It’s a strange and curious thing, but sometimes, even when you do great work, your clients or customers just don’t pay up.
I felt compelled to touch on this topic since I’m currently owed $2,500 in outstanding money owed from clients and friends. It’s a significant enough amount to get my back up as much of this is from several months ago and now I’m having to follow up.
There are a couple of payments that I’m going to write off as a lost cause that aren’t worth the time and energy to pursue. Others’ I know are good for it but dragging their feet due to financial burdens.
Either way it’s frustrating so how do ensure you’re not left short each month?
Are your expectations misaligned?
I’ve become a bit of a stickler for agreements, terms and conditions and non-disclosure agreements. On the few times I’ve not implemented them it’s turned out badly.
Take the web designer I outsourced some light work to and 9 weeks later and close to $400 bucks and I have nothing to show for it. He’s pleading poverty even showing me his PayPal account status – as in zero so as not to provide a partial refund to me – his client.
But even when you have systems set up to ensure you’re well protected you can still lose out. A client just paid me money that he owed from August. Even with a terms of agreement contract and a signed NDA we clearly were divided on what he expected I’d do vs what I delivered and we disputed the last payment . In that case it gets tricky.
Chief Alchemist Mark Simchock recently had to fire a client.
“ The guy was never available. Appointed me a third rate substitute resource to work with me (instead of him) and then eventually told me, “Your process was too stressful.”
The madness being whatever I recommended and/or requested one of them would dismiss. That is, they didn’t follow me process, they made up their own. But not based on best practices, etc. but based on what was convenient for them.”
Sound familiar? A bit part of getting paid comes down to setting expectations upfront.
Consultant Cadi Jordan recently had her first bad experience with a client that consistently avoided paying up for some research work she’d done. Her normal terms were payment in one week of invoicing. A month down the track and numerous follow up emails and phone calls she’s still not been paid.
“This is the first time that I have encountered this and am re-thinking the one offs for inquiries from further afield. If clients are local, it is a great way to try my services before you commit to anything further. I am weary of doing anything outside local again without a different policy in place.”
Normal business terms are 28 days although it’s up to you to set your terms of payment, for example many consultants charge 50% upfront and 50% on completion of the project.
How do you avoid not being paid altogether
There are solutions however and I reached out to get your thoughts on how you’ve dealt with it. The answers were great. Here’s a sample:
Mark Simchock has this to say:
“I make it a point to work in small iterative milestones and invoice as frequently as necessary. IMHO, invoices represent milestones and it keeps everyone on task as to what the matter at hand is.
In 2011 I’m making a resolution that all new clients understand, they are not paying for my time and/or knowledge per se. So they’re not paying for my time, they’re paying me for the time I save them.”
I like this idea of telling your clients how much they save by using you – whether it’s time, money, or from frustration and delays. Don’t quibble over your hourly rate – state why you’re worth it in terms of non-monetary value too.
Four proven tips for getting paid
B2Bee gave these great tips for collecting accounts receivable:
1. Confirm Satisfaction. Immediately after delivering your service, and BEFORE invoicing, confirm with your client that they are satisfied with your work.
2. Invoice Immediately. Don’t wait for the “magic” you created to wear off. Send the invoice immediately after confirming satisfaction.
3. Make the call. When the invoice becomes past due, don’t email. Call your client…..the person you worked with. Don’t call the accounts payable department. They don’t know, or care, about you. Calling sends a message that you are serious about getting paid.
4. “I Need Your Help”. The four most powerful words in business are, “I need your help”. Call your client. Start the conversation with these exact words. ”Jennifer, I need your help. I have not been paid. What do you suggest?” Think about your experiences when others have asked you for help. By nature, humans respond to requests for help.
5. Mindset. Have the proper mindset when collecting past due accounts. Remember, it’s your money! It is not unprofessional to ask to be paid.
Getting get paid on time
Ashley Bodi of Business Beware, a service that helps you get paid by clients who haven’t paid up, had this advice to give me:
One way to help make sure your business is successful is to pre-qualify customers. There are many different ways to do this and questions to ask them.
- Do they know what they are looking for?
- Do they understand your charge rate?
- Do they have any idea how long the job will take and cost?
One of the major problems businesses have are getting customers to pay promptly, completely or at all. If you pre-qualify this will help alleviate most of these problems.
Another is not knowing that you can Fire a Customonster!
A Customonster is a customer that past the point of return. An unprofitable, rude or just cannot be pleased. You all have seen and had these jerks.
Fire them and send them to your competitor! I always say keep your competitor’s phone number handy and give it out to that Customonster. Just think of the time you and your employees will have when you do fire that Customnster to give to your good customers! Profits and moral go straight up!
Now you’ve been paid go find your Red Carpet Clients instead!