Getting Paid For What You Do, Tips for Collecting Payment


There are two issues to getting paid for what you do. The first issue is talked about frequently and gets lots of attention. That is getting paid for the value you provide, i.e. how much to charge  for the services or transformation you bring to the client. 

The second situation not often talked about is collecting for the services that have been contracted for. I have had a couple of instances come up lately where clients and acquaintances are not getting paid for what they do. This covers people cancelling contracts early, not making progress payments and/or not paying for services rendered. 

Here are some tips for collecting payment.

Always have a written agreement with the other party and include both the payment method and your cancellation policy. That way everyone knows the ground rules and they cannot come back later and claim ignorance.

Next determine your payment policy. First and easiest, is to collect the money upfront. In the internet marketing world, this is a common practice. When offering a study group, mastermind, or coaching program, most coaches will offer a full payment discount. This ensures two things: payment for the full program (which discourages dropouts) and it guarantees cash flow.

Second best to that is a two-pay or multiple-pay programs. The best way to do this is to schedule payments that run ahead of providing the service. If you have three modules, collect the first payment prior to the first class, lesson, or meeting. The next payment should be before starting the next module, and so forth.

An alternative is to have X number of monthly payments over the term of the contract. Multiple-pay agreements again provide the advantages mentioned above. Last desirable is to invoice for services rendered.  You provide the services, hours or product and then invoice for the work done.

What if they don’t pay? If it is at the start of the program you have a few choices. Hold them to your contract and insist that they pay. This is important if you are running a small group and the attendance is limited. One person out of a group of eight is a twelve-and-a-half percent impact on your revenue for that group. Another possibility is to have a cancellation fee that is not the full amount but does compensate you for the loss. Some coaches feel the bad energy and write them off as not being committed. They may turn out to have been a bad match for your program. 

If they have not paid by the due date, follow up immediately with a written reminder (email or letter). It could be that it slipped their mind or they missed the invoice. (By the way, you should invoice for payment regardless of payment method.) Set a specific date for them to respond. If possible, talk to them and find out the reasons for non-payment. Work out a payment schedule and put it in writing. You need to be firm and clear that you intend to collect the payment.

If you do not have the time or inclination to collect, have your bookkeeper do it for you. If not, you should have a negotiator or collector pursue the debt. While collectors like myself charge a fee, we are persistent in getting the collection since we do not get paid unless you do.

Getting paid for what you do is easy if you set up your agreement correctly in the first place, and you are diligent and prompt in following up on the non-payment.

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  1. Great advice on a topic that MANY self-employed business owners avoid like the plague until it is too late and they are in trouble.

  2. I always have a contract and for most of my services I get paid a deposit. My clients also like I send out “payment due in 3 days” reminder because they get busy. Great tips here, Bill!

  3. Mary Ellen Miller says:

    Bill, these are excellent tips. I have learned the hard way that no matter how “nice” someone seems you must not begin work until you have a written contract with them. You are so right to advise getting at least some of the money up front!