Managing your cash flow as a freelancer can be a difficult task. When clients are late with payments and invoices are ignored this can really have a negative impact on your lifestyle and stress levels.
Freelancers are constantly having trouble collecting payments from their client but this unneeded stress can be dealt with quite easily if you implement the right strategies.
So here are 5 tips you can use to help you get paid on time by your clients.
1. Write up a contract
Writing up a contract will give your client a visual representation of what work will be done and what is owed to you for your services.
Go through the contract together before you begin any work, making sure you’re both on the same page and be clear with your payment times.
Get them to sign the agreement to make it official; that way, if you have any difficulties with late invoices down the track, you have the original terms of payment to refer back to.
2. Request a deposit
It is smart to ask for a deposit upfront before starting any new work for clients.
This shows that you’re serious about receiving payment for your work and provides some measure of security if they are late to pay the remaining amount.
You can charge whatever percentage you feel comfortable with. A good ballpark figure would be around 30%-50% of the total cost of the project.
Do not start any work until the deposit has been received.
3. Send reminders
Waiting around for an invoice to get paid rarely works on its own. Sending a reminder and being proactive can sometimes be all it takes to receive payment for your services.
At the end of the day, people get busy and forget things so sending reminders should be an essential part of your payment collecting process when you are running your business.
By constantly sending friendly reminders to your clients, you increase the chances of getting paid and retaining a good relationship with that customer.
Remember: Send reminders before the due day of payment as well as after if they have not done so.
4. Make payment methods easy
By making payments easy to send, your client has no excuse when it comes to paying your invoice.
Have your payment options presented clearly on your invoices and provide options that require minimal effort for your client.
By making the payments process easy, you are less likely to deal with non-paying customers and remove any excuses they may have.
5. Charge a late payments fee
Discourage late payments by making it clear that paying late will have its consequences.
Charging a late fee gives your clients a very good reason to not pay you after your due date. No business wants to pay more than they already have to, so by showing them that additional costs are involved with late payments your clients are more likely to pay you on time.
A good rule of thumb is to charge an additional 2% per month. This means that for each month that goes by unpaid, you add 2% more of the total amount owed.
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