How to bill clients is a crucial business discipline. You can install the processes and habits covered in this guide in an hour or two of effort. The reward is getting paid faster for years into the future.
Commit to following this on how to bill clients for 60 days, and you’ll be surprised at how your business will change. Your clients will start to see you as a valid business professional who relies on systems and standard processes.
By setting that professional tone, clients will respect you more which translates into fewer complaints and getting paid on time. You’ll be happier when you don’t worry about invoices being paid on time. That means growing your business gets much easier over time.
Now, let’s dive into the step-by-step process so you can get paid faster. The first few steps are one-time actions you need to take. Once these processes are in place, your business will run much more smoothly.
If you cut the time spent on invoices and payments by a few hours per month, you will have more time to sign up new clients! So let’s begin.
How To Bill Clients Like A Professional: A Step-By-Step Guide
Use these steps, and your business will see better cash flow and less hassle. For this process, we’ll assume that you are running a service-based business (e.g., a freelancer, agency, coaching, or consulting company) and working with clients.
Bill clients like a professional by following these 5 steps:
- Update your contract for invoice and payment clarity
- Create your billing process (Checklists, Templates, and Tools)
- Make it easy for your clients to pay you
- Develop an invoice payment follow-up process
- Optimize your business payment process
Step 1: Update Your Contract For Invoice and Payment Clarity
The foundation of your process starts with your business contracts. Review your contract template and review how the document describes your fees, invoice process, and payment expectations. Use the following self-assessment questions to evaluate whether your contract is sufficiently detailed.
- Does the contract specify pricing and fees?
When possible, it is best to use a fixed-price contract (e.g., the fee is $6,000 per month) because such prices are easy for clients to understand.
If you have an hourly contract (e.g., the hourly rate for web development services is $100 per hour), there is a greater chance of client disputes. This guide will cover techniques to reduce invoice disputes on hourly contracts later.
- Is the contract clear on the payment due date?
The client should be crystal clear on when invoices must be paid. For example, you might state: “invoices are due for payment within 15 calendar days.”
- Does your contract have clauses related to late invoice payment? (If not, see our guide on how to charge late fees on invoices)
Including a clause about late invoice, payment penalties is a way to signal to clients that you expect timely payments. For example, you may decide to charge $100 or 1% of the invoice amount when an invoice is late.
- Does the contract describe your payment process?
After reviewing your contract, you will probably find that there are opportunities to improve your contract. After updating your contract, consider asking a legal professional to review the document for added peace of mind.
What if you’re just getting started in business? You might not yet have a business contract in place. Fortunately, you don’t have to start from scratch. Use one of the following free contract templates CheckYa has created:
- Freelance Graphic Design Contract Template: 5 Templates To Save Time In Your Business
- Virtual Assistant Contract: Sample Contract & Template
Step 2: Create Your Billing Process (Checklists, Templates, and Tools)
Now that your standard contract is clear on the billing process, it is time to bring your contract to life with processes. Simply follow these simple steps to create your billing process.
- Choose A Time For Billing
Start by choosing a regular time to manage billing in your business. Many freelancers use the “finance Friday” habit – they handle all of the company’s financial activities – including sending invoices – on Fridays. For example, consider scheduling 11 am-12 pm on your calendar each Friday to work on invoices. You will likely manage to bill promptly when you have a set time. Don’t worry – it is unlikely to take a full hour!
- Select A Digital Invoice Tool
Using a digital invoice tool like CheckYa is one of the best decisions you can make to improve your billing process. With CheckYa, you can send unlimited invoices and use a predefined invoice template to save time.
- Create An Invoice Template
One of the keys to learning how to bill clients is to use templates rather than starting from scratch. For example, an invoice template should include your business name, contact information, and payment instructions. To save time, create an invoice template once and use it every time.
- Verify The Invoice For Accuracy
Sending error-free invoices is one of the best ways to ensure you get paid on time. Therefore, we recommend taking a few minutes to verify that your invoice is aligned with the contract. Specifically, verify the dollar amount is correct and that you are sending the invoice at the proper time. If your contract states that you will send the first invoice when the graphic design draft has been sent, double-check that the draft has been sent to the client before sending the invoice.
- Check Invoice Payment Reminders Are Set Up
Recognize that life happens, and your clients may not always be ready to pay you immediately. They might be away from the office, have an illness, or simply be distracted by another concern.
To mitigate this risk, set up invoice payment reminders using CheckYa. CheckYa lets you send automatic payment reminders to focus on growing your business.
To put this process into action, see our guide to late payment reminders: 8 Polite Invoice Payment Reminder Emails That Work [Free Templates]
- Minimizing disputes with hourly rate invoices
Invoice disputes are more likely when your business operates with an hourly rate model. To see why consider the following situation.
Imagine you provide software consulting services to clients for $100 per hour. Typically, you bill clients for about 10 hours per month (i.e., $1,000). However, this month Microsoft released a new update that requires additional customization, which doubles your hours (i.e., an invoice of $2,000).
When a client sees that your invoice is double the usual amount, they might question the invoice and delay paying you.The solution to this problem is to communicate early and often with your client.
Start tracking your hours weekly for each client you work with. If your billable hours go above and beyond the average, contact the client to explain the situation. Use the following email template:
“Hi Client,
I’m reaching out to let you know that next month’s invoice will likely be higher than usual. At this point, I estimate that I will work 35 hours this month for you rather than the usual 20-25 hours. There are a few reasons for the higher fees:
- Reason 1 (e.g., “the new WordPress plugin we installed last month took longer than expected to configure”)
- Reason 2 (e.g., “there was a server problem, and I had to restore the entire website from a backup and complete testing to verify it was working properly”)
If you would like to discuss this or request a monthly maximum (e.g., $3000), let me know, and we can discuss options.”
The most important practice is to avoid surprising clients with unexpected invoice increases whenever possible. In the long term, switching to fixed fees is the best way to reduce hourly rate invoice disputes.
Step 3: Make It Easy For Your Clients To Pay You
Making it easy for clients to pay your invoices is also critical. In many cases, your client is probably even busier than you! They might be managing a team of employees, working with several freelancers, and having significant family responsibilities. With all of those concerns in their mind, paying invoices may not be their top priority.
At a minimum, make sure you are using a digital payment process. In the 2020s, there is no good reason for business owners to wait for checks to arrive by mail! CheckYa offers multiple payment processing options, including Stripe, PayPal, and Coinbase for cryptocurrency.
Bonus Tip:
What if your client tells you that they are unfamiliar with CheckYa? In that case, it is wise to set up a quick 15-minute meeting with your client (or the person who handles payments for the client) to walk through the process. Walking them through the process of paying with CheckYa only takes a few minutes for most clients.
For the best results, update your client onboarding process to include the invoice payment. Taking just 5-10 minutes to discuss the payment process with new clients when you onboard them is one of the best ways to avoid payment delays.
Step 4: Develop An Invoice Payment Follow Up Process
Following the initial steps in this guide, you have good habits and technology to send accurate invoices on time every week. Your next step is to follow up on invoices to ensure you are getting paid.
Since most businesses manage payments monthly, we recommend using a monthly invoice payment follow-up. Let’s assume your invoices are sent on the 1st day of the month and due for payment by the last business day. In that case, the following follow-up process will maximize your cash flow.
- Middle of the Month
At this point, you sent out most of your invoices about two weeks ago. Check to see if any payments have come in early. If you have received early payment, send a quick thank you message to your clients to let them know you appreciate their prompt payment.
- Last Week of The Month
When you get to the last week of the month, it is time to check how many invoices remain unpaid. Hopefully, you are using CheckYa’s automated payment reminders to save time.
- Day Before Invoice Payment Deadline (optional)
Checking and following up on invoices the day before they are due is optional. However, there are some cases where this level of invoice monitoring is helpful. For instance, it is wise to monitor invoice payments when working with a new client. In addition, extra invoice monitoring is helpful when you send an unusually large or complex invoice.
To understand why large and complex invoices can cause delays, put yourself in the client’s shoes. They might be used to paying $5,000 invoices… Then, they suddenly receive an $8,000 invoice. Even if you have communicated with the client in advance, they may still feel unhappy. They may have questions about the validity of the invoice. You can reduce the chance of payment delays by communicating with clients about these unusual invoices in advance of the deadline.
- Two To Seven Days After the Payment Deadline
Use CheckYa to send automatic invoice payment reminders. If the delays continue, you may wish to consider charging invoice late fees. If you are new to invoice late fees, read our guide: How To Charge Late Fees On An Invoice And Get Paid Faster. Surprising a client with a late payment penalty is rarely a smart move!
- Follow Up By Phone (optional)
Most of the time, sending a few automated invoice payment reminders is enough to get paid on time. In a handful of cases, email isn’t enough. You’ll need to pick up the phone and call your client.
Before calling the invoice, take a moment to prepare for the call by running through the following steps:
- Double-check that the invoice was sent to the client
- Verify that the invoice due date has passed
Once you complete these steps, call your client to remind them to pay the invoice. If the client has personal problems (e.g., an illness), wish them well and advise that you will follow up in a week. If they ask for a payment plan – like wanting to pay your $10,000 invoice in a series of payments – take the time to listen to the client’s concerns before accepting this change.
When you use CheckYa to send out invoices, you can automatically send invoice payment reminders. That said, monitoring payments and replies to your payment reminders is still wise. For example, your clients may have some questions for you before they issue payment.
Step 5: Optimize Your Business Payment Process
By the time you arrive at step 5, you’ve already been a more mature business owner than most people. You know how to bill clients and keep your cash flow moving smoothly. Following step 5, you’ll join the business elite by optimizing your business processes further.
Start by opening your calendar and scheduling a 30-minute appointment with yourself sometime in the next 30 days. This 30-minute session allows you to reflect on your business operations and look for opportunities to save time and make more money. During the meeting, reflect on the following questions:
- Which types of invoices are paid quickly? Which are paid slowly?
You may find that some services (e.g., a fixed-price SEO audit) tend to be paid faster than other service offerings. If this pattern persists, you may want to change your business to emphasize easy-to-understand services that clients pay for quickly.
- What invoice questions have you received from clients in the past month?
When you answer the same question repeatedly, that is a sign you should not ignore. For example, clients who pay by check might need support to switch to a digital payment process. In that case, consider creating a one-page “invoice payment guide” which you can send to clients to help them pay you promptly.
- How can you improve your sales process to improve timely payment?
No business owner should spend a significant amount of their time chasing unpaid invoices every month. During this review time, look for patterns among clients that pay late or cause you trouble.
For instance, you might notice that very small companies tend to lack a dedicated accounts payable employee, which means invoice payments are often delayed. In that case, you may want to adjust your sales process to focus on larger companies with better systems to issue payments on time.
Each time you run this optimization process, you’ll discover new ways to make your business run more efficiently.
How To Bill Clients With CheckYa: Save Time With Every Invoice You Send
One of the most powerful ways to get paid faster is to use a reliable digital payment platform. CheckYa lets you send unlimited invoices so you can grow your business efficiently. For client peace of mind, payments are processed by Stripe and PayPal. CheckYa also offers free invoice payment reminders so that you can spend more time growing your business instead of chasing overdue invoices. Sign up for CheckYa today!
