Troubled collecting money from clients who won’t pay? Don’t worry, you are not the only one. From late payments to getting completely ghosted, freelancers and small businesses face a lot of payment issues frequently.
Along with meeting your own financial obligations, chasing after payments also leads to wastage of your valuable time. It diverts your focus from important work. Also, leads to cash-flow problems, and at a later stage hampers your relations with clients.
We are here for your rescue. The strategies below will help increase the chances of receiving payments on time or earlier than expected from your clients.
1. Say It Out Loud
Set the payment terms clear at the beginning itself. Make sure your clients have a fair understanding of terms before the agreement is signed or the work commences. Doing this ensures that your clients are aware of your payment process and your expectations.
This method also reduces the chances of any confusion in the future. Mutual understanding by both parties on payment amount, timeframe, methods, late fees charged, and legal action is crucial. Apart from being vocal about these, ensure to include these terms in your essential documents like proposals or contract papers.
2. Opt For Prepayments
Once you have set forward the terms, request for an early payment whether full or partial. This ensures safety, especially with clients whom you are working with for the first time.
Initially, you will be apprehensive about asking for payment even before delivering work to your new clients. However, doing this makes the client engaged in the work, prioritizes your deal, and helps you in maintaining your cash-flow cycle.
If collecting payment is intimidating, go for the second option of asking for a refundable deposit. It helps to conform with the client’s hesitation of you not living up to your commitment. Upfront fee in any form guarantees that your payment is treated as obligatory rather than discretional by the opposite party.
If you are new to freelancing, also read our article on How to price your service for first-time customers?
3. Send Invoice ASAP
Don’t wait for your work to get finished. As soon as you are near the end, send out the invoice promptly with your draft work. The goal is to keep a shorter time frame between submitting the work and getting paid.
The sooner you send the invoice, the earlier you receive your payment as the client sees the urgency. Also, as the work is fresh in your mind, it reduces the occurrence of mistakes on the invoice part. Which otherwise would lead to the delayed payment.
Mention the payment dates clearly in the invoices sent. Realize that the date set is not too far in the future, if not it may get delayed. As the due date nears, you can also send a follow-up email for long-period-based contracts. If the client recognizes your quickness, they tend to prioritize your payment.
Another tip is to make your invoice stand out. Create a simple, streamlined, and easy-to-read invoice. Make sure the client can easily find the necessary information as it helps them in remembering it. At Refrens, we help you in creating beautiful invoices with ease in just 30 seconds.
4. Be Flexible In Payment Methods
It’s time for your clients to pay you; make this process easier for them by being open and accepting payment through multiple mediums. Many freelancers and small businesses have international and long-distance clients looking for ways for making online payment ease and of convenience to them.
Go for payment gateways like Refrens.com, as it accepts all the major cards and supports more than 90 currencies. Try and link your invoice to your payment gateway. The quickest way to receive payment early is to make its process uncomplicated and painless. The solution here is to allow flexibility by diversifying your payment methods.
5. Offer Incentives/Charge late fees
Missed payment deadlines are a quick headache for any freelancer. When a client keeps procrastinating your payments, try following up twice-thrice past the due date.
In the follow-up process, make sure you specify the terms of additional late payment fees (mention them in the invoice sent earlier) as discussed before, to be charged by you on them. During the follow-up, be polite and show gratitude.
You do not want to mess your relation with the client and lose them. Charging late payment fees encourages the clients to be prompt in making payment next time.
The other side of the coin is acknowledging the clients who pay early through small discounts to appreciate them. A quite effective method is ‘Early payment discount’ which is commonly practiced by many. Else, you can use any other form of reward to help your clients develop a habit of paying without delay or promptly. Make them understand that you value their timeliness.
You want to follow both of these options as you will face a variety of clients overtime.
Try these ways to reduce your stress and free your shoulders from the burden of receiving late invoice payments. Use Refrens.com to make your payment process convenient and to eventually ace the art of it.
We wrote a blog on How freelancers can use Social media to boost business? Read it here and leverage it to the maximum