Never Wait For An Invoice To Be Paid Again With These 5 Simple Tips
Running your own business has a lot of plus points, but one key downside is the financial uncertainty, especially if you’re starting up. Many people choose not to go down the self-employed route due to its uncertainty, but building relationships with clients can help to resolve this.
Getting paid on time
Having a good understanding between the two parties involved helps when it comes to getting paid on time and within the payment terms and conditions. We’ve rounded up a few easy tricks to help you get paid on time.
Always have a contract in place.
A contract lets you both know the terms of your agreement and what happens when invoices go unpaid or are paid later than discussed. Contracts are a necessity for the self-employed; you wear many hats when running a business, and things can get forgotten or misunderstood. Having everything down in writing helps make the partnership more official.
Get organised.
You need to have a system in place where you can track your invoices. This could be an old-fashioned spreadsheet or a book of receipts, but we’d recommend investing in digital accounting software, such as Sage or QuickBooks.
Specialist software allows you to create invoices fast, keeping everything in one place for when you have to submit your tax returns to HMRC.
Some – like FreeAgent – even have a reminder tool that sends clients a reminder a few days before the payment deadline.
Read our blog post comparing the best digital accounting software for businesses here.
Add your payment T&Cs on every invoice.
Clearly explaining your payment terms lets your customer know how they should pay and when the payment deadline is. It doesn’t have to be pages of information, simply a short line saying “14 days payment term” or something along those lines.
Offer incentives.
You may wish to offer a discounted rate if they pay early, or for the first few months of the contract. Alternatively, you could offer discounts for existing clients who always pay on time.
Make it easy to pay.
Most self-employed workers use their bank details via BACS, or sometimes PayPal accounts to receive payments. Some services allow you to set up a direct debit for regular-paying clients, such as GoCardless and Stripe. This way, you’re in control of what money comes out and when; similar to how you pay your phone bill.
Provided both yourself and your clients know the payment plan in place, you’ll find that most customers pay up on time and as expected. By putting these few simple steps in place, you should see that your invoices get paid quicker as time goes on.