Money Talk: Invoicing Tips To Help You Get Paid On Time
‘MONEY TALK’ IS A SERIES THAT BREAKS DOWN COMMUNICATIONS TACTICS TO HELP YOU CLEARLY AND EFFECTIVELY TALK ABOUT FINANCIAL TOPICS WITH CONFIDENCE.
Invoicing and self-employment go hand-in-hand but the more I talk with new freelancers, the more I’m realizing there’s a need for additional discussion.
So let’s start with the basics: When you become a freelancer and you secure your first client, you are responsible for setting an invoicing system in place to help not only make sure you get paid what you’re owed, but that you get paid on time.
This starts by establishing expectations with your clients upfront - not on the day you expect to get paid.
While there will undoubtedly be a client here or there who falls behind or works on their own billing routine, it’s important to have these discussions proactively so you and your client both have a clear understanding of what’s expected from one another.
For this month’s Money Talk, I’m not going to share a specific scenario but instead, I’ll break down my invoicing tips for getting paid on time… And guess what? It all comes down to communication.
You’re on a phone call with your client and learned that you just secured their business - congratulations! Before you wrap the call, take a moment to ask them: “Do you have a preferred method for processing payments?”
If they don’t, be ready to share what it is you expect from them. I typically work on a Net 30 basis and will send my first invoice on day one so that I actually get paid 30 days later. And I always run this by my client ahead of time so they’re not thrown off when my invoice hits their inbox.
Pro Tip: Working on a Net 30 invoicing system means that you expect to be paid within 30 days of submitting your invoice. It does not mean that you submit an invoice after 30 days and get paid right away. This is why I recommend invoicing either a deposit or your first month’s fee before you start or on the first day of service so you initiate a system for getting paid in 30 days and not 60.
Having this discussion with your client upfront also establishes professionalism and isn’t something anyone should be afraid to ask about. Getting paid is why we work, so make the discussion an active part of your conversation library.
Put It In An Email
After your initial discussion, either recap the process agreed upon with your client in a follow up email or add it to the scope of work. It’s necessary to keep a written record of the things agreed upon in person or over the phone so you have proof and acknowledgement of the conversation. It’s amazing what people forget when money is involved. ;)
Accounts Payable = Your Best Friend
I always like to start my first day of business with a new client with a welcome email. In this email I’ll list everything I plan to accomplish in the first week and then ask to be connected with the necessary person for processing invoices. This is usually an Accounts Payable Manager.
If you’re working with a client within a large organization, there will undoubtedly be new vendor paperwork to fill out and a person in Accounts Payable (AP) to connect with. The people in AP are your best friends because they are the ones making sure you get paid.
Take the time to introduce yourself in an email and ask if they’d like to schedule a quick call to go over anything they need from you to help streamline the payment process. AP is a processing machine and works a lot better when you give them exactly what they need the first go around.
The most important thing to remember when it comes to invoicing is to follow through on everything you said you’d do… Not only with your invoice, but with your services and deliverables.
Accountability in freelancing is paramount and you will manage your client better by delivering top notch service than you ever could by sending reminder emails.