It doesn’t matter whether you’re a freelancer, a small business owner, or a large business owner, one thing we can all agree on is the fact that one of the most rewarding aspects of starting your own business, is receiving payment.
When you work for somebody else, you don’t really need to worry about getting paid, unless they happen to mess your wages up of course. More often than not, however, you either sign in and out and get paid for the hours you have worked, or you’re on salary and you will receive the same amount each month.
As a freelancer/business owner, however, your payments will be a great deal more sporadic. Rather than getting paid on, say, the last Friday of the month, each month, you get paid basically whenever your clients pay you.
Most customers are perfectly reliable and will pay you when requested, with no trouble whatsoever. Others, however, can be a little more unreliable and frustrating, which is where it pays to know how to invoice a client. If invoicing is not your strong suite, worry not, because below we’ll be outlining a few tips on how freelancers can invoice their clients efficiently and professionally.
Set up your own terms and policies – As a freelancer, the good thing is that you are your own boss, so you call the shots. You get to decide how much to charge your clients, you select the currency and payment method, and much more besides.
When invoicing, it is important to make these terms and policies clear to your clients. For example, if you are worried about clients withholding payment (more on that shortly) you could perhaps invoice half the payment up front, and the other half upon completion of the job you have been hired to do.
You could impose penalties for late or incorrect payments, and you can request payment within 7 days of completion of the task at hand. It is, however, very important that you make sure the client is made aware of these terms, and that they agree to them before you go any further. Sending late payment reminders is also one of the best ways to increase payment rate.
Stand your ground – Remember, as a freelancer, you are your own boss, so it is down to you to ensure you get paid, the full amount, on time. Some freelance clients try to dictate the market and will try to bully you into lowering your prices or threatening not to pay you whatsoever.
In these instances, it pays to stand your ground and to stand firm. Obviously, you should never become confrontational, but you must let them know that you call the shots. They need your services, which is why they have contacted you in the first place, and if they try bullying tactics, make sure you let them know that you will seek legal advice if they persist in withholding payment after you’ve completed the work. Make sure you hold onto as much documentation as you can, including email exchanges, just in case you do need to seek legal advice.
Invest in accounting software – If you have yet to invest in professional accounting software, make this your next business purchase. No, really, we mean it. Online billing and accounting software is designed to help you create professional invoices which look the part, and are also very easy to understand and monitor.
What’s more, many of these pieces of software can be setup so that they invoice automatically. This means that, if you have a client whom you invoice on the 1st of the month, every month, you can set up the software to automatically invoice them for you, on that particular day. This accounting software is also very useful because it will allow you to monitor which clients have paid, who hasn’t, and how much you received.
Organize, organize, organize – It doesn’t matter how busy you are, when it comes to invoicing, you simply must ensure that you are as well organized as you can possibly be. You must make a list of all clients you are working with, make note of whether they are regular clients or not, provide a brief job description, and of course, make note of how much they owe you.
With PayPal for example, when you create an invoice for the same client, it will automatically designate a number for that invoice, which will increase each time, starting of course, with 1. You simply cannot afford to leave anything to chance when invoicing a client as you need to know how much you are receiving, plus you will need your records when the time comes to do your taxes, or perhaps, for when you are audited.
Be polite in the event of late payments – Sometimes, no matter how great your clients may be in terms of paying on time, there will almost certainly be times where payments are received late. Now, when you’re snowed under with work, with bills to pay, and late payments to chase up, of course, you will get annoyed.
There will be a big part of you that wants to pick up the phone, or jump on your email, and give them a piece of your mind for wasting your time. However, in business, it never pays to lose your composure, so try to remain calm.
Though you may be tempted to lay into them via email, instead, send them a polite reminder that payment is late, and could they pay as soon as possible? By doing this you are letting them know that you aren’t happy, without upsetting them and potentially ruining an otherwise stellar business relationship.
Never undercharge or overcharge – Virtually all businesses are extremely competitive these days, so of course you should make your prices competitive, but you should never undercharge. Look at your competitors, look at the quality of your services/products etc, and make sure you charge accordingly.Before you get carried away, you also need to be aware that overcharging is the easiest way of losing a client you could ever wish for, so price fairly, not greedily.
Start invoicing today and get paid faster with SlickPie!