Working for yourself and making a successful living out of it is no walk in the park. Being an entrepreneur, enjoying your life and earning your fair share is every office-cubicle dweller’s dream.
Maybe you’re someone that spends every day at work in a dead end job you don’t enjoy, grafting for a boss that you despise?
Maybe you’re someone continually frustrated at missing the ever-out-of-reach rungs of the promotional ladder?
If that describes you, then the idea of breaking free and being your own boss has not just become more than just a reoccurring thought, it’s no doubt become an obsession.
If your obsession became a reality, and you’ve taken the insane leap into the darkness of being your own boss, you may have realized that you haven’t got a “Peggy” from accounting anymore. So it’s up to you to keep on top of that stuff from now on.
The work that you do will add up, and your organizational skills will be put to the test to oversee your receivables.
And, what’s worse, you’ve come to the dark and scary realization that if you don’t keep track of who owes you what, then you’re going to go broke and end up groveling to your old boss for your job back, with the hope that he hasn’t already assigned someone else to your pokey cubicle yet.
So in order to stay afloat, use the following tips to keep track of what you’re owed and when. Here are some tips that help you ensure that you get paid on time and increase your cashflow at the same time.
It’s that time-old phrase, “be organized”. That doesn’t mean, however, that you need to be color coded, alphabetical, Monica from Friends organized.
It just means you need to keep a record of what you’ve done for your client and how much they owe you. Use a piece of software or an online program that helps you with your billing process so that you can have it accessible to you at all times, wherever you are.
If you are a small business, then make sure that everyone who works for you is using the same format and process, leaving no room for confusion or errors.
Get Paid As You Go
Invoice your clients as soon as you complete the assigned work. If that’s not possible, then set a pre-agreed date of payment. Sending out your invoices each week is an option, but don’t wait until the end of the month, because they might not be as organized as you are.
If you are lax with when you want to be paid, they could take advantage of that. On the other hand, some clients are just absent-minded, or it’s an honest mistake that they haven’t sent you the payment yet.
If you think that’s the case, then just call them and politely ask for your pay. With a job completed amicably, you’ll likely receive repeat business.
Get Paid Up Front
If the job is going to be an ordeal that requires at least a month, then ask for some form of payment up front. If the full pay won’t be given in advance, ask for a down payment or deposit instead.
When you find yourself in the situation that you haven’t received any form of payment up front, and you have no signed contract between you and your client, then you run the risk of the contractor using your services and not paying for your time and effort. Don’t be naïve.
Speed Up The Process
Close the gap on your costs and collection cycle in order to speed up the time in which it takes to get paid.
Try increasing your productivity to get the job done much earlier than the deadline. You’ll not only get paid on time, but you’ll get more assignments if your contract is based on workload.
If, however, you can subcontract your work out, then try agreeing upon better terms of billing and delay the costs by up to 15 to 60 days. That way you can speed up your collections cycle.
If you are adamant that you’ve collected the majority of your payments, go back and double check. You can even look up a history of it through an “aged accounts” receivable report.
Get into the habit of doing it regularly, and keep an eye on who has and hasn’t paid you. There is nothing more frustrating than doing the work and not reaping the rewards.
Getting paid on time also means paying your bills on time which will help build your business credit.
One more thing, make sure that you are compensated for any adjustments. If your client is happy with your work but wants some changes, then make sure to agree on a rate for any additional work you do.
Working as your own boss or starting up your own successful business is a fantastic and rewarding journey. So follow these tips, get paid on time, and you won’t be going back to your old boss anytime soon.
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