If you’re running your own consultancy business, getting paid late can have a significant negative impact on your cashflow and ultimately the viability of your business. With that in mind, here are our tips for getting paid on time as a consultant:
Invoice as soon as possible – when a project is complete and the client has signed off, send out the invoice immediately. The sooner the client receives an invoice the sooner they are likely to make payment.
Invoice regularly – for monthly invoicing, get into the habit of invoicing clients at the same time each month.
Invoice the correct person – check with the client who the invoice should be addressed to. If you’re unsure exactly who that is, give them a call – it pays to know the person paying the bills.
Keep track of debtors – diarise when payments are due using an electronic diary with a reminder. You can start chasing payments as soon as they become overdue.
Never let chasing slide – be persistent! If chasing emails aren’t getting results, phone the client to find out if there is a reason why they haven’t paid your invoice.
Be calm and positive – you have every right to ask for payment; the only reason you are telephoning them is because they are late with payment.
For persistent late payers – chase more regularly, perhaps every few days. If they’ve said they will pay by a specific date and they don’t, email or call again.
Re-evaluate your relationship with persistent late payers – if getting paid is a constant battle, talk to the client and ask what you can do to help, perhaps changing the frequency of the payment. Ultimately you may decide to ditch persistent late or non-payers, which is a shame, but if you’re spending hours of your time chasing them, this may be an option to consider.
More formal action – you may find occasionally that all the chasing in the world doesn’t do the trick and you need to consider more formal action to obtain payment, including possible action in the small claims court.
If you’re a consultant with us, we will help you do this, including drafting the appropriate letters and guiding you through the process and options, but hopefully if you follow the tips above, it won’t come to that!
If you’re interested in talking to us about becoming a partner with face2faceHR, do get in touch.