Relationships with clients must be nurtured carefully so that the clients come back to you for more work and refer you to others for similar projects. The success of the services you deliver is often measured by the emotional connection the client has developed with you.
Unfortunately, the client-business owner relationship can be damaged, sometimes irreparably, by arguments over payments. A previously respectful and friendly relationship can be marred by late payments and differing expectations.
It is recommended to put a system in place which prevents these issues and gets clients in the habit of paying on time. We offer five tips for avoiding the necessity of chasing after late payments and possibly jeopardizing your friendly relationship with the client as a result:
- Charge in advance – Send an invoice on the day you start the work. If the client pays right away, that’s awesome. But even if not, you have already started the conversation about payment and the client will not be “surprised” later on with the bill. Also consider asking for a deposit before starting the project and collecting payment for extras like travel expenses upfront. Charging in advance is a great insurance policy, especially with a new client who is still an unknown quantity.
- Offer multiple payment options – When you limit your client to one method of payment, you make it harder on him to pay. Offering multiple ways to pay allows him to choose the one that works best for him at that moment in time. Your invoicing system should allow payment by check, bank transfer, credit card and PayPal. Encourage clients to pay electronically to avoid awkward conversations about bounced checks.
- Make your terms clear and stick to them – Have the client sign a contract before the project begins, setting out the terms very clearly. It’s best to have a lawyer take a look at your contracts, to ensure everything is legal and unambiguous. Whatever your terms are, make sure you stick to them and don’t allow certain clients to become exceptions. That opens up a whole can of worms and lets them get out of payments or be consistently late. If you let your clients know you take your terms seriously, they won’t attempt to take advantage of you.
- Be consistent – Send your invoices on the same day of each month so your clients learn to expect their arrival. Don’t mail them one month and email them the next. Choose a system that works for you and stick to it so that you look professional and don’t unsettle the clients. Reminders should also be sent in a consistent manner. If you send the invoice 21 days in advance of its due date, send a reminder the day before the due date and another two days later if payment is not received. Clients will learn that unpaid invoices will not go ignored and will make every effort to pay them on time.
- Use cloud-based software – Cloud-based software makes the invoicing process smoother both for the business owner and for the client. It will help you keep clients updated via email on invoices due and their payment history. Invoices won’t get lost in the mail or get stuck in a huge pile on someone’s desk. Instead, reminders will keep appearing in the client’s inbox, until payment is made. The software should also be integrated with online payment, so the client can easily click from the invoice to payment, and you can easily generate a receipt once payment is received.
