How do you get paid from your clients?

So you did some work. How do you get paid from your clients? Here are a few of my tips.

In no way should this be considered legal advice. If you need that, please consider my friend Rian Kinney and eCommLegal.

My Collections Background

Collections is where I started in my adult career back in 1991 when I worked at a Trucking Company. I was trained by my late husband who was an amazing businessman. Many of the techniques came from him. So, thanks Mercier.

As the Accounts Receivable and Collections Manager for Evans Roofing (2001-2006), I was proud of my record. I had less than 4.6% of my receivables over 45 days.

When I started my own business in October of 2017, I began offering a service on my secret menu. I will do collections for your WordPress agency for 20%. I had quite a few successes.

How do you bill clients?

In this case, my first question is how do you bill clients? For myself, and my former employer who is an advertising agency, I do no work until I get paid. So, that solves a lot of collections issues right there. I don’t bill by the hour, I bill by the service.

Don’t be afraid of the Phone Call

Call and ask for the Accounts Payable department. Be polite. Ask for help. Take notes. Accounts Payable professionals know that a list of accounts and their due dates is called an aging. You can say you’d like help getting it off the aging or getting it paid. I’ve had better success asking to get an invoice off of the report. 

“Can you help me? I’d love to get this off of our aging? Did you receive the invoice?”

Asking for help is not a sign of weakness; it shows empathy and fosters connection. Click To Tweet

Getting Paid By Clients Requires Prevention

Not everyone can pre-bill work. In that case, I believe in prevention. Let’s get the billing done in a way that prevents confusion and mistakes.

Mistakes were the number one reason why we weren’t paid on time at the roofing company.

  1. Do you have a contract? If you don’t, contact eCommLegal.
  2. What is the correct billing address?
  3. Who is the billing contact? It may not be the same as the development contact.
  4. What are the terms on your invoice? Is it prepaid, due on receipt, net 15, or other?

“But a well-written contract can be your best friend if worse comes to worst. While you could rely on your emails, a more formal contract will solidify the details of your agreement and take care of any potential ambiguities. An official contract will also be easier to interpret and refer to in the case of a dispute.” Pressable

Getting Paid Requires Sending an Invoice

It sounds crazy but you’d not believe the stories I’ve heard about people jumping the gun on client work without sending an invoice. While you’re at it, be nice. Thank the client for the work. It makes a difference.

Make sure your invoice is as clear as possible referencing the agreed-upon scope of work. It should have your contact information (phone, email, mailing address). If your work will be above $600, send them a W9 at the same time. This ensures the accounting department will not hold up your payment because they don’t have required paperwork.

“The first thing we noticed in the data is that when it comes to invoice payment terms, being polite really matters. A simple “please pay your invoice within” or “thank you for your business” can increase the percentage of invoices that are paid by more than 5 per cent!” Freshbooks

Getting Paid By Clients Requires Follow Up

You’re not a jerk because you’re following up on your invoice. The squeaky wheel gets the grease. Don’t be afraid to make phone calls.

Are you using accounting software like Freshbooks? It should have an aging feature and notification. Once an invoice turns 15 days old, it’s time to start contacting the client. It’s possible that the invoice from your accounting software didn’t hit their inbox (spam, junk). So be polite and ask them if they received the invoice.

Sometimes Getting Paid By Clients Requires Escalation

If this is true, you can hire a collections agency, a billing party, or reach out to people like me who do this on the side. Sometimes, a client needs to see a filled out small claims notice. Sometimes, you need to stop work. We did that all the time in construction. It’s fair to protect your boundaries.

Once an invoice is 30 days old, I start to escalate the language. Also, I keep records of when I talked to someone (via email, phone, chat, etc.) and what their response was. This helps so that you’re not rattled when they said they cut the check.

You may also consider physical mail.

Physical mail shows that you are serious. You have no idea if their email is working or if they're no longer employed. Click To Tweet

Also, cutting a check is easy. Mailing is is a different thing altogether. Don’t be afraid to ask for clarity. “Are you the right person to speak with regarding this account?”

Don’t Be Afraid of Small Claims

When it gets bad (90 days), I send a copy of the small claims form that I filled out. That way the client knows I’m serious. If it’s much more than small claims allows for your state, you can either consult your attorney or CPA. It may be cheaper to write it off as bad debt at that point.

Don’t be afraid of small claims. Most states walk you through the process online. Decide if you want to set your own personal boundaries. It’s okay. Really. I promise.

What’s the worst that could happen? You lose a client — a client who doesn’t pay.

Don't be afraid of small claims. It's about setting your own boundaries. It's okay. Click To Tweet

I’ve been to Small Claims twice when I was in roofing and won both times because of the contract. The judge said, “Did you agree to this work? Did they do the work? Did you pay? Then pay.”

Breathe. Bad debt happens.

Bad debt happens to us all. It’s a cost of doing business. But if you can stay under 5% bad debt, you’ll be golden.

  1. Make sure you’re sending the right invoice to the right person.
  2. Believe that you do deserve to be paid.
  3. Do not let the client bully you (scope creep).
  4. Stop work until you are paid. Be polite, but firm.
  5. Decide if you want to keep that client.
  6. Continue being awesome.
  7. I believe in you.

Below are some boilerplate examples you may use. Please use them. Get paid. Pay your vendors. Succeed.

Example Collections Emails

15 Days

Subject: Following Up on Invoice [Invoice #] from [Your Company Name]

Body:

Hi [client name],

I’m following up about Invoice [Invoice #] in the amount of [dollars] that was due [date]. Did you receive it?

Please let me know if you need anything further to process payment.

Kindly,

[Your name]

30 Days

  • Start calling the client if you haven’t already.

Subject: Past Due Invoice [Invoice #] from [Your Company Name]

Body:

Hi [client name],

Can you help me?

I’m following up about Invoice [Invoice #] in the amount of [dollars] that was due [date]. It has been more than 30 days which is concerning.

When I emailed you on [date], you said that [whatever the reason was]. Is this still the case?

I’d like to get this invoice paid.

Kindly,

[Your name]

45 Days

  • Start calling the client if you haven’t already.

Subject: Severely Past Due Invoice [Invoice #] from [Your Company Name]

Body:

Hi [client name],

I’ve written to you a few times about past due Invoice [Invoice #] in the amount of [dollars] that was due [date].

Unfortunately, we’ll have to stop working on this project until your account is caught up.

Kindly,

[Your name]

 

There are 5 comments What do you think? I'd love to read your thoughts.

What do you think? I'd love to read your thoughts.

Your email address will not be published. Required fields are marked *

  
Please enter an e-mail address

This site uses Akismet to reduce spam. Learn how your comment data is processed.