Think sales is the hardest part of running a services business? Wrong. Cashflow is harder.
- You're entitled to a downpayment. Don't wait until the end of a project to send an invoice. As part of your negotiation and written contract, specify between 30-50% up front. It's customary, and it’s essential to managing your own cash flow.
- Track your invoices or risk total cash chaos. While technology like FreshBooks can help, invoices generated in Word are also adequate, as long as you keep a list of invoices by tracking number and dollar value. It’s not uncommon for clients to lose your invoice and ask you to resend it.
- Don't assume your client will pay you in a timely fashion. Ask for the name and email address of the person paying the bills (this could be a CFO, accounts payable director, bookkeeper). Email and introduce yourself. Make sure they have what they need to pay you (i.e. W-9, mailing address, ACH transfer information). Multiple emails and phone calls are entirely appropriate to establish and track payments.
Show me the money. How do you manage invoicing and cashflow?