Do your clients have a nasty habit of ‘forgetting’ to pay your invoice? Here’s our Sole Trader, Freelancer and Small Business guide on how to get paid on time, 80% of the time.
DRAW UP A CONTRACT
A contract makes things legit and is definitely a must for all sole traders. Your contract should include the following:
- Scope and project details – this includes what format it’s to be provided in, exact details, revisions
- Fees (include deposits and late fees)
- Payment terms – i.e. how long before payment of your invoice is due; most freelancers specify ‘within 30 days’, but you can choose shorter or longer payment terms if you wish
- Payment method
Run through the contract with your client before you hit the go button, making sure you are both on the same page. Get them to sign the agreement to make it official, that way you have the original terms to refer back to should they decide to ‘lose everything in their inbox’.
If you’re worried about drawing up a freelance contract from scratch, there are plenty of templates online that can help you get started.
Charging a deposit upfront is a way to show you are serious about receiving payment for your work and provides some measure of security for both you and your client – it’s also very common across all industries so don’t be scared that you’ll scare off a potential job.
Deposits generally range from 30% – 50%, depending on your relationship and the nature of the work. Include details of the deposit and payment in your contract, and don’t start the work until the deposit is received.
As soon as the job is complete, make sure you’re sending off your invoice. The sooner it lands in their inbox, the sooner the dollars come flowing in. If your gig is project-based, it’s best to send off the invoice as soon as the final work is submitted, on the other hand: if it’s paid by the hour, you’ll need to work out how often you will be invoicing. Invoicing weekly or fortnightly is a safe option, especially if you want to keep the coins rolling in frequently.
SEND A REMINDER
Oh the dreaded, ‘just following up on my invoice’ email. If you haven’t received payment or if your client has ghosted you, you don’t need to wait around for your client to suddenly remember they owe you. Chances are, they won’t. If it’s now outside the specified timeframe, it’s perfectly fine to send a friendly reminder. If another week passes with no word, it’s time to follow up again, maybe this time with a phone call.
Sole Accounting App will stay on top of your invoices and your reminders, helping you see exactly what invoices are coming up and what is outstanding, so you know who to follow up and when. More on that below.
LATE FEE, WHO DIS?
One way to deter clients from being lax about your payments is by charging a late payment fee.
Details of this fee should be incorporated into the contract or agreement you drew up at the beginning of the job, so the client can’t plead ignorance when it’s charged.
It’s the breakup you’ve always wanted. As a freelancer, sometimes you feel like you need all clients. Any clients. After all, a late payment is still a payment, right? But sometimes, it’s just not worth the stress or the hassle – or the time you spend on emails/on the phone chasing.
SOLE APP CAN HELP
Designed to make accounting simplified, fast, easy and stress-free for Sole Traders, Freelancers, Self-Employed and Small Businesses, Sole App is an Australian Accounting App jam-packed with features to do just that. Including making invoicing and quoting easy – so you can get paid sooner and easier. Check out the full range of Sole App features, such as invoicing, supplier & client management features, finance tracking, income & expenses and more on our Features page. Or get started right away – download Sole App on the App Store (Accounting Made Easy – SOLE) or Google Play (Sole – Accounting & Invoicing Made Easy) and start your 30-day free trial to test it out for yourself.
Enjoy reading this blog? Want more tips, tricks and insights on business, accounting, finance or organisation, for Sole Traders, Small Business and Finance? Check out more in our Sole App Accounting & Business Blog.