8 Ways Freelancers Can Make Sure They Get Paid on Time

By Kentin Waits on 4 May 2017 0 comments

After 10 years working for various digital marketing agencies, I jumped ship and went freelance in 2005. Though making the switch was stressful, I've never looked back. Freelancing has given me control over my schedule, put an end to my mind-numbing commute, and allowed me to work from anywhere. (See also: 7 Things I Learned About Money After I Went Freelance)

Of course, all that freedom assumes one big thing — that I'm getting paid on time. If late payments are derailing your freelance dreams, listen up. Here are eight ways to make sure you always get paid on time:

1. Track everything

Getting paid on time starts with you. That's why organization is one of the life skills every freelancer needs. Keep meticulous records of all work completed and the payment status of every invoice. I rely on a basic Excel spreadsheet that's organized with the following headers: Client Name, Project Description, Hours/Rate, Amount Invoiced, Date Invoiced, Date Payment Received, and Notes (for tracking important communication with clients and the dates any payment reminders were sent).

2. Invoice immediately

To get paid promptly, you have to invoice promptly. Waiting weeks or months to invoice exposes you to client-side staff turnover, shrinking budgets, and sometimes even insolvency. Strike while the iron is hot. Unless you've made other arrangements, send a detailed invoice within 48 hours of completion of the work.

3. Tighten up the terms

Avoid confusion about payment terms by making them a standard part of your invoice template. Some variation of "Payment is required within 30 of receipt of invoice. A late fee of 5 percent will be assessed each month payment is past due" will usually do the trick. Oh, and be sure to include your contact information on every invoice. You always want your phone number front and center in case a client has billing questions.

4. Pave the way for easy payment

Encourage quick payments by making things easy. Set up a PayPal account or work with other payment apps like Google Wallet or Wave, which allow clients to pay online with a credit card. Though there's a nominal fee to process payments, it's well worth the immediacy and convenience.

5. Be kind, remind

Though some freelancers send follow-up reminders for every invoice (whether payment is late or not), that seems a little heavy-handed to me. Focus on what's unpaid and keep the tone of your message friendly and positive. Remember, the goal is to facilitate payment, not ruin a relationship.

6. Levy a late fee

Applying a late fee to past due payments is sometimes a necessary motivator. To minimize ill will from valued clients, make sure your late fee structure is modest (say, 5 percent each month), consistent, and clearly stated in the payment terms on every invoice.

7. Polish your professional image

If late payment is an ongoing problem, maybe your business isn't being taken seriously enough. Upgrade your image and work on how you present your business in all communications — including invoices. Download a free invoice template, tailor it to fit your needs, and add your logo. Better yet, create, track, and manage invoicing with a service like Freshbooks or Zoho.

8. Set up a retainer

Retainer agreements are simple work contracts. They provide freelancers with a recurring and predictable source of income, while at the same time allowing clients to reserve your services for extended periods of time — usually in preparation for big projects. Though invoices are still required in most retainer arrangements, they don't drive the payment process. For repeat clients, suggest establishing a retainer and offer an incentive. I reduce my hourly rate by 10 percent for all work completed under a retainer agreement of three months or longer.

In the freelance world, getting paid on time takes the same skill set that built your business in the first place: an obsessive attention to detail, a big dose of diplomacy, and a touch of ingenuity. Still need some motivation to speed up those slow-paying clients? Just remember how terrible your commute used to be. It works for me every time.

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