The Upside

Here’s How to Get Paid on Time, Every Time

Ever have a client who paid you late? Or worse, not at all? 

Let me be clear: there are zero scenarios where this is OK.

Oftentimes clients are simply disorganized or aren’t prioritizing your payments.

Sometimes, they are genuinely strapped for cash.

And once in a while, clients take advantage of you being a small business, knowing you have few options if they don’t pay or if they pay late.

Inside The Upside community, we dive deep into each of these scenarios through weekly Office Hours, Masterminds, and conversations on our community platform. After hearing it all, here are my top tips for making sure no invoice goes unpaid. 

Prepare In Advance

Think about what you can do in advance to mitigate your risk of non-payment or late-payments. Some ideas and policies to consider are:

Require upfront payment before any work begins.

Whether it’s an upfront monthly retainer or a 50%+ portion of the project fee, ensure you’re paid before any (and I mean any) work begins.

Consider accepting credit cards to eliminate invoice/payment turnaround time.

You’ll incur a 3% fee; however, it might be well worth it if you consider the cost of your time if you need to follow up on late payments. Also, you can just raise your prices by 3% to cover any of those pesky credit card processing fees.

Implement a click-and-pay button on your invoices.

The simpler it is for the client to pay you, the quicker you can get paid. 

Implement a 5-day max due date for all invoices.

Personally, I pay all of my invoices on day 1. But the larger the client, typically the longer the payment turnaround time. 5 days is more than enough for most small-to-medium-sized companies to process a payment.

For large companies with standard net-90 or net-60 payment terms, negotiate net-30 terms–minimum.

The decision-maker (your contact) typically has the power to override red-tape terms on your behalf. No independent contractor should work for two or more months without getting paid. 

Know who pays your invoices and get their direct contact info before work begins.

Relationships matter. Get to know that person at the start of the engagement and even consider sending them a small introduction gift. A personalized mug or $25 Starbucks gift card can go a long way.

Follow-Up Every Day

You’re not being annoying or disrespectful by following up every day past the due date until you get paid. Remember, they are the ones who are late and in the wrong. Also, the squeaky wheel gets the grease…always.

Change the Rules

Chasing payment is a huge waste of your time and mental energy. If a client can’t seem to pay you on time, you have the right to change the payment terms moving forward. 

Stop Work

If they aren’t paying you on time, you have every right to immediately stop work and clearly communicate to the client in writing that you will resume the project once payment has been received.

Withhold Deliverables

No payment, no deliverables. Make sure you have something of value to withhold in the rare case that a client makes you wait (or chase) for final payment.

And One More Thing…

Because I know you’re thinking that I left something out, here’s one common tactic that doesn’t work well from my experience: late payment fees. 

As a small business owner, if the client decides not to pay the late fee, there is very little you can do to enforce it. Also, relationships are your lifeblood. Think about how a late fee will impact your relationship with your client. Late fees are great for libraries and credit card companies, but potentially overly aggressive for a consulting business that’s dependent on strong, long-term relationships.

To Your Future

I hope that this article helps you rethink how you approach getting paid. I promise that when it comes to getting paid, you have more power than you may realize!

Erin Halper

About the Author

Erin Halper is the founder and CEO of The Upside and the leading authority on independent consulting. Since launching The Upside in 2017, Erin has helped thousands of professionals transition from corporate life into consulting to achieve flexibility, autonomy, and a renewed sense of purpose in their careers.

Erin has been a frequent speaker at Columbia, NYU, Harvard, and Brown and has been featured as a leading future of work expert on dozens of podcasts as well as in Forbes, Business Insider, Nasdaq, Crunchbase and many more.

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