Flaky clients – a step by step guide to dealing with late payments

Dealing with flaky clients – part one

 

Sadly, late payment is something which every contractor and freelancer will probably have to deal with at some point. Whilst it can be considered the nature of the beast, it’s not something which you as a professional should expect nor have to put up with.

 

This blog examines the steps you can take to prevent late payments. Keep an eye out for our next blog that explores how you should deal with them if a late payment occurs.

 

Prevention is better than cure – our top tips for helping to prevent late payments:

1. At the contract signing stage, ensure your payment terms are clearly stated.

2. If you’re dealing with a new client, you could offer a discount if the client pays in full and in advance. Alternatively, you might incentivise your client by offering an early payment discount, within X days of invoice.

3. As soon as the contract is finished, send your invoice promptly. State clearly the payment due date. A shorter billing cycle of 14 or 21 days means it’s not so easy to forget to pay. The date the invoice was issued should also be included as well as the methods of payment.

4. It’s advisable to introduce a late payment clause into the contract (eg 1.5% per month after the due date), and ensure the client is aware of it, both at the point of signing the contract and when you issue your invoice.

5. Include “dispute resolution” terms in your contract, including an “arbitration clause” giving the name of the mediation organisation to be used in the event of disputes. There may be a fee for mediation (based on the amount owed) but it will be less than taking a client to court, plus it’s usually quicker.

6. If payment on a contract is in stages, ensure you’re paid after the completion of each stage. Don’t start the next stage without prior payment.

7. Check their payment history. A quick Google search will reveal if there are any disgruntled contractors who found payment an issue from your prospective client. It’s then up to you if you wish to continue with the contract, or include some late payment clauses to protect yourself.

8. As a contractor or freelancer, time means money so using a time tracking/invoicing app would be beneficial and could improve efficiency. Set up automatic reminders. The longer you wait to remind clients about an invoice, the harder it’s going to be to collect on it.

9. When you send out each invoice, it’s good practice to add a note thanking the client for using your services. Let them know you appreciate their business and hope they will use you in the future. You can also say you would welcome a testimonial from them and add a link to an email address setup for this purpose.

10. The invoice itself should look smart and professional and include the following:

 

  • All of your information
  • Your logo
  • Your customer’s contact information – name, address, phone and email address should you need to contact them in future
  • A detailed list of the items you are actually invoicing for. This could avoid conflict later on
  • Your payment terms – date due and late payment penalties
  • Any early payment discounts you offer
  • A list of acceptable forms of payment
  • Ensure you send the invoice to the correct contact and department, to avoid unnecessary delays

 

We hope that you are now comfortable with invoicing and discussing payment terms with your clients. Remember that an ounce of prevention is worth a pound of cure! In part 2, we will address what you can do if a client misses a payment deadline, so keep an eye out for next week’s blog.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Intouch teams up with IPSE to offer membership discount to clients

Intouch teams up with IPSE to offer membership discount to clients

Intouch Accounting is delighted to announce that from today, any client who starts a new membership with IPSE can benefit from a 10% discount, year on year.

 

Who is IPSE?

IPSE, the Association of Independent Professionals and the Self-Employed, is the largest membership body supporting contractors, freelancers and independent professionals. Their goal is to enable you to succeed in business.

 

IPSE membership

IPSE offers Standard and Plus memberships and now, with Intouch, you can get a 10% discount when you sign up for a new membership. You can pay through a monthly direct debit or a one off annual payment, it’s up to you, and the discount will apply for a long as you’re an IPSE member. As a member you will have access to a whole range of benefits to help protect and defend your business as well as discounts to help you save hundreds of pounds a year.

 

Don’t forget, you can claim membership costs as a business expense. Speak to your contractor accountant about how to do this.

 

A bit more detail

IPSE membership offers you peace of mind and money in your pocket so you can focus on running your business without worry. Highlights of what you’ll get include:

 

  • IPSE protect to help you out when you need extra support
  • thousands of consumer discounts on items such as Apple products, Dell and HP hardware, software, gym memberships, and cash back in many high street stores
  • IPSE representation as they lobby government and across industry to ensure contractors’ voices are heard
  • help planning for your future as well as negotiated rates for pensions, life assurance and private medical insurance
  • IPSE library so you can access all the resources you need
  • access to events, webinars, workhubs, online training and, if you’re a Plus member, 24/7 access to virtual Ashridge providing a wide range of online business resources to learn new skills and improve existing ones.

 

You can find out more about what you’ll get for your membership here, including a quick link to get you on your way to signing up or speak to a specialist membership advisor by calling 0208 8979970 or email intouch@ipse.co.uk.

 

Join IPSE today and take advantage of the 10% discount straight away.

 

What else?

If you’re already an Intouch client, once you’ve signed up for your IPSE membership, don’t forget to refer a friend and we’ll send you £150 Amazon vouchers if they sign up with us. Recommend another and we’ll do the same again! And again and again!

 

If you’re not already with Intouch, this is another great reason to speak to us today about joining. Give us a call on 01202 069 551 or email us and we’ll get back to you at a time to suit you!

 

* excludes renewals or upgrades to existing memberships

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.