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Invoicing and getting paid

From: Freelancing Fundamentals

Video: Invoicing and getting paid

Every experienced freelancer has a story about a client who doesn't pay or who is slow to pay. It's going to happen to you too, but there are a few ways to make such experiences less frequent. Your first line of defense is your contract. As I said in the earlier video about creating contracts, you should include clauses that specify not only the amount the client will pay you, but also how and when. Along with the payment clause, have clauses that spell out precisely what the client is getting from you.

Invoicing and getting paid

Every experienced freelancer has a story about a client who doesn't pay or who is slow to pay. It's going to happen to you too, but there are a few ways to make such experiences less frequent. Your first line of defense is your contract. As I said in the earlier video about creating contracts, you should include clauses that specify not only the amount the client will pay you, but also how and when. Along with the payment clause, have clauses that spell out precisely what the client is getting from you.

That lays out your argument before it happens by saying, "I did A, B, and C as the contract specified." Now it's time to hold up your end of the bargain. But clauses are only as good as their enforcement, so it's important you have text in the contract that explains what will happen if you're not paid. It needs to be realistic, actionable and legal; and you have to be prepared to go through with it. For example, a common clause in the United States says that both parties will seek mediation or arbitration before going to court and it spells out the conditions.

You might ultimately decide it's not the worth the trouble to follow through, but again, someone is eventually going to try to get away without paying, so be prepared. Finally, don't start the work until the contract is signed or until you have other legal proof of agreement. This is the part that can be hardest because you'll be eager to get going. But it's important psychologically that the client acknowledge that the project is actually going to happen and that they will have to go through with their responsibilities. There is another way to make sure you get paid, and that's to take payment in advance, either partially or in full.

I'm of two minds about this. On the one hand, requiring advance payment could hinder the sales process. You're essentially demanding that they trust you more than you trust them. On the other hand, they are going to have to pay you sometime, why not at the beginning. There is one situation where you should probably get payment upfront. If the job requires you to buy materials that are specific to the project or spend your own money to get it started, make sure the client covers those expenses first. In this area, you're just going to have to develop your own judgement and listen to the experiences of your colleagues.

So you have finished the work and now it's time to collect. As a reminder, you should present your client with an invoice. I've included a simple invoice in the exercise files. By the way, some accounting programs have their own invoicing function, including the popular QuickBooks. In any event, an invoice should include at least the following elements. Start with your contact information, then put the word INVOICE in big letters at the top of the page. That will help prevent it from being buried.

Include a statement that you expect that you expect to be paid, how you should be paid and when the deadline for payment is. By the way, I'll often say something like, "In 45 days, but then I'll include the actual date." Then give a brief description of why you're getting paid. Here I'll often reference the agreement saying for example, In accordance with our contract of February the 15th. And of course, specify the amount you expect to be paid. Some clients also like you to include an Invoice Number to help them track it in their records.

And if it's for hourly work I'll paste my time sheet at the bottom of the page. Finally, send it off, make a note of the due date in your calendar and try to put it out of your mind. You can drive yourself crazy worrying whether someone is going to pay you, but remember until the deadline is passed there's nothing to be done. I found that most clients are pretty good about paying on time, especially after your first project together. Give them the benefit of the doubt, but then be prepared to act once the deadline is passed.

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Freelancing Fundamentals

42 video lessons · 25136 viewers

Tom Geller
Author

 
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  1. 10m 50s
    1. Welcome
      1m 53s
    2. What is freelancing?
      2m 53s
    3. How freelancing and employment differ
      2m 33s
    4. Preparing your mindset
      3m 31s
  2. 9m 24s
    1. Defining career goals
      2m 48s
    2. Sharpening your market focus
      3m 18s
    3. Transitioning to freelancing
      3m 18s
  3. 16m 11s
    1. Preparing your portfolio
      3m 11s
    2. Estimating costs
      3m 10s
    3. Funding your startup
      2m 42s
    4. Establishing your workspace
      3m 35s
    5. Building your professional network
      3m 33s
  4. 8m 51s
    1. Getting licenses, permits, and insurance
      2m 15s
    2. Creating contracts
      4m 23s
    3. Finding professional service vendors
      2m 13s
  5. 12m 54s
    1. Setting prices
      3m 13s
    2. Establishing payment systems
      1m 36s
    3. Invoicing and getting paid
      3m 50s
    4. Keeping the books
      2m 32s
    5. Managing taxes
      1m 43s
  6. 14m 41s
    1. Announcing your availability
      3m 16s
    2. Finding work through agencies
      2m 2s
    3. Onboarding clients
      2m 59s
    4. Avoiding scams
      3m 25s
    5. Choosing assignments
      2m 59s
  7. 11m 27s
    1. Interacting with clients
      2m 11s
    2. Delivering quality work
      2m 28s
    3. Getting referrals and recommendations
      2m 34s
    4. Losing and firing clients
      4m 14s
  8. 10m 48s
    1. Deconstructing big jobs
      3m 34s
    2. Adopting time-management tools
      2m 35s
    3. Creating schedules
      2m 30s
    4. Turning off the clock for "me time"
      2m 9s
  9. 20m 6s
    1. Staying motivated
      3m 3s
    2. Increasing your rates
      2m 52s
    3. Marketing beyond your professional network
      2m 56s
    4. Growing through hires and partnerships
      3m 30s
    5. Building passive income
      3m 48s
    6. Changing focus
      3m 57s
  10. 4m 52s
    1. Case study: Publishing a book
      2m 47s
    2. Next steps
      2m 5s
  11. 12m 42s
    1. Freelancing Q&A
      12m 42s

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