Best Practices to Get Paid
One challenge many contractors face is getting paid consistently. Often this is due to delayed invoicing. Sending our invoices sooner can ensure payment is not delayed due to confusion. Invoice while things are still fresh in the minds of your client.
Clear detailed invoicing
Striking a balance in the information can take some practice but reduces the risk of delayed payments. Too little information can cause questions from the client due to uncertainty of what is being paid for. Too much information can cause confusion from unclear details.
Standardize the format and labeling for invoices to increase legibility. Keep the content consistent and clear. Reference any estimates or quotes to help the client and keep business records organized.
Being able to show documentation of work completed can ensure payment comes sooner. Keep all timesheets, receipts and other related documents related to work done organized and recorded. It also ensures items completed are included rather than missed on the invoice.
Having documentation can assist in validating the work to settle any disputes that may arise.
Keep payment terms shorter, but reasonable.. Shorter payment terms also streamlines your cash flow. Using 10 or 15 day terms is acceptable for many small to medium businesses. Never accept payment terms that cause a burden to the business.
Unpaid invoices need follow-up with reminders. Invoices go unpaid for lots of reasons, from misplacement, not reaching the client, being overlooked, or questions not yet asked. Reminders give clients a chance to remember or ask questions.