month for a set fee. They pay the fee, they get the work. But if they don't want such a deal, make sure you are not holding onto invoices and then sending them an envelope filled with bills that could have been paid in smaller, more manageable, increments. Clients will be much more willing to submit payment for smaller bills.

2: Bill quickly

As soon as you are done with your work, bill it. The work (and your success) will be fresh in the mind of the client. If they see a bill the day of or the day after, they will be much more likely to pay it (and pay it quickly) because the work you did is still clear in their mind. This also helps the client to know that you are on top of things. If you wait a week or two, you might have to refresh their memory. Or worse, they may take the later invoice as a sign that a later payment is an okay practice with your business.

3: Bill professionally

Do not send your bill in a handwritten note or as an email. Your bill should be on a professional letterhead and/or attached as a PDF to an email. The more professional your correspondence is, the more seriously you will be taken. The more seriously you are taken, the more likely it is that your clients will submit payment. If you are serious about what you do, you'll want to put some effort into branding your company across the board — and that includes billing.

4: Bill consistently

We see this all the time. People submit invoices for inconsistent amounts. One month you're charging X for a network drop and the next, you're charging Y for that same job. This will put clients in an awkward position of not knowing what to expect every time you do work for them. Make sure your pricing is consistent. And make sure your clients are aware of your pricing up front. If the client knows what they are getting into, they will have fewer objections when they see those bills.

5: Keep meticulous records

If you keep poor records, you will have trouble keeping track of who has paid, who has not paid, and what exactly each client has paid for. You should be using software (such as QuickBooks) to keep track of your records. With a sound solution, you will be able to quickly and professionally show records of what has happened with a client, should someone have a problem with a bill. If you're trying to juggle your books with a spreadsheet and a Word document (and a few post it notes), your consultancy life will be insane.

6: Do good work and do it efficiently

The better and more efficient your work is, the more likely you are to be paid. If your work is slow or ineffective, your clients will have trouble ponying up the cash to cover a job that should have taken less time. This also goes for doing effective work. If you constantly have to return to repair something you should have repaired the first time around, your clients are going to hesitate to pay (and they will be less than likely to refer other clients to you).

7: Accept all forms of payment

This should go without saying, but if you only take cash and checks, you might find you have some clients who won't hire you or won't pay you as quickly. Accepting credit cards (and even forms of payment like PayPal) will go a long way toward getting you paid faster. Of course, you'll take a fractional hit on your costs due to processing fees, but these fees are minimal when you're actually getting paid.

8: Require deposits for larger jobs

If you're about to take on a large job, you should require a percentage of the final cost for the job up front. Although this won't ensure the client makes good on the remainder, it will at least give you a portion of the payment before you start your work. This will also show your clients your dedication to the job. Also note that if you quote a client a certain price and that price changes at any point, it is your duty to report the change to the client as soon as possible.

9: Do not work with repeat offenders

We've all seen them — clients who either do not pay or pay very late. Why do you want to go through the hassle of having to hassle these clients to get them to pay? You don't want this headache, so don't take jobs from them. Yes, it is tempting — especially when you are first starting out or when times are hard. But those clients who don't pay (or pay very late) are doing nothing but taking valuable resources from you. Instead, work with reliable clients who will pay and pay in a timely fashion.

10: Have an attorney at the ready

Although we all hope it doesn't come to legal action, it can. There are those clients who simply refuse to pay. Sometimes, just a letter from an attorney is enough to light a fire under their seats. But when just a letter isn't enough, it might be time to send in the hounds. Once you have had to do this with a client, consider that client to fall under tip # 9.

Walking the line

Getting paid is a tricky business. There is a fine line between being professional and being a pest. Your clients will, for the most part, be in business to make money, not spend it. So when you have trouble collecting your fees, you must exercise care and concern toward future business. Always consider those clients as a long-term investment and not a one-time payment.

More suggestions?

What tactics and best practices have helped you get your clients to pay on time? Have you ever had a particularly ugly dispute over a bill? Share your advice and experiences below.

About

Jack Wallen is an award-winning writer for TechRepublic and Linux.com. He’s an avid promoter of open source and the voice of The Android Expert. For more news about Jack Wallen, visit his website getjackd.net.

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