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5 Hacks To Proactively Prevent Late Payments Instead Of Fixing Them http://ift.tt/2tvotDW Dealing with late payments is one of the most annoying parts of running a freelance business. You did your part, now you just need clients to do theirs so you can balance the books and move on with new projects. The problem is a common one. According to the Atradius Payment Practices Barometer survey, more than a third of B2B invoices aren’t paid on time. Instead of finding ways to convince clients to pay their overdue bills, it’s better to prevent them from happening in the first place. Here are five hacks that can help. 1. Ask for a down payment When you work as a freelancer, you’re very vulnerable to nonpayment. People pay their credit card bills because they fear collection services (and a damaged credit score). Hiring a freelancer online gives them a certain amount of anonymity. And unfortunately, many people take advantage of this and don’t pay their invoices after you’ve done your work. Probably the best way to avoid this problem is by requiring a down payment for every project. This will scare away the potential clients who never had any intention of paying you in the first place. Before starting work, ask all clients to provide a 25% down payment on the project. Once you’ve submitted the work and they approve it, then issue an invoice for the remaining 75%. 2. Make it easy to pay It’s in your best interest to eliminate all barriers to payment for your clients. Make it easy to pay, and they’ll feel a lot less put out about doing it. Gone are the days of mailing checks for freelance services. Online payment is a must. PayPal is the standard method to transfer money for most people today. You can use other services as well, but make sure you offer a variety of options to make it easy. You also might consider accepting credit cards as part of your business. Sure, there’s a fee, but that’s the cost of doing business. You can always cushion your rates to make up for online transaction fees. No matter what accounting system you use (QuickBooks, Harvest, NetSuite, etc.), all of them give you options to send invoices via email. Figure out what invoicing method your clients prefer and cater your invoices to their needs. You’ll end up with much fewer overdue invoices in the process. 3. Establish a credit limit at the beginning Some people don’t pay their invoices because they’re busy or careless. The PayPal invoice email slipped through the cracks of their inbox, and you have to send them reminder after reminder to pay up. Ultimately, that’s lost time and value for you. B2B businesses lose almost 52% of the value of their receivables when not paid within 90 days of due date. So what can you do about it? Establish a standard credit limit at the beginning of your working relationship. Use wording like this: “I cannot extend more than $200 of credit to any one client, and am unable to move forward with future projects until outstanding debts are paid.” This simple clause protects you from clients who are chronically late on their invoices. If someone wants you to start another project but still haven’t paid their invoice from last month, they’ll have to pay up! Business via Forbes - Entrepreneurs http://ift.tt/dTEDZf June 30, 2017 at 06:29PM
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