Hey have you invoiced your client yet?
Getting paid can only happen if your client has been billed. You need to invoice your client, in a timely manner, with clear details of what you did, your charges for this, how to pay you and your timeframe for this payment (including any penalty interest charge for late payment).
To enable you to invoice effectively you need to create an invoice template for your business. If you are using an accounting software product like MYOB, use their template. Make sure your invoice includes all the details to make it easy for your client to pay you such as your full bank account details, your GST number, the date of the invoice and your payment terms. Also include their full contact details, description of the work done with dates, and full contact details for you. Make it easy and clear for the client to get hold of you if they have a query about the invoice or a problem with payment.
It always helps to talk about cost estimates up front so you can prevent any nasty surprises or misunderstandings with the client later on when you bill them. It doesn’t matter what the work you are doing for them is, an estimate provides a basis for the later invoice that is understood by both you and the client before you start the work. During your initial discussions with the client make sure you get their contact details and who is being billed for this work. It may not be the person instructing you so get all these details clear between you at the outset.
If the work changes during the course of the job, then confirm these changes with the client, preferably in writing (a short email or message) and make sure these are noted in the invoice – particularly if these are outside the scope of the original quote and are extras that will cost more. You don’t want the client refusing to pay because they said you didn’t tell them about these changes/extras.
You can’t be paid if you haven’t billed the client for the work! It is vitally important that you invoice as soon as possible once the work is completed.
Create efficient systems for invoicing. Use e-commerce if possible – accept EFTPOS and credit cards. It makes paying easier for the client and you. Set shorter terms – use a 7-day payment term rather than 20th of the following month. If the sum involved is larger or the work will be carried out over a lengthy period of time then you may choose to offer flexible payment methods – a payment before the work commences with regular instalments at specific milestones or dates. If the job involves a lot of money you may wish to check the creditworthiness of your client before commencing the work.
Chase up outstanding debts promptly. Set timeframes for yourself to chase these up, for example, 7 days late, a reminder email with a copy of the outstanding invoice. If not paid within 21 days consider putting the customer on a payment plan or charging penalty interest for late payment. Cut off credit (if used) to this client if necessary.
Gunson McLean can support you with getting your outstanding debts paid and with all aspects of invoicing your clients. You need to stay on top of your cashflow so regular catch ups with your financial advisor to discuss this is very important. We have the experts to help you and your business succeed.
To discuss all your account matters please call us on 09 438 1001
