How to get paid on time?

I almost feel guilty for the clickbait of a headline, because you’re not going to find a simple easy answer here. But I do have advice that I believe is good.

In the beginning of December 2020, we’d raised a few invoices. Typically, emdash clients pay within 30 days, most paying within a week of receiving the invoice. Before we closed for the year-end on the day of Christmas, I realised that all our clients had paid, without even needing to follow up. I know that we didn’t get here easily. Here’s how we did.

One: Discuss payment terms openly and clearly with your clients. Tell them how much you charge, if it’s inclusive of GST, and when you want to be paid.

Two: Collect an advance from new clients. Trust goes both ways. I often insist that new clients initiate the trusting relationship by paying an advance. Their reaction often tells you a lot about them.

Three: Invoice immediately. Once your work is over and the client approves it, raise your invoice. It helps when you raise an invoice while the client still remembers your work and is happy about it.

Four: Keep track of who is paying when. Identify those who pay on time and reward them — attend to them sooner, give them discounts, prioritise their work etc.

Five: Consistently fire those who don’t pay on time. Set a reasonable timeline for payments — at emdash, it’s a max of 30 days. And anyone who doesn’t pay within that time, fire them (after receiving payments for work already done, of course).

Over time, you’ll only be left with customers who pay on time. I do this for my freelance practice as well. For instance, I know that Firstpost pays within a week of raising an invoice (though, they have their own SOPs about how to raise an invoice) and Silverscreen pays on the first of the month for all work done in the previous. I know this from experience, of course, working with both these publications and several others with opaque practices.

I admit that it’s not a simple immediate solution to the payments problem. However, it helps build a culture of respecting payments in your small business. And I genuinely believe that the best way for a client to show their respect for you and your work is paying on time.