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8 Tips for Freelance Designers to Get Paid Faster

Business, How To | Feb 4, 2011

Cash flow is crucial for any business, but especially important for small businesses and freelancers.

When you think back to when you first started your freelance design career, you probably didn’t expect to spend so much time chasing down clients to pay their invoices. You started it to do what you love and get paid for it.

To help you do just that, here are 8 tips that you can implement into your business immediately to help you get paid faster.

If you have any other tips from your own experience, please share them with us in the comments.

 

1. Manage expectations from day one

Sometimes freelance designers are so excited to win new business that they rush through a new deal without a contract.

Don’t be afraid to give your client a contract, they expect it and you’ll avoid many future misunderstandings, headaches and unpaid invoices. It’s also best to take the time to walk your new client through all the key deliverables and payment dates at the start of a new project.

Also, it’s not a bad time to remind them about your late payment polices, which should be included in your contract if you have them.

 

2. Build a strong client relationship

The best way to build a strong client relationship is to be in almost constant communication with them.

Update them on what you’re doing and how things are going. Get them to feel part of the project. This also ensures that you both have a thorough understanding of the work being done.

And, that way when it comes time to invoicing them, there won’t be any surprises.

 

3. Find the person that pays you

The person to discuss your payment with will differ between clients.

For example, if your client is a small business, chances are the business owner is the person that processes payments. If your client is a mid or large sized company then it might be their accounting department or financial controller.

At the start of a new project, make sure you have the name, phone number, and email of the person who will be processing your invoices. In fact, ask for an email introduction if necessary.

Chances are they will reply back to the note with an email that will have all their contact info in the signature. This will come in handy and save you a lot of time when you need to find the appropriate contact to address any outstanding invoice.

 

4. Don’t underestimate your invoice terms

All invoices have payment terms listed on the invoice (or at least they should).

Have you ever given any thought to your terms? You might be surprised just how much they can determine how fast you get paid. In fact, the Market Intelligence team at FreshBooks studied its users’ payment terms in order to find the best invoice terms to get you paid faster. Here are the findings from the study. (For the full report click here)

  • Be polite
    A simple “please pay your invoice within” or “thank you for your business” can increase the percentage of invoices that are paid by more than 5 per cent!
  • Don’t use jargon
    The word “days” as opposed to “net” will get you paid more often and faster.
  • Late payments fees
    Threatening your clients with interest on late payments does two things. It gets you paid slower, but also ensures a higher percentage of invoices will get paid.

Here is an example of properly worded invoice terms according to the study:

“Thank you, we really appreciate your business. Please send payment within 21 days of receiving this invoice.”

 

5. Invoice faster

This is fairly simple, but often overlooked. The sooner you invoice your clients the sooner they pay you.

This simply means that each time you are due a payment (usually on a deliverable) bring a paper invoice with you or email them one.

In almost all companies, they cannot pay you until they have a copy of your invoice for their own records.  So if they have your invoice, they can start the process to pay you, or maybe even pay you right away (especially when they’re really happy with your work).

It’s important to note here, that being able to create invoices quickly will really help you implement this tip – it’s best to use one of the many invoicing services available online.

 

6. Be crystal clear with your description of work

Be as clear and specific as possible on your invoice. Do not use any industry jargon in your product or service description on your invoice.

If your client does not fully understand what they are being billed for, then they are less likely to sign-off on the invoice.

For example, Instead of writing “website” in the description, use something more specific such as “12 pages of HTML design and development including a contact form and a site map.”

 

7. Follow-up

In a perfect world, all invoices would be paid within minutes. Unfortunately, it’s not a perfect world. The truth of the matter is that invoices can typically take anywhere from three to twelve weeks to get paid, and that can be a very long wait for a small business – remember, it’s all about cash flow. This is why every freelancer needs to have a follow-up strategy for invoices.

Consider using an invoicing solution that allows you to quickly identify outstanding invoices through an easy to access dashboard or report.

This saves you a lot of time, and helps identify clients that you need to follow-up with immediately. It’s best to set aside a block of time each week for you to contact clients that have outstanding invoices.

Sometimes a quick email reminder can do the trick, but don’t be afraid to give them a call if your emails go unanswered. When it comes to calling, you’ll want to know your client’s schedule. This will make it much easier to reach them instead of playing phone tag.

 

8. Letters and legal

Going to small claims court is always an option when things are going really bad, but it’s likely not worth your time and expense to collect on small amounts. It’s best to try as hard as you can with formal letters. If this fails, consult a lawyer to first get advice, and then have them send out a letter on your behalf.

The letter should state that you have exhausted all other avenues and that if you do not receive payment within a set amount of time, you will have no other recourse but to take the matter to court. This is often enough to secure your payment, and is a much more cost effective method than taking the client to court.

But let’s hope you’ve developed a strong client relationship through constant communication and by offering a great service, so that you never get to this point.

These strategies will help you get paid faster, spend less time chasing customers and give you more resources to continually grow your freelance design business.


This post was guest written by Darius Bashar, a former freelancer who now works at FreshBooks.com. FreshBooks is an online invoicing service that helps designers spend less time worrying about billing and more time doing what they love.

Do you have tips or best practices of your own? Please share them in the comments section below.

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  • http://www.webguide4u.com Vivek Parmar

    thanks for sharing this tips. One question though what if client does not respond to you or do not offer all the details you need while working on his project??

    • http://www.freshbooks.com Darius Bashar

      Hey Vivek,

      Darius from FreshBooks here. First off thanks for the kind words, I am glad you enjoyed the article.

      One way around clients that do not get back to you with regards to content for the project or revisions on your work is to create a work-back schedule that outlines when all key dates and deadlines are for the project. That way you can include a deadline for them to get you the vital content as well a time frame fro them to get back to you with regards to feedback. I would also include a payment term that says the second payment is due x days from the begin of the site. That will put some extra pressure on the client to meet the deadlines they are responsible for.

      Cheers and happy invoicing!

      Darius

  • http://www.27graphics.com 27 Graphics

    Great article – I’ve bookmarked it :)
    In the past I have came up against payment issues and have learnt to be firm when it comes to it. I tend to invoice as soon as a project is done so that I get paid sooner and the whole thing finished. I’m also in the process of fine tuning my terms and conditions which will spell out how I work, payment terms etc. A copy of this will be sent with every quote so potential clients know the deal from the word go.

    • http://www.freshbooks.com Darius Bashar

      Glad you enjoyed the article. Agree on sending the invoice as soon as possible and it is really smart that you have incorporated it into your work process.

  • graeme

    Great article, but maybe you should have included number 9. Don’t get ripped off by the people your are working ‘with’
    I have now done several sites for a ‘friend’ who still hasn’t paid me, and any time I bring it up he fobs me off with his problems. Looks like I’ve lost a good friend over money.
    Not good, not professional and not nice.
    Shame the color of money is what everything comes down to in this life.

    • http://www.freshbooks.com Darius Bashar

      Hey Graeme,

      I have worked with many friends in the past. What is important is that you treat them exactly the same way you would treat a normal client. As a professional you always want to bring your very best to each project and where things get tricky is when you take off your professional hat and start making exceptions for friends.

      You think you are doing them a favor by being more lax with the project, but really it is not in their best interest either. You will have less passion and be less creative and ultimately the project will not be all that it could have been if your heart was fully into it. Hard to stay passionate when you feel like you are being ripped off.

      Just my 2 cents.

      Sincerely,

      Darius

  • http://creativeaddict.co.za Lisa

    I am a web designer and I never wait for payments… I will not start work until the deposit (33% of estimated quote is paid). Once the website is complete, they can proof it, and I do not put the website live until the outstanding payment has been settled. Works like a charm.

    • http://www.freshbooks.com Darius Bashar

      Everyone has a preference and what’s important is that your strategy is working for you. Personally, when I was freelancing I would not start unless I had a 50% deposit. I found this also ensured the client was serious about the project.

    • http://www.andycampbellcreative.com Andy Campbell

      @Lisa : You’re spot on. Delivery of files is the only leverage we freelancers have. It’s fascinating how quickly your client will process a check when they know they can’t get something they desperately need until they’re issued. I also agree with Darius that 50% up front is reasonable — I’ve never had a client give it a second thought (they expect it) — and it makes the math easier.

      Great article, Darius.

  • http://www.pxmag.com Tom Nagel

    Great article. Regarding the first tip (“Manage expectations from day one”), I would go a step further and say that it’s imperative to have a contract.

    Although it’s best to consult an attorney, Nolo has some great resources for those who don’t know where to get started.

    Legal Guide to Web & Software Development (book):
    http://www.amazon.com/Legal-Guide-Software-Development-CD-Rom/dp/1413305326/

    Website Development Agreement (e-form):
    http://www.nolo.com/products/website-development-agreement-PR177.html

    • http://www.freshbooks.com Darius Bashar

      I would 100% agree with you. It not only projects the freelancer, but it also ensure you and the client are on the same page with regards to all terms, deliverables, and timelines. It prevents future misunderstandings.

  • http://www.fldtrace.com Lucian

    This tips will definitely help you get paid. In 2 years of full time freelancing and I only had two clients not pay some smaller sums.
    I would add to article, that sometimes you need to follow your intuition when you pick your new clients.

  • http://mtacreative.com MTA Craetive

    I found that enabling clients to pay by credit card helps tremendously.

    I set up a Google Checkout account & linked it to a Google Docs spreadsheet. You can add a single item for your client for their invoice amount, give it an inventory on one, and you’re off to the races. It helps to name the item after hte project & client, ex: “Jan 2011 Email Design for ABC, Inc.”

    Simply send your client a link to your checkout page, give Google their cut, and collect.

  • http://www.abdpromotions.com Cheryl Ellemberg

    Great advice and really interesting comments. Getting a good process financially is vital for business! We focus on deliverables and payment together – hand in hand. Be SMART -Specific, Measureable, Accessible, Realistic and Time-framed. Thanks for posting!

  • http://www.brianbatesd.com Brian

    Great article. The notion of invoice early and don’t use jargon is spot on.

    Another thing that has proven to be crucial in my experience is to request a down payment before starting any work. Requesting roughly 50% up front motivates a client to be invested in the project as well as motivates the designer to get things done knowing that they are sitting on a payment already.

    This can also help if things such as web hosting, stock photography, stock icons, etc. need to be purchased by the designer before the final billing occurs. That way you’re not stuck with initial costs while waiting to receive payment 30 days from completion of the project.

  • http://www.connected-design.co.uk Simon Fletcher

    Great article definately going to implement them into my business.

  • http://www.cblu.net Paolo Certo

    I’m agree, this is the right way
    to help me in this dirty business I use x4todo
    simple and effective

  • http://www.freshbooks.com Darius Bashar

    Hey Vivek,

    Darius from FreshBooks here. First off thanks for the kind words, I am glad you enjoyed the article.

    One way around clients that do not get back to you with regards to content for the project or revisions on your work is to create a work-back schedule that outlines when all key dates and deadlines are for the project. That way you can include a deadline for them to get you the vital content as well a time frame fro them to get back to you with regards to feedback. I would also include a payment term that says the second payment is due x days from the begin of the site. That will put some extra pressure on the client to meet the deadlines they are responsible for.

    Cheers and happy invoicing!

    Darius

  • http://www.regalweb.biz/ Neuee Perez

    I agree, a strong relationship is definitely your best bet
    and maybe the client is even willing to give you a bonus :D

  • Mark

    Maybe my line of work is different in that I provide retouching services and usually a single file as a deliverable, but if you use something like Quixly, or, I think Paypal has a similar service where I just upload the file, give it a price, and when the client wants to retrieve it they pay for it and download their file. This seems like such an easy solution that eliminates invoicing and waiting. You can certainly email the details of the project if it is something larger or more involved, then just let them know the final files are ready for their download.

    • http://www.freshbooks.com John Coates

      Hi Mark,

      Holding back on a deliverable can for sure work to get paid, it’s just getting the confidence to do it. However, the client needs to know this is how it is going to work – it’s all about client expectations so they know they need to pay upfront. But as you say, it really depends on your line of work.

  • http://logorium.com Andy

    Nice article. Definitely going to help freelancers and small businesses.

  • http://www.planetbt.com T B Illustrious

    Sometimes for small amounts its not worth going legal … SO get a 75% advance before starting work !

  • Marco

    And what about those clients who tell you a lot of fantastic stories like “I’m sorry but I was tryng to send your payment, but there was a blackout” or “I sent the payment yesterday but I made a mistake writing your bank account details” or “I’m sorry but I have not internet” (So you are writing me this email through another dimension?!?).
    Happy to know that this is a worldwide issue. Here in Italy is becoming unbearable, sometimes I have to wait 4 months more than the agreed time limit.

    Thanks for the interesting post.

  • http://theLBCC.com Joe

    I provide all of my clients with long term support after the site design/application development. It keeps the relationship going, it keeps my portfolio up to date and effective by being the one to handle all of the client’s eventual updates, and I am very motivated to ensure that my client is always ridiculously happy. I spell out the payment terms for this contract and break down the penalties very clearly (in bold, even!) in the last section before they sign. They get 3 gates for missing payments. Gate 1 (let’s say 10 days late) gives them an email follow up and phone call, Gate 2 (let’s say 20 days late) interrupts their access to the administrative panel of their applications, and Gate 3 (30 days late) results in their website directing all users to an ‘under construction – we’ll be right back’ message. I’ve never had an issue with a client complaining about this schedule, and I’ve never had to implement Gate 3.

    • http://www.freshbooks.com John Coates

      Hi Joe,

      That’s an excellent way to do things – I could not agree more. And never implementing Gate 3 is a real achievement!

  • http://www.sonnydesign.com sonnyd

    great article! this is very helpful specially for a start-up business or freelance work in design. thanks for the head up.

  • http://www.coroflot.com/ChrisLauriaDesign Chris

    Great article! Thanks for sharing.

    I’m a freelance toy designer for 19+ years, and I found many of your comments are spot on. Since I am unable to hold work “hostage” like a web designer can, I try to stick with more stable clients. I know many artists (especially younger ones) are just happy to receive a job from a new client, but I make it a priority to ‘check them out’ before accepting any work. Particularly from an “unknown”. Try to build a network of financially solid, stable clients. For me, I know a company like Hasbro or Fisher Price will be around for a while, and can pay their bills.

    The only issue I have is not that my clients can’t pay, it’s just that some of the product managers I work with drag their heels submitting paperwork that is needed to process my invoices. Many of my clients send me a PO# after I send an estimate. But most of the time, I have completed the job well before I receive the PO#. It’s only after a couple of weeks waiting for the PO# do I realize that the product manager never submitted the estimate in the first place. Now I have to wait longer for the PO#, then send the invoice and wait the standard 30 days. There is no standard wait time to the PO#. It can be anywhere from a week to two weeks.

    Aside from being a nuisance, Any advice to help ensure the process does not break down?

    Thanks!
    – Chris

    • http://www.freshbooks.com John Coates

      Hi Chris,

      That’s always a touch situation. It’s best to keep on them and follow-up to make sure the process is moving along – constant reminders to the client can really help here. Also, get the paperwork started as early as possible, so you get paid faster!

      • http://www.coroflot.com/ChrisLauriaDesign Chris

        Thanks John – good advice. Over the past few months I’ve been making an effort to do just that. It’s no guarantee, but it helps. I guess the root of the problem is nobody likes paperwork – designers or clients.

  • http://campbellironworks.com Norman Campbell

    Having run a business of one kind or another for over 25 years there are a few things I know to be pretty close to facts.
    I do not offer terms, that is what credit cards are for. If Visa or AmEx do not think you are a good risk, why should I.
    Open a credit card account. 2-3% is small change in comparison to loosing sleep worrying about getting paid, spending days chasing down bums only to get stiffed, and if your fortunate enough to build a big enough company, hiring an employee to herd cats which is what getting money out numerous clients can be. Also you don’t need to have a card swipe machine or any special equipment, you can call it in by phone to a service, your bank can set this up for you.
    Be hard core on your pricing, figure out how much you need for a job and try to get paid in full, up front. Thats why you want to accept credit cards. People are a lot more comfortable paying first if they can call their credit card company and dispute the payment if you do not come through with the job.
    If you can’t do that, do not, I repeat, do not do any work without a 50% deposit.
    The down side to this is unless the scope of work changes drastically, it’s hard to ask for more money later on. It’s also poor business practice to hit someone with a big bill they were not expecting, or have a job they already have a considerable sum of money invested in and may not have started if they could not afford it in the first place. So you will have to take your hits occasionally. Remember the best customer is a repeat customer. You will quickly get a reputation as a stand up girl or guy if you do this.
    So really sit down and work on your pricing. I know, your a creative person how can you possibly know this. Try to remember, or better yet make notes on how profitable a previous job was. When pricing new jobs try to compare it to an old job and decide if you were happy with your profit margin, if any. I like to run it two ways, the previous described comparative method and the day rate method [it takes one day to do this, half a day for two people to do this, etc.]. I assume you know your day rate. It helps if you have a partner or associate to do this with since you are an optimist [you did do the totally nuts thing of starting your own business after all] and may think something can be accomplished quickly which in the past has taken days.
    It’s basically three rules, if you follow them you will probably have way fewer gray hairs than me since I had to learn them the hard way.

  • http://www.spacebydesign.co.za Silvia

    Hi Darius, when we bought the Interior Decorating business 5 years ago, they did not have good structures and following up procedures, for this reason at that time the list of debtors was frightening, slowly we implemented new ways of working and I can say we are very successful today getting paid by our clients.
    All your 8 points above are excellent and definitely must be followed by all industries big or small.
    I will say that the most important of all is COMMUNICATION, if you keep your client informed about the progress of the job and respect his or her anxiety to see the end result making them part of the developments, they will do the same to you when it comes to your anxiety to get paid for your good service and the manner you conduct your business.

  • http://www.lookatdan.com Dan George

    This is one process I never really put alot of thought into, but in theory it should be your main priority! Great article!

  • http://www.footsteps.nl Gerwin van der Feijst

    Since a few years we let the client pay 1/3 of the total fee up front. The fact that we are in business for 15 years helps a lot. When a customer is slow with the first payment or is unwilling to comply with our terms it gives us indication on how the future payments will go. The next 1/3 has to be paid when we deliver the project and the last 1/3 is on a 30 days net term.

    For freshly started designers i just would like to say; be friendly but firm.

  • Amit Tiwari

    Very Nice Article Derius,
    The best part is when we do invoicing and it sometimes give me a feeling, Am I charging too much ?

    Because I do invoice in late time. But now understood the difference of communicating/interacting with the clients even when you achieve something smaller.

    Thanks bro.

    Take care & have a wonderful evening.

    My best regards,
    Amit Tiwari

  • http://www.emlakkulisi.com istanbul lounge 2

    Great post, this is always a subject that requires more attention to understand, and sometimes we stay all
    confused by all this complicated thing, but you´ve this a little easy to understand, thanks