1. Invoice as soon as the work is done
You don’t have to wait until the end of the month to invoice your clients. If the work is completed send the invoice ASAP. The sooner you invoice, the sooner you get paid. If you have clients on monthly retainers many of the software programmes can automate the sending of these monthly invoices for you - it’s so easy once you have set them up the software creates and sends the invoices for you. Put time in your diary at least monthly to do all your invoice. If you don’t have the time to keep on top of your invoicing this is something you could outsource.
2. Make it super easy for clients to pay you
Make sure you list the details of how you want to be paid and the account details clearly on your invoice. Without these your client can’t pay you! Another option is in many of the accounting software packages you can include a link on your invoices that enable your customers to you direct from the invoice. Think about how your clients want to pay you: is it bank transfer, Direct debit, Credit Car or PayPal. Anything that makes it easier for your client to pay you is a good thing. If you have regular payments e.g. retainers consider using a system like GoCardless to enable you to take fees via Direct Debit. I love it, it makes life so much easier for me and my clients. You can also use it to take one off payments once your client has set up the Direct Debit.
3. Think about your payment terms
If you don’t list payment terms on your invoice they will default to 30 days. It’s up to you what terms you choose e.g. 7 days, 14 days, you can have different terms for different clients based on how well you know them and their track record. Longer credit terms should be earned. For higher value pieces of work, you could also consider requesting a percentage or full payment up front before any work is handed over. Make sure your terms are shown clearly on your invoice so the client knows when you will start chasing and they will start incurring late fees.
4. Be clear and accurate
You would be surprised at the number of invoices I see that don’t contain all the necessary information. E.g. what the invoice is for, payment details, payment terms. Make sure your invoices are clear and contain everything necessary that way the client has no excuse for paying you.
5. It’s good to talk
It’s not as easy as sending the invoice and waiting for the cash to arrive, sending the invoice is just the first step. It’s important to follow up with clients and keep communicating with them. If you have 14-day payment terms, you could call or email after 7 days as a friendly reminder that the invoice is shortly due, this also serves as a check that they’ve received your invoice and are not disputing the contents. Again, this is something you can outsource or automate to save some time. Software such as Satago connects to your accounts software and does all the chasing automatically.
If your invoice isn’t paid on time send a statement and keep chasing at regular intervals. Getting paid can take persistence, don’t give up at the first hurdle, you have earned that money.
6. Don’t be afraid to use late fees
You have the right to charge interest of 8%, in addition to the Bank of England base rate, if you don’t receive payment within your payment terms. If you state that you will charge late fees, don’t be afraid to do so.
If you want to discuss how a bookkeeper could help you get paid quicker don’t hesitate to get in touch