by Jessica Oman
It’s a common plight of people who are new in business: charging the right prices, and then actually collecting the money when you ask for it. That second part can sometimes be a lot more difficult than it seems.
After all, if someone tells you they want your services, and they agree to your price, they should be willing to pay, right?
Not always.
The easiest way to make sure you get paid for your work on time is to have a clear, strict payment policy in place, and then make sure your clients agree to it in writing.
It can be hard to ask for money. We want to give our clients the benefit of the doubt. We want to be nice. We want them to know that we trust them. But consumer psychology works in a different way – subconsciously, they’re thinking that if you didn’t tell them exactly how much to pay and when to pay it, then they can pay it whenever they’re ready. And for some people, that’s months after you delivered the service. For a small percentage of clients, that’s never.
And you don’t want that. Because delinquent accounts make you frustrated, annoyed, and they make you want to bang your keyboard until it breaks, pour a glass of red wine all over it (save some for yourself, though) and curl up in a little ball of anger and wonder why you ever got into business in the first place.
So, it’s important to get really clear on the following things:
1) When payments are due
2) What happens if the client doesn’t pay
3) What payment methods you accept
4) Whether you absorb payment processing fees or not
Decide what works best for you. Then tell your clients what your policy is – and tell them before you start any work on the project. Then audit your own policy at least once a year: Did you have any trouble getting paid? Did multiple clients have the same questions or concerns about your policy? Was your policy adequate for your own cash flow needs?
Your payment policies will probably evolve as your business matures, and that’s absolutely fine. Just make sure that every time you make a change, you’re crystal clear about it – and you stick to it. Your clients will love it because they’ll know exactly what you expect from them, and it will allow you to focus on why you’re in business in the first place – to help people solve problems they don’t know how to solve on their own.
A firm and effective payment policy can be quite empowering. Are your clients clear about how and when to pay you? Let me know in the comments.
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When Jessica isn’t busy helping her clients start and grow businesses that earn them a 6-figure income, she’s road-tripping in the USA with her hubby and pooch, or developing her appreciation for a good West Coast IPA. You can find out exactly how she turned $200 into a 6-figure business in two years, and how you can do the same thing, by clicking here.
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