Tuesday, October 18, 2011

Payments and Clients

As part of your business plan you need to write up a procedure for dealing with your clients and payments.
How do you want to receive your payments?
When are you going to invoice your clients?
With once off jobs/tasks I would suggest you start of by asking for a 50% deposit before starting work, then on completion of the task and the client has came back to say they are happy with the work then you send an invoice. Do not start the work no matter how urgent before receiving your 50% deposit. Your payment is also important as is the clients work.
My clients have 10 days to pay me from date of the invoice. If that client has not paid me I then follow up and keep following up until payment is received. With once off clients you invoice on completion of the job, not at month end. You point out your payment terms to the client and ask nicely when you can expect to receive payment, especially so when you work with subcontractors as those contractors need to know when they will be paid.
If I take on a client and they become  regular clients I then move the payments to monthly payments. I try to get my invoices out around 28/29 of the month, I try, its not always possible as often I can be too busy. Invoicing is important and I try to maintain that (try).
My monthly clients either pay on receipt of the invoice or within a few days. If the clients dont pay I send a friendly skype or email reminder. Our clients can also be just as hectic as we are.
Note: we will get the clients that do not pay, that is an accepted part of the job and part of every business.
Have payment terms on your invoice and as part of your terms and conditions in your clients contracts.
There is no need to be afraid of invoicing your clients, its is part of dealing with clients and part of doing the work for clients, you are a business owner and you must think as one.
Keep track of all your invoices, payments in and out, its important to know how much you earn and what profits you are not making or are making. You need to know where your company is financially at all times. Your basic bookkeeping must be part of your monthly procedures for your business.

No comments: