Wave & Clockify: How to never have a late client payment

I think we can all agree, nothing is worse than not getting paid for your work.

I’ve seen it happen to freelancers and huge agencies. Once you have delivered the work, it’s anyone’s guess when you will be paid. Don’t let this happen to you!

Step 1. Get your accounting in order

Do not make it hard for your clients to pay you.

If you don’t already have invoicing software setup stop reading this Wave accounting., It’s my favorite all-in-one invoice and accounting software for freelancers and small businesses and I use it for our BCIT Design Studio.

Ask yourself this…

How are your clients expected to pay you if your invoices don’t look professional and are difficult to pay?

Wave found if you let your clients pay online you get paid up to 11 days faster on average. So use your invoice software to accept MasterCard, Visa, Apple Pay, and more.

Make sure your invoice software lets you set up automatic reminders, calculate taxes, and create custom payment terms.

Step 2. Get Pre-Paid for ALL Work

Alright, this is where I’m going to get controversial. Now that you have a system to get paid.

Don’t do work unless you have already been paid a deposit.

It’s an industry standard that you first grab the initial deposit, about 33% of the total you’re quoting for the whole job. Do the work, then invoice the remaining amount, and about 30 days later you get paid.

Reasons to get a deposit

1. They may never pay you and run off with your work.
2. You have to wait until you finish the project and then 30+ days to get paid. You are essentially giving them a loan to get your work.

After a few times of not being paid, or waiting months for payment, you start to smarten up.

This is why many agencies and freelancers take a deposit. 33% is common practice. Do not start the project without it, no matter how bad you want the job.

Longer Projects, like website

If I’m doing a website project, I might break it down into three stages.

Stage one is “architecture”, stage two is “design”, and stage three is “development”.

To start stage one (architecture) you need to pay 100% for that phase. Then 30 days before we get to stage two, I send you a second invoice for that amount.

If we finish stage one and the second invoice is not paid work is stopped. No “ifs, and, or buts”

I know this sounds scary, but it is the only way to ensure you get paid for every project.

And clients may push back but here is what you say word-for-word. Works on the phone and in person.

Mr. Client says, “And what about payment, how does that work”

I say:

“All projects have a 33% deposit. We can split the project into 2 or 3 stages. The invoices are issued digitally. They include a brief statement of work and a link to pay online via credit card or you can pay by check if easier.”

If you bill your time hourly you can still get pre-paid. Just scope out how long you think the project will take, and make sure this is on the quote.

Step 3. Track Your Time Accurately 

If you work hourly, you need to track your time. Ideally, your time-tracking software combines with your invoicing software.  Clockify – we use this here in class.

Even if you bill your clients on a project basis (not hourly). You still should track your time.

I can tell you from experience, often I think something will take me an hour and when I check my timer I have spent 1:45 on it.

Tracking your time has a few benefits:

• You can make sure you are making a fair hourly rate.
• You can follow your estimate vs. reality to become better at estimating projects.
• In a disaster scenario, a client says “what did I even pay you for, I could have taken Times New Roman and made it look like this”. You can run a report and tell him exactly what you spent your time doing.

If you are not tracking your time. You should. What is not measured can not be managed.