Do you ever notice how people are complete and total laggers when it comes to paying your invoices? They are GREAT at asking you to do stuff, following up with project related emails, and getting to the finish line of a big project, but as soon as you send an invoice- crickets.
Having a strong invoicing system in place is key for good cash flow in your business. You can have all the work in the world, but if people aren’t paying for that work in a timely manner, you get left with a big fat zero in your bank account.
But we can’t control what other people do, right?
Wrong! Well- not totally wrong, but while we can’t exactly control our clients, we can do a few things to encourage them to pay their invoices on time.
Here are 5 invoicing tricks that will get you paid faster:
Put a due date on your invoice
Don’t just send out an invoice that is due “at some point”. People need hard deadlines and dates, especially when it comes to paying bills. Even if your invoice is “Due on Receipt”, it’s still important to include an actual due date on your invoice.
Due dates feel more official to people and give them something concrete to wrap their heads around. It’s much easier to remember, “That invoice is due next Friday,” rather than, “I need to pay that invoice sometime.”
Don’t expect your clients to make that shift for themselves. They won’t. It’s up to you to spell out when you want to get paid for your invoice so they know exactly what you expect from them and when.
Create an invoice reminder schedule
We all get busy and sometimes your clients just need a little reminder to pay their invoices on time. Creating a reminder schedule will give your clients the nudge they need to pay you so they don’t get lost in the whirlwind of the next thing.
How often you send reminders will depend on your invoice terms. If your invoice is due in 7 days, then you can send one reminder a few days before the invoice is due. If your invoice is due in 30 days, then send 2-3 reminders before the due date.
Create canned email templates for your reminder emails and save them in your email program. You don’t need to write a novel- just a concise note stating that their invoice is due in X days and how they can pay you.
Add sending your invoice reminders to your calendar or to-do list. If you are forgetful about sending reminders, pre-schedule them in Gmail using Boomerang, which is an extension that will let you write emails ahead of time and schedule a send date.
Add a late fee to your invoice
A late fee is an effective way to get people to stop skipping out on your invoices. Even a nominal amount, like $25, is enough to get people to pay.
This is because everyone hates feeling like they’re throwing money away- and that is exactly how paying a late fee feels. It is SUCH a bummer to pay $25 (which could be used for a fun lunch date!) just because you procrastinated.
The trick with a late fee is that you have to enforce it. Don’t just say that you have a late fee and never charge it. If you do that people will expect you to waive the late fee all the time.
As soon as your invoices are late, send your client an updated invoice with the late fee included. It usually only takes 1-2 times paying a late fee for clients to get really good at paying their invoices on time.
Bill each job separately
One of the most common reasons invoices get delayed is because clients want to keep adding jobs to a project and the project drags on for-eva!
It’s totally cool to accept more work from a client, but instead of just adding all these random extras onto your original invoice, make a policy that you will bill each job separately.
This ensures that you get paid for the work you’ve actually completed on the original schedule, which improves your overall cash flow. If you expected to get paid for a big project on the 31st and your client keeps dragging out a project for months- that can really screw up how you manage the money in your business!
Instead of being at the mercy of your client’s whims, take control by invoicing each job separately.
Make your invoicing policies clear in your contracts
Have a separate section of your contract just for your invoicing and payment policies. Include your invoice terms (how long they have to pay you), your late fee policy, and your policy about billing jobs separately.
Next, to each of these policies, include a line for your client to initial. This signifies that these policies are important and the client should pay attention to them. It also gives you leverage if your charge a late fee and your client says, “I didn’t know you did that!” You can go back and show them exactly where they initialed on the contract.
Also, include your late fee policy on your invoices. People need repetition and having your late fee policy on the invoices will remind them that you have one and that you’re not afraid to use it!
What’s your favorite invoicing trick to get your clients to pay on time?
When I ran my cleaning service I would actually sit down with the new client and go over the policies and procedures then get them to sign it at the bottom. I can’t tell you how much this made a difference. I learned that we have to teach the client how we want to be treated. Otherwise we are subject to whatever they feel like. Do you think this would be a good idea for this type business also?
Great article! One thing I learned early on is never deliver a client all their product until you’re taken care of, too.
This article definitely helped out a lot!