It is true, there is nothing better than being able to earn a living from the comfort of your own home. It gets even more ideal when you are working for yourself because you get to decide your own working hours and make your own rules.
However, this also means you are not only responsible for delivering work but are also in charge of collecting payments for your services and products from your clients.
Anyone who has ever done that will tell you that collecting payments is never an easy task especially from difficult clients who find different reasons to delay payments. There are a number of factors that need to be considered before you can ask or remind clients to make timely payments. One of the biggest risks is that you may offend and eventually lose your client. Therefore, it is very important that you have a sound and effective strategy for payment collection.
Here are some golden rules you could follow to remind your clients to pay on time without offending them.
Have clear terms and conditions
Before you start working, it is very important that you discuss all payment terms and conditions with your client. You must define things like payment schedule and methods in order to avoid any confusion.
Give them an easy payment plan
No one likes to spend money and when a client has to pay you in full, it is never easy. Therefore, before you start working you must offer your client a payment plan that is easier to follow.
You can do this by breaking the entire payment down into smaller installments. You could ask for an upfront, a mid-project payout and a final installment. These smaller installments could be easier for the client to manage.
Have a clear follow-up plan
Despite your early efforts, your client may not pay on time, therefore, now comes the time when you have to start chasing them. However, you must never start sending random emails to your clients; it is highly recommended that you chalk out a clear payment follow-up plan. It must clearly define when and how many emails, phone calls and faxes you must send before moving on to more direct recovery methods such as visits and legal action.
Send email reminders
Reminder emails are not just sent after the due date has passed. You can send a reminder email as the payment date gets closer. Make sure this email contains all the necessary invoices and payment details. Once the date passes, you should continue to send regular reminder emails. You must have a clear timeline/schedule for your reminders.
Do not get aggressive
Remember, the tone of your email will be very important; you must never use an offensive or a threatening tone. It is quite easy to lose patience and temper while handling difficult clients, but you must remain focused and maintain a neutral-to-friendly tone while sending reminders.
Have an automated reminder system
You can use an automated email reminder system which will save you time and effort you will otherwise have to spend on manually managing your reminders.
Pick up the phone
After sending all the scheduled reminder emails you should not hesitate to call. Your phone calls must be polite, to the point and regular.
Persistence is the key
Many of us believe that being persistent can offend a client; in many cases, it can; however, always remember, it is your right to ask for payment for your services. The key to being effectively persistent is to never lose patience otherwise you may offend your client. Stick your follow-up plan and keep sending your reminders.
Choose your clients carefully
Whenever you meet a new client you should always try to find out their payment history. If a client is referred to you, you must ask the middleman to provide you all the necessary information regarding the client’s payment habits.
In case you meet a client on an online marketplace, always apply to the jobs posted by the ones with a verified payment method.
These are just a few methods you can adopt to recover your payments. However, being a home-based freelancer, the risk of running into clients that do not pay at all cannot be eliminated. That is why it is best to work with a client who is referred to you from a reliable source.