The first and most important thing is don’t expect to be paid on time. It is galling that for much of the time you’ll be waiting for money, you’ll be expecting money on a certain date and it won’t be forthcoming. That’s why people stay in jobs, the money is regular and the bills can be scheduled. When you run your own business there will be uncertainty as well as glorious freedom and entrepreneurship.
Consequently, it is vital that you insist on payment terms when you sign up a client. These can range from 14 days to 28 days to 30 days to some SICK instances of 90 days. Also, don’t grovel to your clients too much and even push for some form of pre-payment to set out the relationship. You’re as important to your joint undertaking as they are. Be bold, be strong.
Naturally the best deal you can do at this juncture will have a big impact on your business, but submitting your invoices on time is just as critical. This article is a great one to bookmark on this issue. The writer (not me) rams home the point that managing your accounts is as important as bringing in new business.
Submitting an invoice late not only puts cash flow restrictions on your business it also gives an unprofessional impression to your client. If you can’t be bothered to file on time it’s highly likely that they won’t pay you on time. It’s all very well hunting and gathering for deals, but sometimes you have to get your hands dirty on the details.
So, how late does the paying of an invoice have to get before you start to chase it? This is a tougher one to call and very delicate. Very often the client’s account management will be to blame and a gentle nudge will do the trick.
But never email the client. Pick up the phone, speak to accounts and begin a relationship (so to speak) with the person responsible. Being aggressive and uncool will worsen your case. Be charming, speak nicely… you’ll get your money.
Also speak to your accountant if you’re worried about payment. Whether you are engaging a traditional accountant or using an online accountancy service such as the one I’m using, they are the experts and that’s what you pay them for.
I mentioned in the second part of this series that this week I would be telling you about which business expenses you could claim for and how National Insurance and tax bills work. I may have been economical with the truth because I wanted to impress upon you the importance of this issue.
Next week I’ll be giving you that advice on expenses and tax bills, but for now send it that invoice, don’t put off the paperwork and you’ll be on your merry old way to becoming rich and fulfilled. Be enterprising out there.