Get Paid ON TIME: Freelance Billing Practices that WORK
"Hey, now you're a rock star. Get the show on. Get paid." That's what it's all about, right?
It's also the hardest part of any business.
One of the biggest pains in the butt for freelancers and voice actors is just getting paid on time. I know tons of freelancers and voice actors who have right now outstanding invoices, past due invoices, and I even know several who have been stiffed completely by clients.
It's rare, but it happens.
Today we're going to talk about how to manage your billing practices so that you minimize the risk to your own business while still maintaining a positive relationship with your clients. But most importantly, you get paid on time.
Now, as a freelancers, we wear all the hats. We're the artists and the business people. We're sales and production. We're billing and collections.
So when a client is slow or a bad pay, god forbid, that puts us in a really awkward spot. Yeah, we do need to collect on the invoice and get our money, but at the same time we also want to and need to maintain a positive relationship with the client in most cases.
Now the practice of getting paid on time starts way before you ever send the bill. It starts with setting proper expectations with the client before you even have an agreement in place. Getting paid on time starts with…
The Quote
Now, it's never too early to start setting proper expectations with the client, and that will do two things.
Number one, it will minimize potentially negative surprises down the road as it regards billing and payment.
But number two, it also gives you room to positively surprise the client down the road with billing and payment.
Now, again, the time to start setting expectations with the client, especially a new client, one you've never worked with before, billed before, is with the quote. If I'm working with a new client, I make sure that I state my policies upfront, especially the policy that new and international clients are paid upfront, meaning if you're a new domestic client or an international client outside the U.S., for me, I get paid before delivering the files.
Now, this policy does three things:
Number one, it sets proper expectations way early for the client so that they don't get surprised later on when they get the bill before the files.
Secondly, it allows me to mitigate the risk with new and international clients, so hopefully things don't come back to bite me in the butt later.
Third, it allows me a little wiggle room so that I can choose to waive those policies if the client is larger, better known, or if I see the potential for a really great long term partnership.
By stating my policy clearly and way in advance, way up front, I retain the right to enforce that policy or not, and it may give me a bargaining chip in negotiations when it comes to rates a little bit later.
For example, the client may offer me a slightly lower rate than I'm comfortable with. Rather than accepting that rate, I may choose to offer the client rather than payment upfront. I might offer the client 15 or 30 day payment terms instead.
Now, you can also choose to kind of do a hybrid or partial upfront payment policy. For example, you might choose to say to a client, I'll take a 50% deposit, whatever the rate turns out to be, and then you can pay me 50%, either upon delivery of the files, or you may choose to offer the client 15 or 30 day net terms for the remainder of the balance that last 50%.
Now, whether or not you choose a full payment upfront policy, a partial payment upfront policy, or whether you choose to extend 15 or 30 day terms to your client at all is your choice. It's your business and you get to make that call. But regardless of what policy you put in place with that client, you need to be clear way upfront, way in advance, ideally with the quote so that you're setting proper expectations for that client when it comes to billing and payment.
Because the payment policy and billing policy is so closely tied to what you're delivering, what you’re providing to your client, you also need to set clear expectations around the timeline and the deliverables that you will be providing to your client. For example, you'll want to be clear in writing when you expect to receive the final script, when you expect to turn around and deliver the final files, how long the client expects to take for approval and any pick up or revision requests.
The clearer and more proactive you are upfront, the better expectations you'll set with the client, both in terms of how you expect to be paid and how you expect to provide the service to the client.
The next question I always get is,
"Do I have to provide a formal contract with every job?"
And while I'm not a lawyer and this is not legal advice, the way I run my business is if it's a simple one-off project, then in most cases email will suffice.
Email generally, in the United States at least, stands up in court with this stipulation. You do have to be clear and specific with regards to the details things like usage, term payment terms, revision and pickups, policies, etc. All of that has to be clear in writing in the body of the email and most importantly, the scope of the project, that is, exactly what you're contracting and agreeing with the client to do as part of this project.
You can feel free to pull that content, adapt it for your own business, and use it on your website. But I urge you to have your attorney review and perhaps help you with any policies you publicly state on your website.
And lastly, you should have a standard boilerplate formal contract generated or at the very least reviewed by your attorney for large and complex jobs, things like recurring work or retainer or work, anything where it's just not a simple one off project and a more formal contract is appropriate.
So the clearer we can be as an industry and as a group of service providing professionals to our clients, the better service that we can provide to them and the better we will mitigate risks in our own businesses.
Now, for domestic clients with whom I already have a good relationship with, I build them before we've worked together. We know each other. We have a really, really well-developed partnership. I may offer 15 or 30 day terms for those clients, which is pretty standard. Now, some clients may ask for net 60 or net 90 day terms, meaning you may not get paid for up to 60 or 90 days after they receive your invoice.
And ironically, it's often the larger enterprise size clients that ask you for these kinds of terms.
Personally, as a single-person, one-man, freelance business, I choose not to shoulder the risk for enterprise level clients who ask me for 60 or 90 day terms. There's really no reason it should take 60 or 90 days, especially in an age of electronic payment, where payment is often made within the hour, within the day, or within the week.
There's no real reason that they have to ask you for 60 or 90 days. They do it because they want to use their leverage and perceived buying power. "You know what? We're big, you’re little, and we're going to dictate the terms."
I don't play that game.
There are too many other enterprise level businesses, and I work with a slew of them, who understand that small businesses that freelancers often bear an outsized risk and they're more than happy to pay you on time.
And trust me, even in the largest companies, I worked with a Fortune 10 company last week who paid me within a half an hour of the service that I rendered. These kinds of enterprises, sometimes even just large companies, just short of enterprise, they understand the value that creative freelancers provide. They understand the restraints that we have, that we're often very, very small businesses or micro-businesses, and they're more than happy to help appropriately share the risk.
Now, if you do have established, let's say, 15 or 30 day terms with a given client, you might ask…
"When is the best time to bill them?"
Don't wait. The best time to build them is when you send the files.
This accomplishes a number of things.
First, it saves you from having to remember to bill them later.
Second, it's saves you from having to set a time a half a day or a day or a chunk of time at the end of the month to bill all your clients. What a colossal waste of time. When you send the files, send the invoice and it's done.
And third, and maybe most importantly, the sooner they get the bill, the sooner they're going to pay the bill.
Now, you might also be wondering…
"What do I use to invoice my clients?"
And here you got a lot of choices. For example, your accounting software, your bookkeeping software, things like QuickBooks or Wave apps. They often have invoicing functions right within your software that will integrate seamlessly with the rest of your accounting.
Also, some CRMs like HubSpot and Nimble, have invoicing capabilities and functions right within their software.
I myself use PayPal even though it's not integrated with the rest of my bookkeeping. I happen to use QuickBooks Self-Employed for for my bookkeeping, so PayPal is not necessarily integrated with that, but it is integrated with my bank accounts and those are integrated with my bookkeeping software. So it all comes out in the wash. It's all electronically logged for me and all I have to do is sign the right accounts to the right payments. PayPal is easy for me to use. It's easy for my clients to use. It provides them flexible payment options. They can click right on the invoice and pay it with a credit card right online, or use their PayPal account or whatever they want to do.
If you have international clients and they have an issue or problem with PayPal, you may want to check out and use WISE.com in case, you know, a client can't use PayPal or has currency conversion issues, you can always use Wise for international clients. A lot of these applications you have to integrate with a payment processor like Stripe, and for all of them there are transaction fees involved.
But do yourself a favor. Do not be so cheap as to not offer your clients electronic payment because you want to save these nominal fees and put them in your pocket. The baseline expectation is they expect to be able to click on an invoice and pay it quickly and easily. So setting up electronic payments options for your clients will not only satisfy their expectations and their make make their life easier, but will also get you paid faster. And isn't that what it's all about?
Some clients, and again, for whatever reason, it's usually the large enterprises oftentimes have very onerous vendor onboarding procedures and tons of paperwork. I myself have spent up to an hour sometimes filling out paperwork and providing everything they need for their accounting people to generate payment. It's often a pain in the dupa, but it's often also necessary.
My point to you is you may want to reach out to your client if you're working with a large enterprise and find out how much work is involved to be onboarded as a vendor. Of course, you'll want to offer to make sure that that process is as easy as possible from your end, provide them and their accounting team everything that they need to do their jobs so that you can get paid on time.
Is it more work? Yes, more work upfront, hopefully less work to actually collect the invoice when it's due.
I've only had fire one client who the first two times I worked with them went past 60 days. Both times they were dark, they were unresponsive and I eventually had to fire them. I've been lucky in my entire career.
I've never been completely stiffed by a client, mainly because I try to set proper expectations as early as possible and try and manage those expectations and work with clients and try to get as much communication back and forth as I possibly can. If the client does have an issue and I know about it and they're communicative, oftentimes I will work with them and be patient with them.
And that's why I generally don't get stiffed and that's why I generally get paid on time.
The overall idea is the more clear, the more proactive, the more preventative you can be upfront, the less risk you will expose yourself to. When it comes to billing and payments down the road.
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