Getting Paid without Going to Court: 7 Ways to Help Your Clients Avoid “Deadbeat” Status
Sometimes the biggest headache in working for yourself is in getting your clients to pay you. Many of your clients may be resuscitating their small businesses back to life (with your help) and have countless creditors vying for their attention, and most importantly, their money. While you’re an incredible asset to their business, you’re probably the least squeaky of all their wheels. And chances are you don’t have the energy or the resources to threaten legal action.
There are things you can do to help your clients pay your bill in a timely manner. Here are 7 tips to enabling them to stay on top of your account so they can retain your services.
1. Have clear contractual terms You can’t expect your client to abide by your terms if they’re unclear or nonexistent. Be sure to have clear contractual terms that are explained upfront so that you don’t have to initiate a by-the-way conversation later. Put in the time in creating and printing a general customer contract that can be altered by you to match each client. A great way to make sure your client is clear on the contract terms is to give them their own copy at the time of signing. A great way to do that is with NCR printing, an automatic carbon copy (white, pink or yellow sheet of paper). Just talk with your friendly neighborhood printer and they can walk you through it.
2. Charge interest This is another detail you should include in your contract and explain to your client upfront. Many freelancers don’t charge interest, and as a result, are viewed as the least penalizing of a client’s payees. Financial consequences of nonpayment are often a good incentive for any client.
3. Send out bills promptly If you’re sending out your invoices after the 25th of each month and your clients try to pay their bills before that date, you’ll be waiting an extra month for your payment. Send out your invoices promptly and include a due date. If you delay your billing of them, they will delay the paying of you.
4. Require partial payment upfront Sometimes it helps if you require intermittent payments, some upfront. If working on a larger project you could agree to a quarter payment upfront, another quarter payment mid-project and the remaining balance after the project’s completion. This takes the edge off larger bills and makes it easier for clients to remain current. It also gives you the additional commitment from your client, and they in turn remember the importance of paying you promptly.
5. Offer a 5% discount when full payment is made on time Everyone likes a discount. You’ll have fewer delinquent accounts if you offer clients 5% off if they keep their account current and pay bills on time.
6. Discontinue your services until payment is made in full Chances are your clients recognize just how valuable your services are. They are less likely to get behind in their payments if they realize that your services will stop until their accounts are current. If it comes to that point where you need to cut them off, do it without going back and forth. Communicate that with a prompt payment comes prompt service.
7. Screen potential clients One way to avoid delinquent accounts is to avoid delinquent clients. A simple credit check is all it takes to screen out those individuals who are already in a financial pickle. Keeping those people off your roster is a good way to avoid the headache of trying to collect payments from them later.
Most clients want to pay you, and giving them a little help is often all it takes to avoid past-due accounts. There will always be a few that fall behind and maybe even one or two that never send a payment at all. That’s when you can decide whether or not taking legal action is worthwhile. But these 7 tips will help most of your clients avoid delinquent status, and keep you in the black.
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