Happy First Money Monday of the New Year!
Keeping up the momentum from 2018, we are going to glide into 2019 with that same bit of enthusiasm and positive thought for what will happen. Making that easier on you is getting paid, getting paid faster, and greenlighting more new projects. If you provide a service to people, you know you are the Hustler In Chief, and you are in charge of bringing in new work, getting paid for that work, and nurturing a family of happy clients - clients you picked by putting out there the type of people and projects that are good fits for your business - and then treating them well.
Keeping an eye on the positive, here’s how you’re going to get paid faster this year, and how you’re going to greenlight more new work - without compromising your price. I’m a pay up front kind of girl. None of us have time to chase rainbows and payments anywhere after 10 days - so the whole 60 or 90 day terms thing is a thing of the past for you. Who can live on that?
Offer Payment Plans
Thanks to payment subscription services from Recurly, Paypal (haven’t tried Squarespace’s yet, so can’t vouch for it) and even perhaps your own merchant bank, you could offer payment plans on larger projects that might make it easier for a client to pay. Consider offering incentives to your client to pay in full, or on a tighter schedule. If you do a payment schedule, like 50% up front, and 25% at Point A and the final 25% at Point B, be sure to kindly stop the work if the payment doesn’t arrive on schedule.
PRO: When using an automated payment plan subscription service, the payments come in on time, automated. No more billing and chasing payments.
CON: If the business goes out of business, your payments might end. Be sure you structure a timeline that is not too long. This is also difficult if you have to pay sub-contractors who do not wish to be paid on payment plans. Have enough cash on hand to make payroll and pay your contractors their bills.
Monthly Retainers
Monthly retainers are dreamy for some, and if you have a client ready to commit, this can be good for both of you. The client knows what to budget each month, and you know how much work to put in. Just be sure to keep track of the time your team is spending on each client. If you begin to put more time in than budgeted, you should kindly bring this up with your client and revisit the budget, or the scope of work.
RECOMMENDED: Present a Status Report at the end of each month to let your client know what you did for them.
Pre-Paid Project Packages
There’s nothing worse than chasing payment for a flyer design. It’s only $30, gah! This is where Pre-Paid Project Packages come in handy. Either estimate spot-on how much a smaller job will cost and bill that amount, or if the client sends in little jobs over the course of the month or couple months, then encourage them to pre-purchase a package of time (discount it if you want), and credit your work to that. Deliver a Status Report to them to let them know how their time is being spent, and how much time is left. Our number for a small job is $2,000. Anything under that gets paid in full before the job starts.
Credit Card Billing - Bye Bye Check
All of these recommendations are based on the fact that you accept credit cards. Getting paid via credit card is much faster. If you don’t like the credit card fee, simply build this into your overall cost of services. Credit card payments will be difficult with corporate clients. But you could try. Unless your payment amount is just too high to justify the credit card fee. Consider Direct Deposit, and offer a (tiny) discount.
Pay After The Work Is Done
This is the traditional way of getting paid - billing after the work is done. This can also be where the race is on for chasing that payment. You may want to consider nixing this, or only offering to clients with “Good Credit History” with you. I’m not talking Dun & Bradstreet or Transunion. I’m talking Good Credit History with YOU. Do they pay quickly and on time? If so, they can remain in the Pay After The Work Is Done crowd.