What feels better than sending off that big, fat invoice to your client? Depositing the big, fat payment that you receive in return, that’s what! Sometimes, though, it seems like you’re waiting for that check for ages. Have you ever wondered if there’s anything you can do to get that invoice paid more quickly?
In this post, I’m sharing some of the tricks and tips I’ve learned over the years that help shorten the time that you’re waiting for the mailman to arrive with your check!
Before you even start:
While you are negotiating your contract with your client, be sure to talk about downpayments and payment terms. By requiring a downpayment of 25% or even 50% from your client, you are ensuring that you have the funds to purchase supplies and keep paying your own bills while you’re beginning the project. The sooner you start sending invoices, the sooner you are going to get paid!
Also be sure to ask your client what their standard payment terms are. It’s a painful surprise when you find out that they “usually” pay their vendors in 60 days! Before the contract is signed, ask if they can write better terms into your contract that mean faster payments for you.
Once a contract is signed, be sure to make friends with your client’s Accounts Payable Department. Reach out to them to ask if they use purchase orders or require anything from you to be entered into their vendor system. Is there a vendor profile form that you can fill out? Do they publish any specific invoicing instructions? Just like a Boy Scout, being prepared for invoicing your client will ensure that your invoice isn’t held up by unnecessary red tape!
While you are chatting with the Accounts Payable Department, ask about the possibility for electronic payment. If they offer payment via ACH, be sure to provide your banking information in whatever format they need. No offense to the postal carriers out there, but I love it when money is magically deposited into my account!
At the end of the work:
If your client does have an Accounts Payable Department, be sure to ask your client if they need to review your invoice before submitting it officially. I can’t tell you how many times an invoice has been held up because of miscommunication. Finding out the way your client prefers to receive the invoice will ensure that it is processed as quickly as possible.
If you have been issued a Purchase Order, be sure to submit a copy of it with your invoice. I also include a copy of our IRS Form W-9 with the first invoice to each client to ensure that they have everything they might need to enter us as a vendor into their system.
After a day or so, follow up with the person that received your invoice. Ask them if they need any additional information in order to process the invoice. You never know until you ask!
If you client does not have the ability to pay electronically, you can offer to accept payment via PayPal, which allows your client to pay by credit card. Just remember that PayPal charges a fee of approximately 2.9% in order to process that payment for you. Ouch! Only you can decide if that faster payment is worth the cost.
By following all of these tips, I have helped clients bring their Accounts Receivable under control and bring more cash into their business. It’s not rocket science, but every little thing helps in keeping the payments coming in. Try out a couple tips or try them all and let me know what helped you! If you’re just too jammed to even think about this stuff, maybe it’s time to hire a virtual bookkeeper?!? Let’s chat 🙂
Do you have any questions I haven’t’ covered? Leave a comment below to let me know what you think!
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.