7 Ways to Encourage Your Clients to Pay Fast

If you’ve ever waited and waited for a client to pay an invoice, you’re not alone. Nearly one-third of freelancers (31 percent) consider late paying clients to be one of the challenges of freelancing, according to a survey of more than 5,000 American freelancers commissioned by the Freelancers Union and Upwork. Fortunately, there are some ways to encourage your clients to pay invoices quickly.

Run immediately

Communicate with a high level of efficiency and professionalism by sending an invoice at the same time as your completed assignment. This makes your client more likely to repay.

Even if the client doesn’t pay by the due date, you should still receive payment faster than if you waited days or weeks before submitting your invoice.

Reduce your payment terms

Shortening your payment terms can encourage clients to pay quickly because shorter payment terms give your invoice a sense of urgency.

Many freelancers offer standard payment terms of 30 days. However, in some industries, payment terms may be 60 or 90 days or more. If you shorten your payment terms from 30 to 14 days, there is no guarantee that your client will pay you within 14 days but you may receive your payment within 30 days. On the other hand, if you offer 30-day payment terms, you may be waiting 45 days or more.

Avoid using words like “upon receipt” or “net 30” of payment. According to research conducted by cloud accounting company, Harvest, invoices that include these terms take longer than invoices that clearly state “30 days” or something similar.

Include specific payment terms in the contract

Define specific payment terms in every contract you have with your clients, so the client understands what is expected in terms of payment. Include the following information:

• Total amount payable in dollars or client’s country currency.
• Your payment terms are expressed as number of days.
• The amount of each installment and the date on which payment is due if the client agrees to pay in installments.
• A deposit or up-front payment of the exact amount before you start work, if agreed with the client.
• OTHER TERMS RELATING TO PAYMENT(S). For example, if doing a foreign bank transfer, the contract should specify whether the client will cover all international transfer fees or whether you will pay them half.

If specific payment terms are detailed in the contract, your client will be more likely to remember when payment is due and pay you accordingly. In case of late payment or payment dispute, you can go back to the original contract.

If you don’t already have a contract, download a template for a standard Hire agreement for work From the Internet, adapt it to your business and have a lawyer look it over before using it for the first time. Then, tailor this agreement to suit each individual project.

Request a deposit or installment

For long-term and high-value projects, it’s a good idea to request an upfront payment or a series of payments after certain key components are delivered. Making several small payments instead of one big one will help the client’s cash flow and make them more likely to pay installments on time. Also, they will want to maintain a good relationship with you while you manage a long-term project for them, so they will be more willing to pay you with each milestone.

If you’re working for a new client, they may not be willing to pay up-front, unless you’re recommended by people they know. However, if you are handling a second or subsequent project for a client, they may be more apt to pay a proportion of the project cost upfront because you have a proven track record.

A prompt payment discount or freebie offer

If you offer a small discount before an invoice is due, some clients will be encouraged to pay early to receive this discount. When calculating your rate for a particular project, include this discount in your calculation so that you are not out of pocket if your client takes advantage of the offer.

Alternatively, offer a freebie if your client pays an invoice early. Make sure the freebie will be valuable to the client but won’t take up too much of your time. For example, if you’re a freelance writer, you can offer a 500-word blog post for a client’s website on a topic you’re familiar with.

Don’t give up your rights until you receive payment

If possible, retain the right to use and modify your work until payment is received from the client. For example, if you designed a logo for a client, you would only show them the printed and watermarked version of the logo before payment. You then send the files that allow the client to use and modify the logo. This should encourage the client to pay as soon as possible.

To avoid misunderstandings, include a clause in your contract that states that files enabling the client to use the finished product will not be sent until final payment is made.

Get to know people in the client’s accounts department

Unless your client is part of a very small business, your invoice will be handled by someone in the accounts department. Therefore, it is important to find out who is responsible for processing and paying your invoices and develop a good relationship with them.

Ask your client for the contact details of the relevant account clerk or manager. Call the person and ask them if they received your invoice and if it contains all the relevant details. If the invoice has expired, contact them again and ask, politely and friendly, if there is a problem with your invoice.

Most freelancers have some clients who pay early, some who pay on time, and others who pay late. Do what you can to increase the chances of your clients paying you quickly. If one or two clients remain persistently late payers despite your best efforts, consider replacing them over time with clients who show that they value your work by paying you promptly.

Need a better invoice software? I highly recommend Freshbook.