1.
1
Make your payment policies clear at the time your services are
retained. However yourbusiness is approved, whether it's by a client meeting, or by you submitting a
bid, at some point, your client must agree to your estimated price for the work
they want done. If your payment policies are stated clearly on your contract,
bid, or whatever document you use to bind the contract, you are ahead of the
game.
2.
2
Accept all forms of payment and
encourage credit card payment. If possible, take credit cards. In
this way, you are sure to be paid in timely fashion even if the client doesn't
have the funds at the current moment. Shop for a merchant account provider and set up credit card processing
for your business
3.
3
Get a deposit in advance. Unless you have a
relationship of long standing with the client, get money in advance, and then
plan to collect some more midway through the job. Usually, this is 30/30/40 -
30% in advance (to bind you, and to enable you to purchase materials), 30% upon
completion of some agreed-upon benchmark, such as delivery of comps (rough
sketches, if you are an artist, or small printouts if you make signs or do
other design type work, etc), and the balance upon completion. By the way, make
sure it's clear that "completion" means on the day you deliver it -
not whenever they feel like it.
4.
4
Always let the customer pay when they
offer.
One of the dumbest things business owners do is shoot themselves in the foot by
not accepting a check when it's offered. Many times, a client will ask,
"Do you need a check now?" and the business owner says, "No,
that's okay, we'll get it at the end." Don't do this! If the customer is
happy to pay up front -let him!
5.
5
Make arrangements for payment before you
deliver the final product. Hold back enough so that they will
need to pay you before you deliver the finished job. It is notunprofessional
for you to do so, though many business owners consider this a
"low-rent" practice. It's not low-rent - it does not telegraph to
your clients that you cannot afford to await payment - it lets them know that
you are a professional accustomed to being paid for your work in a timely
manner. Just say something like, "Hey, Mr. Jones, I have your job all
ready to deliver. Can you have a check ready for me if I swing by around 3 PM?.
The balance due is $470.78."
6.
6
Follow up every day until you receive
your money. Obviously, you should try to get paid before this need
arises. However, sometimes, you have a lapse in judgment, or you're lulled into
a sense of security by a client you've had no problems with in the past. The
thing is, once your client realizes your payment policies are lax, s/he will
opportunistically attempt to exploit it every time. And remember - every minute
that you are working to get paid is a minute that (A) you are working a second
time for money you've already earned and (B) you are not working
on a new job, which still needs to be finished on time, and you're running that
job later by the minute.
7.
7
Apply your payment policies to every
single customer. Don't give your friend Joe's buddy a
bye on this. If anything, treat friends of friends with even less trust
than a stranger - they often attempt to take advantage of your cozy
relationship with their brother, buddy, whatever. If this guy has not paid you
by your due date, call him immediately and ask for payment. If you are put off
till the next day, call again the very next morning.
8.
8
Contact
the credit agencies. Printing a warning on the bottom of
your invoices is fine, but if you fail to follow it up, you won't ever be taken
seriously. Contact the credit agencies, Experian, TRW, etc., and report
late-payers. If it's their first time, call the client first, and let them know
that you're terribly sorry to do it, but unless you receive their payment before
the 30 day deadline, you will have to report it to the credit agencies, thus
damaging their credit. It's a powerful incentive to pay.
