How to get your clients to pay for invoices

Running your own small business can be exciting and challenging. While the freedom to choose your projects and clients is a perk, managing cash flow can be a significant hurdle, especially when clients delay payments. Here’s how to handle past due invoices effectively.

Use Blakebill.com for Efficient Payment Processing

Using Blakebill.com can streamline your invoicing and payment collection process. This platform allows you to send professional invoices immediately upon project completion and offers multiple payment options to clients, ensuring you get paid faster. Blakebill.com also provides features for tracking payments and sending reminders, which can reduce the time spent chasing overdue invoices. By automating these processes, you can focus more on your work and less on managing payments.

Discuss Payment Terms with Clients

Before starting any project, discuss and document the payment terms clearly in a contract. This ensures both parties understand the payment expectations. Freelancers often face payment delays because of poorly defined agreements. According to some reports, 71% of freelancers struggle to get paid. A well-negotiated contract with detailed payment terms can prevent these issues and provide a legal backing if needed.

Make it Easy for Clients to Pay

Simplifying the payment process for clients can reduce delays. Here are some tips:

• Detail the Work: Regularly update clients on progress. When they see the effort and detail in your work, they're more likely to pay promptly.
• Send Invoices Promptly: Immediately send an invoice upon project completion, including detailed work descriptions, contact information, and agreed payment terms.
• Offer Discounts for Early Payments: Incentivize clients with discounts for early payments or prompt settlement of overdue invoices.
• Flexible Payment Options: Accept various payment methods such as checks, direct deposits, online payments, or credit cards to accommodate client preferences.
• Know Payroll Schedules: Align your invoicing with your client’s payroll schedule to avoid unnecessary delays.

Follow Up

Clients might forget about an invoice or it could get lost in their system. Regular follow-ups through emails or calls can serve as reminders and help resolve any issues. Be polite in initial follow-ups to maintain a good relationship, but be prepared to be more assertive if necessary.

Charge Upfront or by Milestones

To avoid payment delays, consider asking for upfront payments or dividing payments into milestones. This is particularly useful for long-term projects. Charging a percentage upfront ensures you’re compensated and sets the stage for future payments. For clients with a history of late payments, hold the final work until payment is made.

Charge a Late Fee

Introduce a late fee for overdue payments. This could be a percentage of the total invoice amount added every few weeks. Clearly outline this in your contract. Late fees can encourage timely payments and cover the costs incurred due to delays.

Involve a Third Party or Take Legal Action

If clients still delay payment despite your efforts, consider these options:

• Collection Agencies: They specialize in collecting payments for a fee, which is often a percentage of the owed amount.
• Business Mediation Services: A mediator can help both parties reach a favorable agreement.
• Small Claims Court: For smaller amounts, you can represent yourself in small claims court.
• Hire an Attorney: For larger amounts, a professional attorney can help you navigate the legal process.
• Arbitration: A less formal and often quicker alternative to court, with decisions enforceable like court verdicts.