Cash flow is the lifeblood of a freelance business. Getting paid on time is the most effective way to ensure that you have sufficient funds to continue working and maintain your current way of life. However, many freelancers fail to get paid by clients on a regular basis. They spend valuable time chasing clients for overdue payments, eventually becoming glorified debt collectors. This is a serious waste of time but it can be avoided. These are ten ways for freelancers to ensure they get paid on time.
1. Research Potential Clients
It’s never been easier to research other businesses and individuals. Search engines like Google return a wide range of search results about potential clients. For example. If you type in the potential clients name followed by the word ‘scam’ you will quickly find out if they have a poor reputation online. The main types of results the search engines produce include their business details, websites, social media pages and comments by previous business associates. If you find any issues, avoid working with these types of clients.
2. Build a Positive, Professional Relationship from the Start
Once you’re happy about the credentials of a client, start building a positive, professional relationship with them. Most business relationships are based on trust, so it’s important to build trust as quickly as possible. Tell the client what they can expect from you and your business. In return, make sure the client agrees to follow certain guidelines such as realistic deadlines, prompt payments and other important details.
3. Get Paid Upfront
Where possible, look for some kind of payment upfront. This is not always possible but it’s worth asking your client for some type of payment before you start work, especially on larger projects where large sums of money are involved. In many situations your client may prefer this arrangement because they can pay you in stages rather than paying your bill in one large instalment.
4. Send Invoices on Time
Your business should be as efficient as possible. This includes the process of billing clients. Once you’re owed money send the client an appropriate invoice. It’s easy to forget this and start new work. Clients can also forget about work you’ve completed for them if they don’t receive an immediate invoice while you’re working for them. To avoid this confusion and the possibility of late payment always send your invoices on time.
5. Don’t Take On More Work Until You’re Paid for Current Work
When you’re working with a new client, it’s difficult to know how trustworthy they are. The more work you do for them, the more you may have to chase them for payment later. To avoid being owed large sums in the future, carry out a certain amount of work first, invoice the client and wait until you receive payment before starting further work for the client. If they’re not able to pay your initial invoice, there’s a good chance they won’t pay for additional work you complete for them.
6. Offer Various Rates and Packages
Give your clients options. Some prefer to pay in instalments while others like to pay a lump sum. Give clients a range of payment options too. This is easy to do because the internet offers businesses a wider range of payment options.
7. Offer Different Payment Processing Options
Some clients may find it easier to pay by credit card or PayPal, while others use more traditional payment methods such as cash or check. Accepting most types of payments will encourage clients to pay you on time.
8. Sign a Contract
When a large amount of money is involved, it’s important to make some kind of formal agreement. This protects you and your clients from a range of issues including late or non-payment of work completed.
9. Get Help with Collections
When you’re a freelancer, you become a Jack of all trades’. However, becoming a debt collector shouldn’t be one of these ‘trades’. It’s energy sapping and wastes a lot of time which could be spent on more important business activities. Hiring someone to look after this side of your business frees up your time, so you can concentrate on your work.
10. Incentives for Early Payment
Offering an incentive for early or prompt payments is an effective way to get paid on time. This could be some kind of discount on the quoted price for work completed. Just make sure you can afford to give these types of financial incentives. You can use a range of free online estimate templates to do this.
Getting paid on time is a major problem for freelancers. The tips above will increase the likelihood of prompt payments, so that you can focus on work and building your freelance business.
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