You need to pay your credit card bills on time, you need to pay your mobile and internet bills on time, you need to pay your contractors and employees on time but if your client delays paying the invoices, it can lead to cash-flow problems that can have repercussion effect on your complete freelancing business.
Here are 5 tips to help you collect payment from clients much faster and on time:
1. Timely Invoice
First thing first. If you delay sending the invoice to your clients, clients will delay the payment. Once you send the invoice to make sure the invoice has a due date and it is the same as the invoice date and not very far from when you send the invoice.
If you put due date at a later date, the client may forget the due date. So either you put the due date for your invoice as the invoice date or if your due date has to be at a later date, send a reminder when the invoice is due for payment.
2. Upfront Payment
Don’t wait for the project to complete before being paid and always ask for an advance payment.
I tend to follow a process that if the project is big, I take 30% as advance and if the project is of medium size, I split the payment in two and take 50% as advance.
If the client is a regular client or if the project is small, I am fine being paid after the project is complete. Even for regular and long-term clients, I avoid accumulating and invoice them on a weekly basis.
3. Part Payment Terms
Make sure the payment terms aren’t such that you are paid after the whole project is complete and has an option for interim payments.
Split the large project into smaller milestone that you can be paid as you make progress with the project on a weekly billing.
Some clients may not be confident with such payemnt terms. You can opt for an Escrow option with Freelancing sites like Upwork.
4. Payment Methods
Some clients won’t be confident paying with your choice of payment method. Make sure you accept payment methods that your clients are comfortable paying with.
As an example, Upwork started 0% fees for clients that I refer to them but some of my regular clients find Upwork so overwhelming that they prefer PayPal. There is very little I can do about it and has to accept PayPal despite such higher PayPal fees.
5. Resolve Issues Faster
Some clients tend to send issues after you have sent the final invoice to them. Often it is used to delay the payment. You have to be up for it and resolve those issues super quick to get paid on time.
Even if things are beyond the scope of initial requirements and if you find those issues to be trivial, avoid getting into the argument and try to get those issues sorted to get paid. Such behavior from the client can mean you can avoid them moving forward.