Becoming your own boss was the best decision you ever made. You get an opportunity to hone your skills, choose your clients and projects, and even set your own rates.
Receiving payment for all your hard work is one of the best fruits of your labor (besides the work-life balance you’ve now achieved...hopefully).
Sure, in the beginning, it may seem a bit hectic organizing your business and life. But you’ll eventually get the hang of it.
As for billing clients, there always seems to be mixed reviews on how to manage their invoices. We find that 27% of small and mid-sized businesses struggle with creating and sending invoices.
And this is why you’ll find many now using automated payments via platforms like invoicely.
Then there are those who struggle with the entire process and end up waiting forever for certain clients to pay. For instance, in the UK, small businesses spend an average of 71 days waiting for payment.
This can easily push freelancers and SMBs into a rut that shuts their businesses down.
So in this article, we’re going to focus on how to bill a client like a pro so your company gets paid.
Let’s get started!
Create a (Verbal or Paper) Contract
Before you even begin working with a client, it’s important to have a mutual agreement in place. It’s alright to start out with a verbal agreement, especially for urgent projects.
But you definitely want to get something down on paper for legal purposes. Your word against theirs won’t account for much if the two of you ended up in civil court for non-payment.
Create a clear and detailed contract that outlines what services you’re offering to the client and at what rate. Then be sure to include guidelines on the due date for invoices sent.
For instance, you can have it due on receipt or do a Net 10, Net 30, or Net 45, which simply means the client as 10, 30, or 45 days to pay their invoice. What you choose depends on the project type and the client.
It’s best to involve the client in this so they’re able to pick a plan that meets their financial needs. Likely, you’ll end up with different payment plans for each client in some cases.
Once you have a contract in place, you’ll use this as the basis for creating your invoices. This way, you bill them the proper amount.
It can get confusing when you have multiple clients needing the same or similar services but have different rates. In the event there are missing components in your contract regarding payments, then touch base with the client before sending out the first invoice.
Then add it to the contract and have it signed again.
However, if you’ve yet to create a contract, a simple email with you both stating “I agree” will suffice.
Use a Template for Your Invoices
Since you’re doing the invoicing all on your own, you should look for ways to cut down the time it takes to do so. And one way to hasten billing is to have an invoice template in place.
Now, you can either craft this yourself using desktop software. Or you can use an automated billing system like invoicely to do this for you.
From here, all you have to do is fill in the blanks and submit your invoice. You want to keep certain details in the invoice, such as the client’s name, address, and contact info.
This way, all you have to fill in is the project details, rates, and the subtotal. The invoice number will also have to be changed for each invoice.
It’s good to have an invoice numbering system in place so you can prevent assigning the same number to different client invoices. However, if you’re using invoicely, you won’t have to worry about this, since the invoice numbers are auto-generated and tracked.
The more organized your billing process, the easier it’ll be to manage and track what’s owed to your business. It’s also recommended that you’re consistent with your billing.
For example, if you like to bill immediately upon completion, then always do that so the client knows when to expect the invoice. It’ll also quickly set the timer for the due date of the invoice so you can get paid faster.
Use the same system and process you create for all of your clients so you can keep better track of it all.
Simplify the Payment Process
Now, you can’t expect to get paid by your clients if you’re not giving them options to easily pay you. This is why it’s essential to accept multiple forms of payment.
For example, you want to be able to accept PayPal, Stripe, credit cards, debit cards, and maybe even bank transfers. This means you have to partner with third-party payment processors to make this happen.
But rather than going through all of this, you can easily invoice using invoicely. This allows you to accept both plastic and platform payments.
Some of the platforms it partners with include Mollie, WePay, Stripe, and PayPal. By using an automated invoicing platform, you’re making it easier for your clients to pay you.
They’ll receive an email with their invoice and a link to a portal where they can submit payment using their credit card or preferred platform. It’s quick and easy, which means clients will have little issue paying you right away.
The longer and harder the process, the more likely customers will push aside paying you immediately.
Now, if you’re going to accept check payments, then be sure your invoice includes areas for them to fill out this information. There are other methods you can use as well.
For instance, you can scan an image of it to your bank for a quick direct deposit. Otherwise, you’ll have to wait for it in the mail and then take it to your bank to cash it.
Don’t Hesitate to Send Out Invoices
How can you expect to get paid on time if you’re not sending your invoices promptly? By waiting too long, you risk your clients forgetting about your project, along with the payment owed.
Then once it pops up in their inbox, they may brush it aside because they’re too busy working on their next project. Plus, whatever payment plan you have set up will prolong it even more.
For instance, if you give clients 30 days to pay their invoice, it begins on the date you send it. So by waiting 10 days to send your invoice now pushes the possible pay date 40 days from the time the project was completed.
Some companies have a 30-day billing cycle. If you complete assignments on a daily or weekly basis, then consider asking them whether it’d be alright to bill them multiple times throughout the month.
As a freelancer, you may need to get paid faster so you can cover your business and personal bills.
Also, if by the time you send out your next invoice there’s still a past due amount for that client, then tack that on as well.
Then if there’s a provision in your contract that demands a late fee be paid, then include this as well.
At the end of the day, you want to establish a payment cycle that promotes a steady flow of money into your business. But it all begins with your contract and your ability to send out invoices promptly.
Using an automated invoicing system will definitely come in handy here.
Don’t Be Too Shy to Follow Up
You’re going to run into clients who “forget” to pay you on time. Now, if this is a first-time client or the first time a payment was missed by an old client, then you should reach out to them to see what happened.
Maybe there was an unexpected emergency or maybe they simply forgot. Sending a message inquiring about the late payment can help nudge them along to paying the invoice.
However, if this doesn’t work after several attempts, then you’ll have to kick things up a notch. In your next email or phone call, you can let them know that if you don’t receive payment by X date, then you’ll escalate this into a legal matter.
Worst case scenario, you’ll end up in civil court over late payments and fees.
So it’s important to do everything in your power to avoid this. This includes setting an agreement/contract in writing, establishing fair penalties and late fees, or even holding back delivering projects to a client that frequently pays late.
Following up on your invoices is key to ensuring timely payment. Using automated payment tools will also help streamline your invoicing processes.
Being a Professional in Billing Clients
If you want to be taken seriously by your clients, then you need to be professional in your communication, delivery, and invoicing.
Your clients pay their light bill, groceries, rent on time, so they’re definitely capable of doing so. You just have to give them the same sense of urgency.
By billing your clients promptly and making it aware of late fees if it’s not paid on time will definitely help.
And if you opt to automate your invoicing, you can remove the headache of creating templates and sending payment reminders.
But whatever you decide, let us know in the comments how you successfully bill your clients!