How Do You Ensure You or Your Business Gets Paid?
Angela Brown | 19 September 2018
What is the First thing to do?
Soooooo, you’ve got your client to agree to your business proposal – Hooray! Now, what do you do? You’ve taken the brief already, so you know what your client wants to be done, as you’ve sent a written proposal and it’s been accepted so you now have a starting point. You now need to formalise the proposal into your booking form or contract.
Preparing the Contract
You can now prepare your Booking Form. This is where you create your formal process. Your talking relationship and process now becomes the contract so to speak. Your finer points are now written down into your Description of Services within your Booking Form to be undertaken so it is clear what is to be provided between you and your client. As this is your document that will be signed, ensure that it is specific, or you can link it back to your proposal if you wish.
What Quality Standards are in place?
Have you provided a process as to how the work will be monitored or measured? How will you know well you are doing a job well done? There should be a provision in your contract to liaise with your clients regularly to undertake your quality standards of some description that will ensure that your client can review your work at regular agreed intervals.
What Terms have been specified?
It’s a good idea to specify what your hours of working are going to be and what your fees are. You will need to specify any Out of Hours charges, Urgent Work rates and Retainer fees too. Of course, do not forget that Retainer payments are to be collated up-front and ensure that your booking form reflects this.
Payment terms are a must here, along with your preferred method of payment. It’s important to specify all this information right at the beginning of your business relationship prior to commencing any work that you do for your client, to ensure that your contract is clear and precise. Have you specified whether any Late Payment fees will be incurred and whether you will charge for any Bank or PayPal fees/charges? Most freelancers do, it is a common practice.
Finding the right Contact
One thing that is important is to find out who is the bill payer. The person you are dealing with as your client is not necessarily always the bill payer. Make sure you ask. Are you dealing with a sole trader or a small business entrepreneur? If it is someone else in a small business or an accounts team, make the effort to make a courtesy call to them when you have taken on the signed contract and introduce yourself to them.
Send them some of your branded material if you have some, and get on first name terms with them, it is helpful later on down the line – if you ever come to need them to chase for YOUR money! It’s better to speak with ‘Jane in accounts’ than ‘Accounts’ when you need that £500 you need to pay your bills at the end of the month.
Ensure you have provided all your contact details so you are available by every way your client needs to get hold of you to enable the task/job to be completed. If they need your phone number, ensure they have it along with your email and your social media links. You do not want them to say they tried to get hold of you to try to pay your bill, and you could not be reached.
The Invoicing Process
So, you get your signed contract returned and this is now the appropriate time for you to send your invoice out. You can then send your invoice to the named ‘Bill Payer’. Remember it is to the bill payer, not the named client necessarily – there may be different people who are responsible for settling payment of your accounts, than those who deal with the purchase/sales of any business transactions.
You need to specify how many hours, products or services etc on your Invoice and what tasks/projects are going to be undertaken and for what costs were agreed in the contract on your Invoice and specify the date of the contract you are referring to so that it is all linking back to each document. You can see what is happening here, can’t you?
In summary: The Proposal links to the Booking Form/Contract. The Contract links to the Invoice. The Invoice links to the Client’s Order Number (if you have one). The invoice has your payment terms and preferred method of payment on it, which again should reflect what you specified in your contract.
In essence, make it easy for your client to be able to pay you. Is there a link to be able to pay you directly or is there a sort code and account number clearly identified on the invoice or other means to be able to pay you that you prefer?
You Undertake the Job in Hand
So, you get on with the job in hand and complete it to its satisfaction. BUT STOP! Was it a retainer? Was it paid up front? All retainer projects are paid up front, that’s a given. If that was in your contract why did you start the work without the payment? You don’t buy anything online without paying for it first do you? Well, most things anyway.
This is why you spend so much time on your contract. The detail is in the administration. If you do not think you can do this or are too busy to undertake these tasks, or it is out of your skill set, hire a Virtual Assistant to do this for you. These types of tasks can be one-off ad-hoc tasks that VAs can undertake for you. If you are undertaking tasks that are ad hoc and require manual timing and are going to be billed at the end of the month, then you can ask for a deposit which will be paid UP-FRONT and you can then invoice for the remainder accordingly.
If your client is a first-time client and your project isn’t a retainer, then you can word your contract accordingly so that you ask for a deposit also.
Waiting for the Payment
You have sent your invoice and wait patiently and have specified your terms. Whether it is Payment By Return, 7 days, 14 days or whatever your required terms are, and the time period has passed, and you have had no response. Yikes! You are providing a service or product that requires you to keep deadlines or time free for other clients too and this means that you are a) losing that time because you could have spent that time working on another client’s work b) produced another product for another client c) utilised/managed the time differently on other projects, accounts, social media marketing and so on.
Whatever the reason, you have put time aside in your month for this work and you have not received your payment, so what do you do?
If you have followed all of the steps above, and you have had a good relationship with your client and/or Jane in the accounts department then all should be well. Your preparation and administration should keep you in good stead. Speak to your client, your business-relationship should be your first point of call. Pick up the phone, a gentle nudge is maybe all that is needed.
A hectic lifestyle sometimes just gets in the way. Did an email go in the ‘junk mail’ perhaps, has someone had a bereavement and just not been around a computer to see any notifications, there are many reasons that someone may have reasons not to have paid you.
What if I Do Not Get Paid?
When you have had the obligatory phone calls, you’ve nudged and not had the responses that you need and you have asked for a payment by the end of the week as your invoice is still showing as unpaid and you need to diarise the work into your schedule otherwise you are going to lose the timeframe, are your doubts creeping in?
Have you looked at what accounting package you use? Can this assist you at all? Does it look professional? Have you sent a manual document or a slip of paper? Can your accounting package send reminder invoices to prompt your client so that you can create a little distance between you and your client so as not to ruin any business relationship you have? Have you considered sending a reminder letter if your gentle prompts and reminders are failing? There are invoice payment reminders and a series of reminders that can be sent, again another service that your Virtual Assistant can provide for you and send on your behalf.
But what if I Fly?
What you’re really aiming for is to get your invoices paid. If you have done all of your groundwork and the preparation that is needed, then it really should be a matter of how you maintain your business relationships initially in the lead up to gaining your contracts and how you then pursue the process.
Once you have received the payment you can then undertake the job at hand.
Undertaking the Work
Hooray! This is the easy part, isn’t it? You get the work done and submit it. You ‘Wow’ your client and then ensure you get your repeat business and just do it all over again!