Cash flow is king when you are self-employed so make sure you have strong collection practices.
By Henry Brown
As a freelancer or a small business owner, it can be incredibly hard to make sure everything about your business is running smoothly. This post isn’t going to be long enough to cover all the challenges you face, but instead it will discuss one issue freelancers commonly face that can quickly put you out of business: not being paid. Hopefully, once you’ve read this, you’ll never find yourself chasing invoices or shouting into the phone again.
Most of the work you have to do to ensure you’re paid happens before you even start work. And, in fact, one of the more important parts happens before you even find your clients. The sites and resources you use to find people to use your services will have a big impact on the likelihood of proper payment. For example, if you only work with people on a personal level, you’re much more likely to be paid than someone who finds their customers on Facebook. It doesn’t stop here, though. Once you have customers, you need to make sure they’re signing a contract that details the work you will do for them before it begins. This ensures that you have some protection in case something goes wrong.
Once you’ve completed the work, you’ll be ready to receive payment for it. A lot of how you handle this will be down to your own policies and practices. But, most will send an invoice and an email detailing exactly what is being asked for and what work has been done. To do this correctly, it’s best to use an invoice payment system. This sort of tool can help you to monitor payments going in and out of your business, showing you when customers have seen invoices. Having this sort of resource behind you can be an excellent way to ensure all of your invoices are compliant and make sense to the user.
One of the major benefits of putting this sort of effort in isn’t that it will guarantee you get paid. But, instead, it will protect you when people refuse to pay. Without a contract in place, there’s no way to prove that you made an agreement in the first place. Of course, depending on the type of content, this would mean that you own whatever you have made, not the customer. But that doesn’t help you to make sure you receive what you’re owed. Of course, a court won’t do anything if you’ve never sent an invoice. So make sure you’re sending out invoices in a timely fashion. Unfortunately, some people will try to avoid paying people in the hope that it won’t be worth it to the freelancer to pursue it legally.
Hopefully, this post will give you a good idea of what needs to be done if you want to take some of the risks out of working for yourself. It’s crucial to make sure that you always work hard at areas like this. A lot of people don’t understand the importance of strong collection practices, and this puts their business in jeopardy.
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Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.
