Following up on overdue payments can be really stressful for a Virtual Assistant. In the virtual business, payment problems happen for various reasons. Some clients start out with good intentions but sometimes things go beyond their control affecting their finances. While some clients just happen to be rotten apples.
The bitter truth is that you will get to encounter one or two clients who fall under this umbrella. Do not lose heart and just be on guard all the time. Although there is no magic formula to determine who are the potential slow paying and non-paying clients, there are ways to safeguard your business.
Here are 4 tips on how to get paid on time.
Always have a contract. It is really important to have a signed agreement where the Terms of Payment are clearly stated. This will prevent people from taking advantage of you.
Verbal agreements will not suffice because anything you say in the end can be refuted because there is no formal agreement to back you up. One of the common mistakes new Virtual Assistants commit is agreeing to work without a contract.
Do not make the same mistake and have a contract ready prior to the commencement of the project. When a client does not hesitate to sign a contract, it is an indication that he wants to do good business with you.
Prepare an Invoice. Your invoice must indicate the following:
- Your company name and contact details
- Client’s company name and contact details
- Invoice date and number
- Payment due date
- Itemized list of tasks completed
- Rate per hour or per project depending on what was agreed upon.
- Payment methods. Provide the details necessary to facilitate the payment. This will depend on what is stated in the contract. For example both parties have agreed that payments will be coursed through PayPal.
Adjust your billing cycle. Do not go for a 30 day billing period. That is just too long. Adjust it to 14 days. Shortening your billing period will allow you to follow up on payment every two weeks.
Sending notices and polite email reminders will help you be in your client’s priority list. Do not let bills pile up; one unpaid invoice is good reason enough to step on the brakes. Focus on other projects in the meantime and resume work for this client once the bill is covered.
Get paid up-front. You may opt to require a deposit upon contract signing. Getting advance payment is a standard practice of Virtual Assistants who sign up for a per project deal.
Do not fear losing a potential business client by doing this. There is no harm in bringing it up while you are finalizing your contract agreement. Many clients are open to this arrangement now.
When you enter the Virtual Assistant business you have to be ready for the good and the bad. It is frustrating to not be compensated for the hours you have devoted to the completion of the project so do your best to prevent this from happening.
Even if it happens, just move forward and don’t get hung up on one bad client. The virtual business is thriving so there are more opportunities waiting for you.