Invoicing can sometimes be the bane of a freelancer's existence. Receiving payment for a service or product you've delivered should be a simple act; however, things often get complicated when payments terms are not discussed beforehand.
Customers typically fall into one of four camps: those who pay on time, those who pay late, those who pay in chunks, and those who don't pay at all. A well-designed invoicing system can save a lot of headaches -- not to mention a lot of lean times waiting for the money to come in. Here are five ways to get your customers to pay you.
Send professional invoices
So what if my invoices look professional, you may ask? In theory, an invoice is an invoice, whether it's written on a paper napkin or emailed in a professional template. However, sending a professional invoice communicates a professional image. It means that you take your work seriously, and you expect to be paid for it.
Take the time to create a logo and build an invoice template that portrays your business in the most professional manner possible. If you're just starting out and a logo and an invoice template seem like luxuries you can't afford, think again. There are a variety of services online that can do the job for you.
Set payment terms during the contract negotiation phase
Be specific about when you require payment, and use standard payment terms. Net 30, for example, means your customer must pay the invoice within 30 days of receiving it. Other payment terms include Net 45, Net 60 and Net 90, meaning the customer can pay the invoice within 45, 60 or 90 days respectively.
For large orders, you may also choose to use incentives to get paid faster. For example, offer a 2 percent discount for customers who pay within 15 days. On the invoice itself, you would note this discount as 2/15 net 30, or 2/15, n/30.
Decide if you are open to flexible payment terms (but don't advertise them)
As is true of all businesses, certain customers will become regulars. When invoicing these loyal customers, consider discussing flexible payment options, such as monthly installments or online options. Do not advertise flexible payment terms directly on your invoice; rather, offer these terms on an individual basis with each customer.
Offering customers the ability to pay in installments ensures that you receive regular income, strengthens your business relationships and often leads to referrals.
Nix the temptation to hound customers who don't pay. Harassing phone calls and email blitzes do little to encourage your tardy clients to pay up -- in fact, these tactics often ensure that you never see your money at all.
Stay in contact in a professional manner. Use email to remind clients that they are behind in their payments. Consider offering online payment methods to provide busy customers with a quick and easy way to pay you electronically.
Weed out the deadbeats
Spend no energy on customers who don't pay. Initially, you will lose some money with this approach. However, over the long term, if you expend too much energy on deadbeat customers, you will spend more time trying to get money and less time actually earning it. Instead, treat the customers who do pay you on time like gold, and build your customer base on the referrals that come through them.
Photo credit: fastcodesign.com
Bio: This post was provided by Wave, an online software designed to help you be your own boss. Small business owners from all over the world trust Wave to help them with their accounting, invoicing, payroll and payment needs. Launched in 2010, Wave has already welcomed nearly a half a million users.