How to Get Paid ON TIME for Your Design Projects

 

Have you ever worked hard on a project, delivered the work, only to have your client either take a long time to pay or not pay at all? Unfortunately, this sometimes happens, but owning a business means you need to get paid. So let’s talk about some ways to protect yourself and increase your chances of getting paid on time.

Money isn’t everyone’s favorite topic to discuss or deal with…especially when things get shall we say, bumpy. However, it’s a fact of business that you can master, and the sooner we can be okay with talking about it, the better off we’ll be. I’ve had many awkward money conversations with clients over the years. I want you to feel confident and prepared when discussing money and payment issues so you can collect what you deserve and get back to your design work. 

There are a few traps we can fall into that we probably don’t even realize are tied to our chances of getting paid: 

  • Lack of communication before the project starts
  • Unclear expectations and deliverables
  • Relying on a verbal agreement versus a contract

Thinking back to the times I didn’t get paid or needed to have those awkward money conversations can be traced back to me not having a contract at all and relying on a verbal agreement. And also, times where I didn’t clearly state what was included in the project, so it caused confusion later. Quite honestly, I wasn’t taking myself seriously as a professional business owner. I wanted the benefits of running a business, but I wasn’t stepping up my game in administering the business.

Of course, I knew I should send a contract, but I felt like it would be an inconvenience for the client, or it would take too much of my time, so I would skip it. Maybe you feel this way also. If so, I want to encourage you to get yourself out of this pattern. I want you to embrace the idea that a contract protects both you and your client and saves you both some pain and frustration.

So, let’s get into some tips for ensuring you get paid on time!

1) First, protect yourself before work even begins.

Decide on your payment policies and make sure they’re in your contract.

  • Do you collect a deposit to begin work? 
  • Do you collect full payment before starting work or maybe 50% upfront and 50% at completion, or do you split it up differently?
    • Either way, I strongly suggest you collect a deposit before beginning a project. 50% is standard or even the full amount if it’s a project under $1,000. Receiving a deposit ensures you can feel secure about diving into your project. It also signals to the client that you are a professional with your business pants buttoned up.
  • Do you accept payment plans?
  • Do you require a kill fee if the project stalls out?
  • When do you send out an invoice, when is it due?
  • Do you charge a fee for every week or month that payment is late?
  • What methods of payment do you accept? Check, money order, cc, all or some of these? 
  • With your proposal and contract for your project, make sure you’re clearly and explicitly stating what’s included (and, sometimes more importantly, what’s NOT included). Big ones to think about: How many revisions do they get with this project? Is the cost of printing included? What types of files do you deliver? If you’re creating a website, do you include maintenance or SEO with your services, or not? By stating these in writing, you have a clear scope of work; you can think about it as a checklist to refer to throughout the project if any questions arise around what you’re committed to delivering.

2) Communicate your policies in early discussions with a new client

  • When working with a new client, it’s especially important to be upfront about your payment policies. You don’t need to overwhelm them at this stage with all the details of your contract yet. But give them the highlights on payments, so they are aware before they decide to work with you. Generally, this includes giving them a heads up that you will need a deposit to get started and letting them know when the final payment is due and the types of payments you accept.

3) Make paying you as easy as possible

  • Every time you send an invoice, think about the person receiving it. How can you help make it as easy as possible for them to pay you?
  • With every invoice, tell them how they should pay you and when payment is due. And be detailed about this: So, I send all of our invoices through email, and I include a note every time that says something to effect of: Send a check to [address] or click the green button to pay electronically. It can be as simple and straightforward as that.
  • Offer credit card payments if you can - I know the associated fees can be hard to swallow, but those fees are part of doing business so they are tax-deductible, and they do lead to faster payment, so something to think about. There are lots of easy ways to send invoices and collect payments these days. Paypal or Venmo might be great options to start out. Just make sure you have an account for your business only (separate from your personal account). This will make tax time so much easier as you won’t need to sort out your personal transactions vs. your business ones, and having separate accounts can protect you if you ever get audited. If you’re ready for a more robust invoicing option, check out services like Harvest, 17Hats, Quickbooks Online, Wave, or Stripe. For me, Quickbooks Online works great because it’s connected to my bookkeeping, and my accountant has access to it. It is a monthly investment, however, so just weigh that decision based on your particular situation and the volume of business you’re doing and see if it’s worth it.
  • Provide your W-9 with a tax ID number when you start a project and maybe even again, along with your invoice. This is especially important if you’re billing larger organizations with accounts payable departments. They will NEED your W-9 before they can process your payment, so providing it upfront can speed things along.

4) Adapt to the client when it’s reasonable

Let’s talk about the differences between the clients you work with. Very small businesses and solopreneurs can likely pay you quickly since they are in control of their bookkeeping. Still, larger organizations may take weeks or months to pay because that’s how their internal process works.

Find out what their payment terms are before you begin work so YOU can be prepared. If you know you’ll be waiting 60 or 90 days for payment, maybe you’ll want to negotiate a larger up-front payment to begin work.

Just understanding when you can expect payments to come in is helpful so you can proactively manage your cashflow situation.

5) Create a follow-up plan

After you send an invoice, what will you do to encourage timely payment?

Many online payment services allow you to set up automated reminders to clients both when payments are coming due and when they are late. Take advantage of those to save time and remove yourself from being the bad guy. These initial reminders should be non-threatening, polite reminders. Most of the time, clients just haven’t prioritized your payment, so one reminder is all it takes to get things back on track. I like to give them the benefit of the doubt. After all, we’re all busy, and there’s a lot to keep track of when running a business. 

My reminder message: 

Dear client, 

I just wanted to send a quick note to let you know that according to our records we have not yet received payment for [Invoice No.].

Please let me know if you have any questions or if you believe you have received this notice in error.

If payment still doesn’t arrive or you don’t get a response within a day or two, it’s time to call your client to discuss and send a more direct note, both via email and a physical letter. Gauge your approach based on your relationship with the client. In my experience, one reminder email does the trick.

If it doesn't help, there are more steps you can take, like calling in a collection agency or talking with a lawyer. Usually, getting a lawyer involved is often more costly than the amount you’re trying to collect. However, a collection agency might be a good option. They keep a portion of the amount collected (for their services) but it’s better than not being paid at all. 

However, I think you’ll find that once you implement the tips I’ve shared here, you’ll rarely have payment issues. 

If you want to work on your money mindset, I do have a book recommendation for you. Check out You Are a Badass at Making Money by Jen Sincero. It’s a fun, uplifting, quick read.

I hope these tips help you to GET PAID ON TIME! Let me know if you have any questions. And remember:

The world needs great design—YOUR great design. [TWEET THIS!]

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