If you have clients who don’t pay on time — or even one who’s notoriously late in settling up — you know what a hassle the invoicing process can be. Chasing down late invoices is a time-consuming process, not to mention an awkward one. Luckily, there are things you can do to prevent outstanding invoices from happening in the first place (and to tactfully handle the situation if they do). Here’s an invoicing action plan for getting paid on time, which is especially easy if you take payments with Square.
Set a clear, strict policy.
Before kicking off work with clients, confirm that they’re crystal clear on your payment terms. The terms should be reasonable — a 30-day payment window is pretty standard. If you’re providing ongoing counsel for a matter, consider requesting a retainer or some sort of upfront payment. Make sure to outline your policies in a written contract (a task you probably have down pat as a lawyer) that both parties sign off on before any work begins. Note that if you’re working with a larger company rather than an individual, it may have longer pay cycles (like 90 to 120 days). Being direct and clear about your payment policy before you begin working with clients helps avoid future uncomfortable conversations and confusion. And if someone is still perennially late, you can reiterate your policy before you continue further work.
Automate and streamline your invoicing system.
Keeping track of your paid and outstanding invoices can be a hassle, especially if you’re still using the file-cabinet approach. And when you have a full practice without an administrative department, it can be easy to lose track of whether or not you’ve billed someone, not to mention the status of each invoice. Implementing an online invoicing system like Square Invoices makes all this a whole lot easier. An online invoicing system centralizes things — which can help to reduce the time you spend on administrative work. You’re able to filter what’s been paid and what’s still outstanding, so you can quickly go in and follow up with people who need to settle up. Being on top of invoicing on your end goes a long way toward your clients doing the same.
Invoice quickly — and digitally.
It’s a best practice to invoice clients as soon as possible following your meeting. That way, it’s top of mind for them as something they need to take care of. Toward that end, it’s smart to implement tools and software that allow you to fire off professional invoices as soon as possible. An online invoicing app is extremely helpful in this regard. You can send invoices directly from your phone — from anywhere — right after your meeting with a client. That means if you’re meeting outside the office, you don’t need to head back to your computer to send out the bill.
Offer discounts for people who pay early.
If you’re in a position to do so, consider offering a discount (like a percentage off) for people who pay their bills early. This gives your clients an added incentive to pay quickly. You’ll bring in a bit less money, true, but it could be worth it to cut back on the time you spend chasing down late invoices.
Know when to cut ties.
At some point, enough is enough. If a client is habitually delinquent despite your best efforts to reiterate your policies, strongly consider ending your business relationship. Even if it’s a huge client, it might not be worth it. If you’ve been upfront about terms and have a contract in place, this conversation is less contentious. Professional, clear, neutral language is key in these types of exchanges.
There’s no way around the fact that dealing with late-paying clients is a drag. But with a few strategies and policies in place, you can make the invoicing process a lot less cumbersome. Take the first step towards invoicing risk-free with this Avvo-exclusive offer.