Your company does good work, and you are proud when your completed project makes a client happy. However, nothing can diminish that feeling of pride faster than having to wait and beg for the money a client owes you for the work you did.
Running a small business is challenging enough when some days every dime counts toward keeping things going. Having to wait indefinitely for someone to pay you can make you frustrated and angry. There are steps you can take to improve the chances that a client will pay, but in the end, you may have to make some difficult decisions.
Setting the stage to get paid
Receiving payment for your work seems like something you could take for granted. Sadly, not everyone agrees. You may run into clients who suddenly have financial crises and others who simply do not take you seriously. From the very first meeting with potential clients, you can begin laying the groundwork for receiving the money you deserve, including taking these steps:
- Have a written contract that spells out your payment expectations and the consequences for late payments, such as additional fees or stopping work on the project.
- Revise your contract anytime a client requests changes in the project, and review those changes with your client.
- Create a payment schedule that you discuss with your client before beginning any work.
- Do background checks on your potential clients, including credit checks and inquiries from others who have worked with the client.
- Offer to negotiate with a client who may be struggling to pay you since receiving some money is better than getting nothing.
- Do not continue work on a project when the client falls behind on the payment schedule.
- Be persistent in collecting delinquent fees, but always remain polite.
- Make sure your client knows, through your contract and your payment discussions, that there is a deadline after which the client risks facing legal action for nonpayment.
After putting all your precautions and systems into place, you will still meet with clients who can’t or won’t pay you for the work you do. This is a fact that many small business owners must face. When this occurs, you will be asking yourself some important questions to determine whether the outstanding balance is worth pursuing through legal channels. You may wish to speak to a Texas attorney to obtain legal advice about this question and learn about your options for collecting payment.