Tips for New Business Owners – Get the Money in the Door

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So you’ve started that business. You’ve even gotten a customer or two. But there is nothing like the feeling when you get that notification that the money has hit your account! Hi, this is Judi Otton with GrowthCast, and today I’m going to give you some tips on making sure that you get paid quickly and regularly for all the work that you do.
First of all, I want you to make sure that you’re invoicing regularly. Think about this, if you finished a job on the 10th of the month, but your invoice at the end of the month, many customers won’t pay for 30 days. That’s almost two months between the time that you finished the job and got paid for it. So I would suggest that you invoice weekly.
Second of all make sure your invoices are very clear about the services you provided. You don’t want your clients to be confused at all.
Third, let’s make it easy to pay. Now I know a lot of people have feelings about allowing customers to pay with credit cards because we as business owners pay that 2-3% surcharge, but it makes it so much easier for them to pay you. If you can get that money in the door faster you don’t have to run a balance on your credit card that might be costing you 15% or 20%. So you pay a little bit to get it in, but it could be really really worthwhile.
Fourth, in your contract make sure that there is a clause that if you have to go to collections or if you charge interest on a late payment, that first of all you can charge interest on a late payment, and if you go to collections and are successful the costs are on the client and work with your lawyer to make sure that this clause is in your contract.
Finally, I want to offer you a little bonus tip. If at all possible put your clients on recurring credit card payments. This is what I do with my long-term clients. Every month I just hit their credit card for the monthly fee. I also have set up QuickBooks to automatically send out a payment receipt so I don’t have to do a thing and the money just appears in my bank account.
This is Judi Otton with GrowthCast and I’ll be back next week with a new Fiscal Fitness Tip of the Week for you