Asking for Payment Successfully

By Josh Hoffman, Contributor, on July 19, 2017

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Asking for payment from clients, especially as a new freelancer, can feel awkward. But, if you don’t get paid, you won’t be in business for long. It’s imperative to put processes in place that’ll ensure you receive payment in full and on time. Here are the three processes I’ve used in asking for payment that have resulted in full, punctual payments from each of my clients.

1. Contractual Agreements

It goes without saying that every agreement should be in writing. But, simply stating the services to be rendered and payment to be made isn’t always enough.

To ensure full and on-time payment, I incorporate a few parameters into my service agreements, including a payment schedule and these two clauses:

  1. If there is no communication or activity from the Client for a period of 30 consecutive days, the Client shall pay the remaining balance irrespective of the terms of this Agreement; and
  2. Invoices not paid in full within 30 days of issuance may be levied a monthly late charge no greater than the highest legal percentage according to applicable laws of California and the United States of America.

I also include a road map of the steps I’ll take to complete the project, as well as an estimated timeline, both of which correspond to the payment schedule. In general, I ask clients to submit 50 percent of the total payment upon signing the agreement. This allows me to confirm that they’re serious about working together, and I don’t begin work until the initial half is paid. Usually, my payment schedule is divided into three phases: the initial down payment, the halfway point payment (after submission of one of my deliverables, like the first draft of a strategy and plan of action), and the final payment.

2. Multiple Payment Methods

Customer service is essential in freelancing, and offering clients multiple ways to submit their payments falls under the “good customer service” category.

At first, I only accepted physical checks and wire transfers. These were not only time-intensive and inconvenient, but delayed payment. Now, in addition to these payment methods, I offer credit card processing through Square, which accepts all major credit cards. Even though there’s a processing fee of 2.75 percent, the peace of mind is priceless (and you can even build this fee into your rates, if you prefer).

3. Automatic Payment

For freelancers who work on a retainer basis and establish the same recurring fee to continue services, it’s common (and highly recommended) to set up automatic payments. Square and FreshBooks are just two of many cloud-based programs you can use to set up automatic payment.

In this case, you’ll want to set up auto-billing on the first of each month, and bill 30 days ahead of time, in order to ensure that the client’s credit card on file is valid. For example, if you sign a client on May 22 for $1,000 per month, charge them a prorated amount for May (about $320), and then charge the full $1,000 on June 1 for the month of June. That way, you’ve successfully accepted payment before putting in a full month’s worth of work, and all you have to do is deliver the results and level of satisfaction you promised your client.

Running a business sometimes means navigating potentially uncomfortable situations, but you’ve got to get paid. After all, making it easier to get paid makes it easier for you to save. Taking steps in the beginning of a client relationship to assure payment will help keep payment stress at bay so you can do your best work and hopefully create a long-time client.

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