How to Ensure Prompt Payment from Your Clients

In the excitement of finishing a big job, it's easy to forget that the most important part of the project is when you get your paycheck. Taking the time to outline payment terms before you start a project helps to establish a relationship with any new client and increases your chances of getting paid on time. It pre-empts any misunderstanding about payment expectations and eliminates nasty surprises throughout the project.

Knowing a client's payment policy before you begin or agree to start a project allows you to charge accordingly. Your new client might already have an established policy for how soon to pay invoices, with a schedule that can vary as widely or take up to 90 days.

Some corporations will issue "purchase orders" (documents authorizing payment) for each expense. Purchase orders are usually for set amounts and need to be cleared by their accounting department before processing. Read all purchase orders carefully as it may limit the amount you'll be paid, and if it turns out that your fee exceeds this, you might have to submit an invoice each time in order to be paid. This may sound like too much of a hassle, but it may actually ensure you get paid sooner. Especially with large companies, smaller amounts are usually processed much faster than larger ones.

Make sure you outline the project and payment expectations before the project even starts. Create a written contract, signed by both you and your client, after you've been given the job. This contract should define the extent of your work, outline related costs, and deal with terms of payment.

Establish a policy requiring partial payment ahead of time-believe it or not, this practice is becoming more common to the point of being expected. The payment is usually based on part of the estimated project fee. This will also help postpone any out-of-pocket expense that occurs during the project. Written agreements should address any and all terms regarding edits or revisions. Two or three rounds of revisions are normally included in the price of a project, but you can adjust the agreement if you expect there to be more.

If the project is ongoing, the contract needs to have a due date for each payment. Once you determine the extent of the work, make a payment schedule that you and your client can agree on, and then have them sign it. It isn't uncommon for projects to take longer than first expected, which can be an especially tough challenge when you bill per hour. To avoid trouble, keep your clients up to date about the time you have spent working for them; this makes it easier to renegotiate an estimate if the time comes.

With any luck the client will be utterly dazzled by the speed and efficiency in which you completed the project, prompting them to pay you immediately. If this doesn't happen and you've decided to wait until the end of the project to send the bill, consider giving your client some motivation to pay you at the project's end. This could be in the form of a small discount, either on what you've just completed or on some future service. You can also offer a discount on bills that are paid within 10 days of receipt. The prospect of saving money does wonders in expediting the payment process.

With these tips, hopefully your days of waiting at the mailbox for hours on end will be over.