Five Ways to Speed Up Client Payments

For a small firm or a solo practitioner, late payments can put a practice in jeopardy, not to mention the stress and frustration that come along with it. Here are a few strategies to help alleviate late payments:

  1. Include payment terms in the engagement letter. A signed contract that details how much and when you’ll be paid protect you and your client. A binding contract also make it easier if legal action is required.
  2. Reward early payment. Some service providers offer a percentage discount, as an incentive to clients who pay with cash or check on the day they receive service. A small discount, such as 4 to 6 percent could motivate some clients.
  3. Collect a deposit before work commences. Often service providers from contractors to lawyers will request a deposit or retainer. These upfront payments offset out-of-pocket expenses for the service provider to begin the work.
  4. Invoice promptly. While it’s not a pleasant part of the job, generating invoices is how you get paid. With proper time tracking of all billable hours, invoicing becomes less of a scramble and it is easier to generate invoices on a regular, predictable basis. 
  5. Invoice clearly. Avoid legal jargon whenever possible in invoices. Let clients know precisely how many days they have to pay invoice. Alert clients to the aforementioned incentive for early payment. 

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