Five tips to get paid quicker
‘Money makes the world go round.’
That’s what a bespangled (possibly the only time I will ever get to use that word) Liza Minelli once said in Cabaret, and she’s probably right. If I didn’t already know that getting paid on time is important to people from working at a cloud accounting software company, I certainly know it from my days as a freelance journalist. Whether you’re freelancing, and relying on money coming in to pay your rent, or an SME, relying on capital coming in so you can afford to buy new stock, cash flow matters. A lot. In this post, I thought I’d share a few tips about how to make sure you get paid on time.
Be personal
Firing off an invoice with no accompanying letter to ‘[email protected]’ is no way to get paid quickly. Not least because The Daily Bugle is a fictional paper. You’re much more likely to get a response if you address the email to ‘[email protected]’, or whoever’s in charge of paying invoices, and write a few sentences about what you’re requesting payment for. And yes, all that ‘have a nice day!’ stuff is very American, but it does make people feel good. So be nice.
Don’t be a wallflower
Yes, there may have been a film about the perks of being one kicking around recently, but being meek is no way to get paid. This doesn’t mean you should become a Rottweiler, just that you shouldn’t feel bad about chasing payments you haven’t received. Sitting there thinking ‘I’m sure they’ll get around to me eventually’ after the due date on your invoice has passed won’t do you any good, especially if your email is sitting in their spam folder or if your invoice has simply slipped through the net.
Be thorough
- Your company name, logo, registered address and company number (if applicable)
- The invoice date and number
- The client’s name and address
- A list of what you’ve provided and, where applicable, a job reference or purchase order number (if you’ve been sent one by the client)
- When payment is due, as well as your payment details
Automate
Tight on time? Let’s face it, who isn’t these days? If you use a piece of online accounting software like KashFlow, you can automate the sending of repeat invoices (even down to that ‘Have a great day, Betty!’ email I was talking about earlier) and credit control. So if you’re still a bit shy about chasing payments, you can set up KashFlow to do it all for you. Automatically. Which is almost as magical as Disneyland.
Think about your payment terms
If your payment terms are currently 30 days or more, you might want to consider lowering them to 14 days, or asking for a deposit upfront. A month is a long time and long payment terms mean that you risk being put on the backburner. Just think of Christmas – a lot of people don’t start their Christmas shopping until Christmas Eve, let alone two weeks before that. By keeping urgency high, you make getting paid quicker more likely. Even if they miss your two week deadline by a couple of days, you’ll still be getting paid sooner than you were before!
If you make some of the changes above and nightmare clients keep failing to pay you, there may come a point when you should start thinking about cutting the cord – even when a lot of things are automated, there comes a point where the risk of not getting paid outweighs the time you’re putting into the work. The key is trying to make sure things never go that far…