Making sure you are paid by your clients in a timely matter can be a pain.
Maybe you have a hard time asking your clients for the money that is owed to you.
Or maybe you just don’t have the time to chase down the money because you are too busy working on making more.
But you KNOW receiving the money you worked hard for is important.
After all,
If you’re not getting paid..
How are you paying your vendors on time?
How are you investing in growing your business?
Better yet..
How are you going to pay yourself?
If your vendors are consistently being paid late, they may drop you. If they are imperative to running your business this can lead to major problems.
If you’re not investing in growing your business, it may be harder for you to reach your business goals. I am continuously investing in my business to help better serve my clients, and in turn it helps to save me time or increase my income.
And the most important..
If your clients are not paying you, you are going to have a hard time paying yourself. Maybe this means you can’t take that vacation you desperately need. Or maybe it means you will be choosing between food and rent.
So..
Now that we know how important it is. What can you do about it?
Well I have a few ideas that have worked in a previous job as well as for my clients..
- Schedule Time.
- Have a process in place.
- Receive payment up front before work starts.
- Setup automatic follow up in QBO.
- Check in on your past due invoices regularly.
So let’s dive a little deeper into these and what they look like.
Schedule Time
Depending on your business model. If you are not invoicing, you are not getting paid.
If you are waiting a long time before invoicing, it could have a negative effect on your cashflow.
It is imperative that you are invoicing regularly. One way that you can ensure this is getting done is to schedule in time.
Make it non-negotiable.
You need paid which means you need to invoice.
Block an hour out once a week in your schedule to go in and invoice your clients.
If you find you need more or less time, adjust it. Just make sure you do it.
Put a Process in Place
We all know how important processes are to helping your business run smoother. Why not have one documented for your invoicing?
It can help you to know what to do when you actually go to invoice.
It can help you to know how you will receive payments. Do you prefer checks? Maybe you want to charge via ACH or debit/credit card. Find out what works for your business model.
How many days after the invoice is sent will it be due?
In accounting terms.. this is when you see “Net 30”, “Net 60”, etc. All this means is payment is due 30 or 60 days from the invoice date.
Maybe you even want it due upon receipt?
All of these should be laid out, so you know what to do in each scenario.
Receive Payment up Front
Or maybe just a partial payment upfront.
This can help to ensure you are at least receiving something if your client has a hard time paying you.
This won’t work for all businesses, but for service-based business it can be beneficial.
You get paid, and then you complete the work you were paid for.
If you decide to do this, you could also set up sales receipts in QBO and process payment with QB payments.
This way you will get paid automatically on a regular basis.
Automatic Follow Up
Tired of chasing payments? QuickBooks Online can do it for you if you have everything setup.
There is a setting in QBO that allows you to setup an email that can be sent to your clients when an invoice is due in X days and hasn’t been paid.
Or on the day it is due.
Or.. a X days past due.
Setting this up can be great because it reminds your clients that payment is due but allows you to not worry about sending the email.
If you do decide to take this route, just make sure you are applying payments to invoices on a regular basis. This way you are not emailing clients who have already paid.
Or you could just add to the email saying, “please disregard if a payment has already been made.”
Check in on Your QBO Account
This goes back to having a system and setting aside time in your calendar.
If you go to reports in QBO you can run the accounts receivable aging report and see what invoices are past due and how many days past due they are.
This gives you a list of the clients you need to contact in order to receive payment.
To make it even easier pre-write an email, save it, and then just fill in any blanks and send out to your client.
This will work best for clients who have not paid even after QBO has sent all the reminder emails.
Maybe something is going on in their life preventing them from paying.
I would check to see if we could setup a payment plan to make sure that invoice gets paid, or at least partially paid.
Something is better than nothing at all.
If any of this seems complicated to get setup, you don’t have the time to do it yourself, or you have a question please send me an email or schedule a free consultation with me and we can talk it over.
Let’s make sure you are getting paid for the work you are doing!