Getting Paid on Time – 3 Ways to Get Clients to Pay You on Time
Ah, self-employment; what a luxury. You’re your own boss, with your own clients, working in your own time, in your own space and living life large. Right? Well, for the most part yes, but in order to get the most out of your no-boss status money needs to flow in as rapidly as work hours fly out. Most of us need to work for our money, and unless you’re sporting an Elon Musk salary, the chances of generating enough cash flow to carry you through to the next month are pretty slim.
Ask any self-employed person about the drawbacks of kicking the 9-5 office job and they’ll say the waiting game. And by that they are most definitely referring to the lag experienced in settling invoices for work carried out for a company. This is where things get tough, stirring up the same anxieties and fears of the company employment, escalating them to a whole new level.
Personal expenditure hardly ever takes the back seat, there are so many utility bills to pay, taxation dues to be tallied and general everyday necessities to purchase; so late payment could cause havoc for a freelancer or small business. The question is… how can I get my clients to pay me on time?
Unsettled invoices are a trending practice in the self-employed world. With 16% of invoices going unpaid and 37% missing the ‘pay by’ date even though works are carried out efficiently, to deadline and used to the client’s discretion; proving a job well-done. So what’s the solution?
Even though most freelancers set payment deadlines for clients, they are hardly ever taken into consideration; either due to busy schedules, tight cash flow and more important company responsibilities that seemingly take over. However, there are a few techniques you can try to speed up the payment process and avoid those uncomfortable phone calls from your bank at the start of every month.
1. Create an Incentive
Positive reinforcement is the key to getting people on your side in general, and when it comes to getting paid on time, it works out as quite a solution too.
This can be done by acknowledging timely payment and showing your appreciation for their professionalism. If you’re a designer, throw in a free design as a kind gesture, if you’re a writer, create some social media content that could help boost their sales.
This will encourage your clients to keep up with your invoices and settle before you start chasing them for payment.
2. What about Positive Punishment?
Ouch. This one sounds tough from the get go. But could it work?
Positive punishment is a risky technique that only has a specific time and place to be used, primarily when payment seems like an issue from the get go. This is when the freelancer or self-employed may need to lay down the law.
Although this is not a desirable technique, it is practiced and at times, does actually work. By adding a percentage charge increase onto your invoice, for example 5% increase per week, employers will only need to be bitten by the punishment once to avoid it in the future.
Though, be warned that this technique will leave an incredibly sour taste in your client’s mouth – this might put them off working with you in the future.
3. What about discounts?
Contrary to punishment, rewards could also work in your favour. Motivation is one of the key performance inducers, giving your clients the push to pay on time with reduced fees or discounts on early payment could be a win-win for every self-employed worker out there.
Most freelance professionals might think it unfair to reduce their profit to get what’s rightfully theirs, and even though they’re 100% correct, getting paid on time could sometimes be worth the stress that comes with late payments.
Factoring in such discounts into your rates could compensate for huge losses. If you’re working on a big project that requires a great amount of time and energy, the whole thing might seem too time consuming for little reward. Offering smaller discounts like 1 or 2% off could trigger clients to settling within reasonable time frames.
All in all, remember that you will get paid eventually. If the situation does not get better, moving on for a client is the ultimate solution – but – be sure to close on an alternative client before you politely kick the other to the curb. And don’t forget to take a long hard look at your professional appearance to clients.
Your invoices could be a great place to start in your own business improvement process; prepare a compliant invoice with both your and your client’s logo on the document. Ensure that it’s dated correctly, addressed to the right person and features clear payment details, preferred methods of payment and a payment deadline.
Using Timestead allows self-employed individuals, freelancers and small businesses to manage their invoices in a structured and professional manner, allowing for improved time management and easier implementation.
Always remember to mind your Ps and Qs, a simple thank you and please can get you a long way. Even though agreements are put in place and work flow is constant, your overall attitude plays such a vital role in the professional environment you nurture. It might be your right to get paid on time, but being friendly and cordial is just as important.