What helps your clients is to understand how you do all of these things. How your pricing is calculated. When you will invoice them and how quickly. How you will expect them to pay and when. And how you can make all of that really easy for them.
Today I spoke to a lady who confessed she had not done her invoicing since before Christmas and now life is painful since there’s a big hole in her current cashflow. Can’t blame the slow payers for that one, just the slow invoicers. So we had a debate about how she could learn to love her invoicing and getting paid which is the whole point, after all. OK we don’t all do it for the money but we do need to eat. There are lots of ways you can record all the information as you go through the month which will enable you to invoice at the touch of a button at the end of the month. A spreadsheet. An app. An online invoicing system such as Fresh Books or even PayPal.
Prompt payment is a big bugbear of mine. I think people who do not pay you according to your terms are stealing from you. I never instruct for a piece of work to be done for me by a subcontractor without knowing in advance how I am going to pay for it on the day it is due or having had a conversation about the alternatives. So, I have the money in the bank first; I do not hope it will come in during their doing my job. This is irresponsible madness. This is theft of another person’s time and talents.
I gave up former businesses which permitted clients to take my services from me and my staff without payment and moved across to business models which allow nice easy and clean payment options such as standing orders, subscriptions and payments in advance or deposits. Thus the numbers of icky conversations we have to have about money are reduced to one or none. A client makes a decision to buy or not and the payments are automated. They can stop paying whenever they like but during the period of our relationship we never have to discuss money again.
How can you help your clients to pay promptly? Mostly I would never start work without at least a deposit; that is simply how the contract commences. A client showed me another good way in her business earlier this week. Her terms are that if the entire job costs less than £200 you pay in full in advance. If more than £200 then she wants a 50% deposit to start work and the balance is due on the day she delivers. Fair enough. Especially if she is at pains to make that clear in her terms and conditions. I would probably also explain that to my client too, to make sure they understand what is expected of them for their part of our commercial transaction.
Where do you gloss over these things in the hope of never having to get into them?
And how’s that working for you?
Yup. Thought so. Now that we are thinking about the thorny topic of money and your invoicing policies and routines and your payment terms and systems or lack thereof, how would you like to be paid by your clients? How can you automate most or all of that? How can you police your collections policy so everyone knows where they are and that you are a woman of your word with firm boundaries? How can you make it easy for clients to pay you and how can you keep up to date with all of this all of the time? How can you get comfier asking for money and talking about all of this?
Finally, do as you would be done by. If you are keeping other small business owners waiting for money, then that’s what you’ll attract into your life. It may not be illegal, but it is certainly immoral. Pay your bills on time and be grateful you can afford to do that, that you have lovely suppliers who’ve done a smashing piece of work for you and who deserve to be paid on delivery.
Be the change you want to see in the world and do everyone a favour by getting these financial details tidied up into a nice simple streamlined system highly visible on your website or terms of agreement. Then we all know where we are and your ickyness will disappear as you watch your cashflow improve.