When you go into a store chances are it’s to buy something, right? Otherwise why else are you there?
So, you walk into the store to buy let’s say a couch.
You cannot technically walk into the store, pick up the couch, and walk out before actually paying for it. If you do, well, I guess you got the five finger discount and you better run fast.
Now let’s take a look at that process (of you actually buying the couch).
You go into the store, look at the couches, check out the price tags, and sit on the ones you like and that fit your budget – keyword budget!
You know what you want, how much you can spend, and what the costs are all before taking the couch home. Of course, you can choose to pay cash or put it on a card but either way you have to pay for it before leaving the store.
So why is it that in a store setting we know this and have to pay upfront for things before we actually get to have them yet when it comes to running a small business (some larger ones do this too) we send the invoices after the fact (once work is completed or in some cases when most of the work is completed) in hopes they will be paid within 30 days?
I mean, how many times have you run into this (whether you are a business owner or a customer)?
You hire someone to do the work and will be billed/invoiced at the end. Pretty common, right? Sometimes (hopefully most of the time) there is a deposit that needs to be put down in order to protect and reserve that time for work.
What I’ve found to be a huge issue with this business, payment model is that often times the bill is either more than expected/agreed upon or it just doesn’t get paid – right away or at all sometimes. Now, I understand that things come up and we can’t all possibly predict what costs we will incur once a project is started and we hit some bumps, but it’s still an issue, am I right?
As a business owner (small or large) it is your responsibility to clearly communicate – as often as you need to – any bump in the road that moves the agreed price up!
Why? Because you can’t assume your customer will know that you hit a bump and that it will cost them more. Just like you can’t assume they will be willing to pay for it. It doesn’t matter at that point (the time you give them the bill) how much extra time you had to spend on the project/service – that’s on you. As far as the customer is concerned, they are only paying for what you had agreed on and not a penny more – unless you clearly communicated with them throughout the project.
So why is it that so many of us have been in these situations yet not much has changed in the sense of billing clients?
Frankly, I have no clue! I have implemented the “here’s what it’s going to cost you if that works, great please pay here” for my business. I accept all major credit cards and once payment is complete I will start getting to work.
I charge upfront with flat fees for pretty much all my services so my customers know what they are getting before they get into it. If they need more, guess what? We talk about, I send them the invoice and once it’s paid, we can continue (varies job to job but you get the idea). I understand that this may turn some people off especially if they have been burned in the past by others (which is why I am trying to teach you how to build a better business here). But that’s where communication comes into play.
If you are not sure about something ASK.
I am very open with my customers and don’t want to engage in any services until they feel comfortable paying upfront because they know I am going to get the work done. If something comes up then we talk about it before moving on. It’s really that simple. No surprises.
This past year, while engaging in services provided by other business owners, I’ve received 2 separate “surprise” invoices that neither were upfront about any related costs or additional costs. As the customer – and an entrepreneur trying to build a successful business that helps other small businesses be better and do better – I was blown away!
How does someone run a business (the “others” who sent me those surprise invoices) by surprising their customers with bills after the fact without discussing anything in regards to “this is what I charge and you can expect an invoice for a billable time at X-amount of dollars?” And if they do mention it, they should be keeping you updated with any changes that come up.
Needless to say, I am very passionate about business and making sure the customer as well as the business owner (myself included) are taken care of and are building a successful business – one that can set an example for others.
All that being said, business owners and soon to be business owners you need to accept credit cards.
If you are not accepting credit cards you are leaving money on the table and telling potential customers you do not want their business. Yes, credit card processing systems charge a fee. Go with Stripe as they are widely known and offer one of the lowest fees.
It’s 2017 and you need to get over fees.
If you are not set up, go right after this and change that. If you’re already an established business with a business bank account, it will take you less than 5 minutes! You don’t even have to get Stripe you can use QuickBooks and invoice someone super easy! If you are concerned about taking credit cards check out this video and be sure to read the comments as there is a great discussion around accepting credit cards.
[bctt tweet=”Think of accepting credit cards as getting paid instantly! No more waiting or chasing after your customers” username=”Ed_Troxell”]
Also, utilize other online tools like PayPal or Acuity Scheduling (my online booking system) to not only help make your life easier but to get paid on time. Why waste your time following up with unpaid client invoices when you could be using that time to work and make more money?
Bottom line: As a business owner you must be ready to deliver professionalism.