Getting clients to pay on time is a challenge for many creative people. And the challenge can harm any business if not dealt with proactively. Since we have worked with many clients to help them get paid by their clients, we wanted to share a few tips with you on getting clients to pay on time.
Getting Clients To Pay On Time: Our Favorite Tips
Value The Work That You Do
First, value the work that you do. When you value the work that you do, you will find that getting clients to pay on time is much easier because the right tone will be set. People pay for things that they value, and if you undervalue your work your clients can sense that.
This plays out in your interactions around money. When you value your work, you will have less hesitation about billing clients on time or billing the full price of your work. It will also make it easier to be upfront about price. We have seen that when you value your work, it is easier to be upfront about expectations. When you are upfront about expectations, there is less chance of a dispute.
Set Clear Expectations
One of the best means of getting clients to pay on time is to have a good contract. Why? Because contracts help everyone set clear expectations. When expectations are clear, there is less chance of a conflict. Contracts are tools, not weapons. Tools that every business needs to know how to use.
At the very least, a good contract will set payment terms and timelines. You would be surprised at how many smart and creative people do not have this in clear writing when they do business. And they learn the lesson painfully when things go awry.
And a good contract goes beyond that to set out all the key terms in a business relationship. It provides a clear reference for everyone to use so that if there is a question about what is to be done and for how much, there is a place to find the answer. You might be surprised at how effective this is at resolving payment conflicts before they begin.
So don’t be afraid to use contracts with your clients, at the start of the relationship.
Make It Easy For Clients To Pay
Many businesses make it difficult for clients to give them money. Sounds crazy, but it’s true. If the only way that your clients can pay you is by physically signing a check, putting a stamp on an envelope, and then putting it in the mail, you are making it difficult for them. Why not make it easy on them?
Many businesses accept online payments for goods and services. If you are not already doing so, you should look into it. Nowadays, payment processors like Stripe are easy to use and configure and the costs are reasonable.
Making it easy for clients to pay is a key part of getting clients to pay on time because it cuts down on issues that arise from the simple difficulties of writing a check, finding a stamp, going to the mailbox, etc. If you can remove those obstacles from your clients lives, you are making it easier for them to pay you.
BONUS: Make it easy for clients to sign your contract. Long gone are the days when you had to mail or fax contracts back and forth to get them signed. Now there are many tools such as Docusign or AdobeSign that allow you to send contracts to be signed electronically. These electronic signatures are valid in most cases. Getting things signed electronically takes the pain out of the contract process.
Include Leverage In Your Contracts
It is true that having a good written contract will help you to avoid conflicts. But sometimes, problems arise. In this case your contract will become helpful to ensure that things work out for you. To make this happen, your contract has to have leverage.
By leverage, we mean that your contract should aid you in getting clients to pay on time when they may need a little…encouragement. Two common forms of leverage that creative people use: intellectual property rights and attorney fees. There are more, but since these are the most important, let’s discuss.
Intellectual property rights can provide you with leverage because you can include a term in your agreement that makes it clear that no intellectual property rights transfer to your client until you have been paid in full. Typically, when a creative person does work they are creating a copyright in that work and part of the deal is that the client gets to use that copyrighted work. So that means that your contract should clarify that if your client does not pay you, they have no right to use the work that you created for them.
We have found this to be a very powerful tool for our clients.
Attorney fees give you the leverage that you need. An attorney fee clause says that if there is a legal dispute, the prevailing party has the right to collect attorney fees from the other party. That means that if you need to take your client to court to collect unpaid fees, they could be on the hook for the cost of hiring an attorney. A note of caution: an attorney fee clause can often be a double-edged sword. This is why it is good to speak to an attorney before including one.
Fix Conflicts Early
We found that the longer a conflict goes on, the more difficult it is to fix. This goes for getting clients to pay. If there is a conflict about payment or what’s owed, you want to resolve the conflict early on so that it does not needlessly escalate and add expense and frustration to an already difficult situation.
Talking to an attorney early can help. Getting perspective from a professional who has seen these situations many times before clarifies your options and legal position. Having this clarity goes far in getting things resolved in a way that benefits you.
Keep in mind that contracts solve a lot of problems. By setting everything down in writing, it becomes easier for everyone to refer back to what has been agreed upon. Relying on memory or good intentions is a mistake.