How to Prevent Late Payments on Invoices
Getting paid shouldn’t be a hassle. But unfortunately, we’ve all had customers that take our payment terms and conditions as nothing more than a polite recommendation. Other times, customers can just forget about your invoice. In fact, almost half of freelancers have consistently been paid late. It can feel like it’s out of your hands, but there are steps you can take to prevent and deal with pesky late-paying customers.
1. Have your customers sign a services agreement
This is a preventative measure you can take BEFORE you do the work. When you and the customer have reached an agreement, send a services agreement before undertaking the project. Don’t worry, you don’t need to be a lawyer to write one up. There are plenty of templates out there for you to use.
This agreement should detail a final price, payment due dates, and any late fees should a customer pay after the due date. When the customer signs this agreement, you have proof that they have agreed to all terms and conditions of the transaction. This is an awesome resource you can refer back to when you’re dealing with late payments, along with any other payment disputes.
2. Write clear payment terms and conditions
This almost goes without saying, but it’s important enough to warrant mentioning. At the bottom of each invoice, you should always have a small “terms and conditions” section. This details the terms and conditions of your agreement (duh, right?).
Write something short and to the point about the details of the payment. Something like “payment due within 15 days” is okay, but you can go even further. “Payment is due within 15 business days of issue”, or even “To be paid in full by (exact date)” are two examples that provide no room for misinterpretation or wiggle room. Be specific.
3. Ask for confirmation
If you don’t ask, you’ll never know. Your email could have easily gotten lost in your client’s inbox, or opened with the intention of reading later, never to be seen again. This happens, usually through sheer forgetfulness.
When you issue your invoice (with full payment terms and conditions, of course), ask customers to respond confirming that they received the email from you. Send something along the lines of “Please reply with confirmation you’ve received this message.” If they don’t respond within 48 hours, follow up with them and ask for confirmation. This is a small but helpful indicator that your message wasn’t lost or ignored.
4. Follow up
Follow up with the customer once or twice after your final invoice has been sent (whether they’ve paid it or not). Send them a quick email asking them if they’d recommend your services to a friend or colleague, or asking to leave a review on your website or Facebook page. You don’t even need to directly ask for your money. Seeing your name in their email inbox will help you stay in the front of their mind, and help them remember to pay you for your hard work.
5. Stick to your guns
Most of the time, late payments are due to general forgetfulness. But there are cases where customers will purposely neglect payment, or refuse to pay in full. In these rare instances, don’t be afraid to fight back. Once payment is late, reach out to the customer on a regular basis to remind them to complete the payment.
If they try to ask for discounts or any changes to price after the job is complete, don’t back down. Stick to your guns, and point to your documents to show that your prices were agreed upon beforehand. It’s your hard-earned money, you deserve it!
Asking for money can be frustrating, and even awkward. But follow these 5 tips and you’ll see a drop in late payments soon enough.
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