8 Tips for Freelance Designers to Get Paid Faster

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February 04, 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.

WDD Staff

WDD staff are proud to be able to bring you this daily blog about web design and development. If there's something you think we should be talking about let us know @DesignerDepot.

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