Getting paid on time is vital when you’re a freelancer. You need a healthy cash flow in order to pay the bills, care for family, put gas in the car, and enjoy life. When client payments are late, this lack of income can have negative financial implications. You’re suddenly left scrambling to make ends meet until the invoice is paid, especially when you’re just starting out.
Many freelancers simply rely on the goodwill of clients to make the payment on time but this isn’t really a professional way to go about things. After countless late payments, you soon realize something needs to change. You run a business and need, and deserve, that money to be paid on time.
Thankfully there are a number of simple ways to encourage clients to pay swiftly and ensure you maintain a healthy cash flow throughout your freelance career.
The following are 9 common mistakes freelancers make that prevent them getting paid faster, together with simple ways you can turn each mistake around.
Not getting a pre-work deposit payment
If you’re not getting a deposit – an upfront payment – before work begins then you’re setting yourself up for potential problems. A deposit has a number of benefits, one of which is getting paid part of the project fee in advance, which can help in paying bills and giving you some financial peace of mind.
Other benefits of asking for a deposit include: weeding out clients who wouldn’t pay at all; managing client expectations (businesses expect to pay a deposit); and keeping the client actively engaged with the project’s progress (answering questions promptly etc.).
Attracting bad clients with a poor brand and low fees
The lower your rates then the more problems you’ll have with people paying late or not at all. When people see you as merely a commodity rather than a respected professional capable of changing their lives and business, they will treat you accordingly. Bad clients can cause freelancers all kinds of problems, not least of which are late payments and unfortunate disappearing acts.
Modify your brand to attract clients who will appreciate your skills and experience, and who will therefore gladly pay on time. Invest in web/logo design and copywriting services. Raise your rates to the industry standard – or higher – rather than trying to attract clients by price alone.
Having no payment terms
Are you lacking clearly written payment terms? When you don’t tell your new client what you expect of them in regards to payments, then it can be difficult to demand particular payment actions later on. For example, some freelancers setup late payment penalties, where a percentage of the final project fee is added to the invoice after a set number of late payment reminders.
Unless you have this rule – and others like it – explicitly stated in pre-work payment terms then you may not have a lot of leverage later on. Payment terms in general show the client you mean business. They’ll be more likely to understand and respect your requirements.
Setting a payment due date too far into the future
When you set a due date too far into the future you give your client every excuse to delay payment. They put aside your invoice to pay later but sometimes they then forget all about it. This leaves you hanging for weeks at a time wondering whether they have misplaced your invoice or its about to be paid.
There’s no reason, most of the time, to set a due date of more than 14 days (or even less). Many businesses pay invoices on a particular day each week so this timeframe provides these businesses with plenty of time.
Delaying late payment reminders
You have the right to send a late payment reminder as soon as the invoice due date has passed. Maintaining radio silence when days have elapsed will do little to get the payment into your bank account. In the majority of cases, the client will simply have forgotten about the invoice and the payment date.
A gentle and polite reminder will, usually, see them make a prompt payment. If another week elapses, then a further reminder can be sent. With Invoice Ninja, you can set up automatic invoice reminder emails which are sent out at predetermined times until payment is received.
Sending out poorly written and formatted invoices
Sending poorly designed and formatted invoices to your clients can result in confusion, delays, and broken client relationships. If the invoice is hard to understand or there are problems, the client will need to get in touch with you to clarify things. They may also just brush the invoice aside to deal with later, when they have more time (which usually never comes). All of these issues result in payment delays.
Always make sure your invoice is clearly formatted and easy for the client to understand. Consider itemizing your freelance services within the invoice and adding a short reminder of what each service entailed.
Not providing adequate payment options
When a client finds it difficult to make a payment, then the payment process is going to grind to a halt. Some businesses prefer to pay via certain payment gateways and so it’s important to clarify these options before sending an invoice, and even before the project begins at all.
A great way to speed up payment times is by providing your client with a way to make a payment directly via the invoice itself. For example, with Invoice Ninja invoices, the client merely clicks a pay button and payment is made using one of over 45 different secure payment gateway solutions (including PayPal, Dwolla, Bitcoin, and various credit cards).
Being poorly organized
Poor admin organization negatively impacts on all areas of your career and that includes prompt payment from clients. When you yourself forget to send out a deposit invoice or final invoice, then fast payment and a healthy cash flow are not going to be part of your freelancing reality.
Place a heavy emphasis on developing systems that create order out of chaos. Invest in project management tools, neatly arrange your documents and apps, automate tasks, and find ways to send out invoices more efficiently, such as using dedicated invoicing software.
Being slow to complete client work
Slow work is rewarded with slow payment. If you frequently miss deadlines or set longer project completion times, then a project sign-off and payments will also be delayed. When you want to get paid faster and ensure a smooth cash flow then it’s imperative you find ways to work faster.
Like with organization, find time-saving tools and software that can help you be more productive. Learn time management techniques and hone your skill so you can speed up processes while still maintaining a high standard. Invest in time tracking software and record every hour you spend working, so you can then decipher from the resulting data just where you can speed up your workflow (and cash flow).
Get paid faster with the right tools and software
Receiving payments quickly and smoothly is easy when you set some initial ground rules and invest in the proper tools. With Invoice Ninja’s suit of features, you can automate many invoicing processes including the sending of late payment reminders and late payment penalties.
Our time-tracking and Kanban board software also allows you to speed up your project workflows and general admin tasks, which all help you to send invoices a lot sooner.