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5 Ways to Avoid Accidentally Working for Free

Feb 04, 2016 by Stevie Valle

Discussing money is a sensitive subject that leaves most of us feeling uncomfortable. As an independent contractor, your livelihood and the success of your business is dependent on getting paid for your hard work. So how do you ensure you get paid - on time - for the work you do? With a few small tweaks to your workflow, you can maintain a happy relationship with your customers and still avoid those awkward conversations when they’re late with a payment.

1) Get a Signed Contract. 

Cell phone companies do it. Cable companies do it. Contracts are beneficial to both you and your customers. For you, it ensures that the customer is aware of all costs and due dates up front and their signature signifies they agree to those terms. For your customer, it outlines the services you will provide so they can feel confident the job is being performed as discussed and that risk to their property is minimal. Setting up a general contract is very easy and you can easily find free templates online. Of course, it’s always a good idea to consult a lawyer while drafting up your business contracts to make sure both you and your customer are legally protected.

2) Require a Deposit Up Front. 

Requiring a deposit before you begin your work is a simple way to weed out those customers who may otherwise be inclined not to pay in full at the conclusion of the job. Because the deposit is applied towards the final cost of the job, the customer isn’t being required more than the cost originally agreed upon (which would be in writing once you’ve obtained the signed contract). Once you’ve established trust with these new clients, one option is to discount or waive the deposit fee to increase that customer loyalty!

3) Expand Your Accepted Forms of Payment. 

Sure, cash is great! It gives us a guaranteed, immediate payment unlike checks or credit card payments which could bounce back. That said, we live in a digital world now and sometimes it’s inconvenient for customers to obtain cash. Electronic checks allow customers to still give a check if they don’t have cash readily available, but imposes no risk to you as the funds are located by the issuing bank before the check can be accepted. Companies like Square allow you to attach a credit card reader to your smartphone to instantly accept credit and debit payments for a nominal fee. Though it may seem small, allowing your customers to choose from a variety options to pay will ensure there is no excuse when it comes time to settle the bill. (Learn more about Square here: SquareUp.com)

4) Bill Often. 

If you expect your project to happen over the course of a few weeks or longer, try billing your customer in smaller, more frequent intervals. This not only makes the payments more affordable for your customer, but also ensures you’re getting paid regularly for the work you’ve put in. If the payments stop, so too does the progress on their project. The biggest key to success is creating a good invoice. Be as detailed as you can and even consider itemizing items and services so the customer has a better understanding of where their money is going. Additionally, you may consider printing your contract terms on the back of the invoice to serve as a reminder of your agreement!

5) Avoid Repeat Offenders. 

Chances are, you’ve earned repeat customers through the course of growing your brand. While in general, the ultimate goal of any successful business is to establish a network of repeat customers, sometimes you need to drop those less desirable customers who hurt your growth, rather than help it. If a customer has a proven record of being late or not paying up for the work they’ve received, it’s time to ask them to look elsewhere. Fool me once, shame on me. Fool me twice, well, you know the rest.

 

Keeping your customers informed of your terms can help you avoid those unpleasant phone calls and letters requesting the money you’re owed. Being paid on time ensures you’re able to get the right materials and hire the right help to continue to provide high quality work, which ultimately benefits your customers just as much as your business.

Have any tips to help ensure you’re paid on time? Share in the comments below!

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