Maybe it's just me, but asking for money is uncomfortable. It becomes even more uncomfortable when that money is owed to you by a client that is late to pay. However, knowing how to collect from clients hasn't been that much of a problem since I don't really need to, technology does it for me.
It's all about automation…
If you've been reading my blog long you'd know that I strive to spend as little time as possible on my side business for several reasons:
- I want to spend quality time with my family (I learned the hard way how working too much can negatively affect your loved ones)
- I don't need another full-time job. One is quite enough.
- It doesn't make sense to work long hours on a side business anymore because of today's technology and accessibility to talent.
Because of all of those reasons, one of the best features that I love about Freshbooks is its ability to do 30, 60, and 90 day reminders to pay (these are all configurable by the way). I never realized just how powerful this was until cash flow became an issue.
Recently, my wife and I spent money renovating and improving our house. Unfortunately, we misjudged how much it was going to cost and we were at the point where we really had to significantly reduce our spending or face going into credit card debt (we have student loans right now, a time share, and that's about it). I am sure there are people in a lot worse situations (there are).
One of my clients owed me about $1250 for a project that I had completed that I knew I could collect if I needed to. However, without having to do anything, the administrative assistant that works for my client sent me an email saying something to the effect of, “Sorry about not sending the check, I totally forgot.” Was it divine providence that helped her to remember? Not really, Freshbooks shot her an email politely nudging her to pay up. Lovely.
Fortunately, there's been only one time in which I had to send a warning to a client about legal action if they didn't pay me. I got myself into that predicament because, although they were late, I continued to do work for them. When it was close to the end of the contract, they basically said that they didn't have the money to pay me for 2 months worth of work (about $3400). I finished up the contract, and we negotiated a payment plan. Oh well.
One less thing to worry about…
Whether it's using a virtual assistant, or technology to automate things, the less time you spend on things like collecting money is more time that you can spend on things that will move your business forward. You are the only one that can decide the course of your company, so the more time you have to do that the better.
I pay for the $19/mo tier of Freshbooks (have been for almost a year now), and that's all I really need right now. However, the fact that I don't have to pick up the phone or send an uncomfortable email asking for my money is seriously priceless. It's probably ridiculous, I know, but I am an introvert and prefer to not have to break my client's legs for money.
They even have a new and cool little tool that will give you an estimated cash flow calculation per client based on the typical time they take to pay. It's pretty neat.
If you want a great way to do your invoicing and to follow-up with clients about payment, I highly recommend Freshbooks. (Yes, it's an affiliate link. I still love em.)