5 Ways To Make Sure You Get Paid | Madeline Pratt | Skillshare
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    • 1. 5 Ways To Get Paid (2019)

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About This Class

Working with service-based business owners, I realize all too often how their cash flow is negatively impacted by clients failing to pay them in a timely fashion. In this class, we will explore ways in which you can build healthy business boundaries with your clients to ensure that you get paid for the work you do. We will learn skills for building contracts, automating your invoices, collecting on client debt, and much more!

Transcripts

1. 5 Ways To Get Paid (2019): hello and welcome to five ways to make sure you get paid. My name is Madeline Pratt, and I'm the founder and CEO of Fearless and Training, which is a creative consulting company that specializes in working with female founders, entrepreneurial accounting firms and technology innovators to help them with their marketing, branding and sales. Now I'm a small business center myself, so I'm really passionate about this topic. I believe that if you do great work, you deserve to get paid for it. So let's talk about some ways you could make sure to do that. First, we're gonna talk about pricing and proposals, in particular, how communication and the language used can ensure that you get paid for your work. Next, we're going to talk about engagement letters and how these could be an important tool if a client fails to pay you in a timely fashion. Next, we'll talk about payment details and in particular best practices in terms of capturing them up front. From there, we'll talk about invoicing and in particular, about the ways you can use cloud technology to automate it and save you time and last but not least, we're gonna talk about collecting on client debt when somebody fails to pay you now, we mentioned my name is Madeline Pratt. So just to give you a little bit of info about my background, I've always worked in technology, and in particular I focused on sales, marketing and business development to help companies as smallest start ups all the way up to Fortune 500 really understand how to leverage their products to benefit their target markets, which has predominantly been accountants and small businesses. I am a total tech nerd. I'm super passionate about leveraging the best tools and solutions to make the most for your small business on. I'll talk about some solutions today that I think can help you in the process of getting paid. I got to start out with a little bit of humor here, but this is really about taking an attitude. I think that we sometimes get embarrassed or shameful when we have had a situation where we've done great work on a client hasn't paid it for us. So I want to adopt this attitude courtesy of our friend Rhianna off. You know, if you've done great work, you deserve to be paid for it So let's talk about the ways that you can do that. It starts with communication on in particular communication in your early conversations with clients about your pricing and then making sure that you clearly outline that information in your proposals. So sometimes I think that business owners feel a little awkward talking about money with clients. But this is a super important conversation A have because you're going to do great work, so you deserve to get paid for it. So one of the things that I always recommend is when you're having a qualifying conversation with a client, just ask. Were clear questions about what they're planning on paying you, or another way to put it is say, Hey, what is the budget you've allocated for this worker? This project and this is a great way to you getting qualify out somebody his super chief, but also to make sure enter into a conversation about what you're pricing is up front. So they're not surprised when the bill comes their way. In addition of that, when you start having the conversation about pricing, it's really important to then document those things in your proposal. So not just documenting how much you're gonna be paid. But also when you're gonna be paid and how you're gonna be paid is super important. So, you know, if you're gonna be paid 50% of front and 50% at completion, that means he outlined in the document. If you're gonna be paid on a monthly recurring basis that needs to be outlined to you also need to make sure that any other clear dates and deadlines air in there. So, for example, if you know you're doing the work in stages and you've got a timeline there, make sure outlined those dates and deliverables in your proposal so that the client can't say that you didn't do the work that was expected by a certain time period. In addition of that, clear days also include your payment date. So if you are going to be, you know, drawing funds from the client's account on the fifth of every month, make sure that that's in there. So when you draw those funds, they can't claim that it happened as a surprise. Lastly, your proposal or some people call him contracts should make sure to really, really outline the details of what it is you're going to be delivering. So say, for example, you're gonna be doing a website overhaul for somebody. Well, maybe, you know, the first part of the engagement is gonna outline the fact that you're gonna do wire framing, and then you're gonna review that with the client, and then you're gonna build a V one and then you're going to deliver that and then a V two and they're going to review it. And then the final version is going to go live. And so, by outlining all of the pieces that go into that final deliverable of a beautiful new website, you can make sure that the client is really clear as to what they're under. The bargain is what you're into, the bargain is and how that work is gonna be delivered along the way so that they can't ever claim that you didn't hold up your end of the deal. So pricing and proposals, it's all about clear communication up front, making sure to detail not just how much your services they're gonna be, but how you expect to be paid when you expect to be paid on when the work is going to be delivered to the client. Next let's talk about engagement letters and the's if you don't know what they are, are a really, really important piece of engaging with a client. Some people call this the actual contract, but what this is is the legally binding language that is included to your engagement with the client. So this is like, you know, you got your proposal is the first page and then this is the contract part as the second page that really make sure that the client is holding up the end of the Dale. So you really want to make sure to include something like this for the client? A signing on the dotted line? Not just so The services you offered, but also the terms of service, of terms of service are you know, we expect our voices to be paid, you know, in this time frame, and you will be built at thes dates. The start and end of the engagement is these dates. Other things you might want to include is you know, whether or not you give a guarantee on your services, but basically all of the language that you need to outline to make sure that it's very clear what you're committing to provide for the client as well as again what you're expecting from the client. So one of the things that a lot of people forget that they can include in an engagement letter is a penalty for a non payment. So say you go to charge the client and their cards declined or they give you a check and the check bounces or, um, maybe, you know, you You go to collect monies and they bounce. They don't pay you for the work you've done. Whatever is the situation, you want to make sure that you have language that really outlines. You know, Hey, there's gonna be a penalty that for that whether it's a flat fee or a percentage of the overall contract value but something that kind of enforces, you know, the facts that if you did your work and they didn't pay you for it, they're going to be impacted because they impacted you in your cash flow. So to re recap here, an engagement letter is a legally binding document that's included as part of the engagement process. It's it's, you know, considered a contract by a lot of people on one of the things because it is legally binding . That I strongly recommend is, even though you can go and find these with, like, generic language online, make sure to get them looked over by somebody who has some legalese experience and also really knows the ins and outs of your business so they can tailor it to make sure that it's really customized around your type of services and your types of clients, and then also said that you could make sure to include things like penalties for non payment. Now next, let's talk about capturing payment details, and this is super super important because I think that best practice is toe. Always, always get your payment details up front from a client, and the reason I recommend this is because it's actually an incredible way to qualify out anybody who's gonna be sketch you. And it's time to get paid for what you've done. And so by requiring payment details as part of the contract process, you can actually read out anybody who's gonna be weird about paying you for the work you've done. So what I recommend is using tools and technology. I use a tool called practice Ignition. It's a great tool that allows you to not only, you know, stores a bunch of different engagement letters and sample service language, but they also have an ability to make it possible so that a client can actually sign and agree to a contract without entering payment deal details, which I love. And then they store it securely. And then when it comes time to be paid, they just automatically charged payment details on file. So super great, seamless. And one of the things that I recommend is, you know, if you don't use a tool like that. Still, there are ways for you to capture payment details so you could include it in a form as part of the contract process. You could also, you know, gather it from the client over the phone. But whatever you do to get those payment details, just make sure you're storing them in a secure way. So store them in a secure password vault, or like in a drop box somewhere. And thats cloud based that you know, isn't just sitting on your hard drive in a non secure way, because clients who give you their payment details may ask, How are you storing this information To make sure that it doesn't get out to other people so super, super critical. If you are getting them up front to keep it in a secure way and then also, you know, again, if you can, whenever possible, just include this as part of the contract process. So it just feels like part of signing up for your services. And if clients ask, you have every right to say, Yeah, you know, we just don't embark on doing work until we've got payment details on file because that's the way that we can always ensure that we get paid for the work that were were doing and and, you know, it's a nice and subtle way of saying, Look, you know, we deserve to get paid. And if you're not gonna be a person who pays us or you're gonna trail that invoice out for 90 days, you're not if it to work with us and again, this is a great way to qualify out some people in a really subtle way. But also to make sure that people do want to work with you are gonna pay you in a timely fashion. So let's talk about automating your invoices because clad accounting software exists and it is here to help you. So one of the things that I kind of boggles my mind is that people still, like log in, create invoices every month and send them off. Some people, like still mail them that that completely blessed my mind. Um, you don't have to do it that way so you can use cloud accounting software to save you time . You can either create your invoices on the fly, or you can customize them and set them on schedules to automatically deliver to your clients. Sales receipts are great option for something like that. So if you're charging clients on a recurring basis, you can also store their card details in your cloud accounting software and just have them send a sales receipt every month for that recurring payment. In addition to this, your cloud accounting software can actually integrate into your proposal system. So, for example, tools like Zero and QuickBooks online integrate directly with a tool like practice and ignition, which is really powerful because there's not software. Actually, automatic automatically creates and sends an invoice to your client, which is pretty cool. But one of the big benefits of cloud accounting software is that it allows for you to do two things. One, If you integrate a payment gateway, you could have a pay now button on your invoice, which I don't know about you. But if I get an invoice and it's like expecting me to send a check or like call it on the phone or you know something like that, it's just not going to get handled right away. I have to interrupt my day to take care of it, you know? And so I'm like, Why did you even email this to be if you could have just, you know, called me or something like that to get the payment details. If you work with an online accounting system, please please, please out of payment Gateway. So you could get that pay now button, because the second somebody opens up, they realize, Oh, cool. I can put my credit card details in in three minutes or less, and studies have shown the businesses that have that pain out functionality can get paid 10 times faster. So this is just an integration you can addle into whatever you're accounting Ledger is. This could be QuickBooks online. This could be zero. This could be fresh. Books be wave whatever platform you use. Adding the payment gateway will put a button on your invoices as pay now and get your money right away. Now, the last thing to remember is that not only can you know, cloud accounting suffer, do things like sales recedes and having integrated payments. But you can also automate reminders, which is so amazing. So rather than having to follow up with a client and say, Hey, you owe us this money Hey, you still haven't paid us. You can set up automated reminders, you know, once every three days or once every five days or, you know, whatever you want the cadence to be to kind of ping and bugged the client for not paying it . In addition to that, you can also c inside of these Softwares, whether or not a client has viewed an invoice, which is a little big brother. But I kind of love it because if somebody hasn't paid me and I know that they've opened that invoice, I feel like I have ever right to send an automated reminder and be like, Hey, I know you looked at this, make sure it gets paid. So the last topic I want to talk to you about today is a really, really important one. And this is collecting on client debt. And I think that sometimes when we don't get paid for the work we've done, we get a little bit of embarrassed, were ashamed because we did great work and then somebody was a total jerk and didn't pay us for it. So I am here to just tell you that one. This happens to every small business owner at some point on that you deserve to get paid for the work that you dio on. This happened to me early on in my company, and it wasn't for a huge amount of money, but I did some consulting as I was getting started with somebody who was like, Oh, you know, this is gonna be our first engagement, and it's gonna lead to a lot of consulting with our firm blah, blah, blah, blah. And I did great work and I sent the deliver bulls and I sent them over to the client and I sent the invoice and it sat there for 30 days, 60 days, 90 days, and they didn't pay me and they got automated reminders. They just still ignored it. So what I'm here to tell you about, in some ways that you don't have to waste your time or your energy chasing unpaid invoices . It feels really terrible to have to spend your time and energy doing that. So what you can do is connect a solution like call box to your accounting suffer, which can easily send clients to collection. And so again, this is not for every client and voice that hasn't been paid in two days. But if somebody is ignored it for over 30 days and it's now past due, you might want to consider extending them to collections, especially if they haven't reached out to you and been like, Hey, you know, we're a little late on this. We're gonna be getting it to you. If there's no communication happening that clients just going dark, you have every right to send them to collections. So what call boxes going to do is it's gonna connect to your general ledger, pull over any outstanding invoices and do it quick evaluation of which ones could or should be sent to collections. From there, they're gonna ask you a quick series of questions about whether or not you really want to have that client handled with care or you don't really care and want them to just be paying you as quick as possible. And then, from there, they have partnered with collections. Agencies will pick a collection agency that's a fit for the situation and then let you know which percentage you know you'll get in terms of the invoice value and how much the collections agency is gonna take for doing that work. So it's a really seamless way to just make sure that you get paid for for death that's outstanding on you know, it's something that more and more business owners should be doing. You know, one of the things that blew me away when I started researching this situation was the fact that, you know it really is a situation that's that's time related. So 12% oven invoices value is lost on average for every month that goes unpaid. So you know, if it's over 30 days, you should really consider whether or not you want to send the client a collection. You can have a conversation again, try and reach out to the client. But if they're not responsive every day you wait. The invoice is actually depreciating in the potential value for you to collect. The other thing that blew me away was the fact that this is such a common problem. So $800 billion every year is owed and passed to small businesses in the U. S. That's like 5% of GDP on. Only 25% of that money is ever sent to collections. And so I just don't want to see you have your cash will impacted in this way. If you're somebody who's experiencing the fact that clients are only new money and they're not paying, you take care of the problem. There's tools and solutions out there for you. And the other thing is that time is really of the essence here. So you know, whether it's a 90 days late, invoice versus 180 A's late invoice, there's gonna be a 40% difference on how much more likely that collection company is able to collect on that debt, so do it sooner rather than later, you know, And I feel like this is kind of a rip The band aid off moment. You know, you're already feeling crummy because the client hasn't paid. Rip the band aid off, send them cook two collections, get paid what you're owed. So just to recap what we covered here today, first of foremost, we talked about the importance of just being firm and clear about pricing upfront and your conversations as well as in your client proposals. From there, we talked about the importance in making sure that your contract includes an airtight, legally and binding, legally binding engagement letter, which you can enforce as needed. And you should make sure to add some sort of clause or information about what happens in terms of penalties for non payment. Next, we talked about the importance of trying to capture client payment details up front on that . If you do that, you've got to just make sure you store that information in a secure way. We also talked about some tools and technology like practice and ignition that might be able to help you with that process from there. We talked about the power of cloud accounting, and we talked about, like, zero and wave and fresh books and cookbooks and all these tools and solutions that can help you with things like automated invoices and invoice reminders and sales receipts to make sure that you get paid without you having spent to spend a whole lot of time and energy chasing those invoices to make sure you have paid. And last but not least, we talked about the fact that if a client hasn't paid you on time and has stopped being responsive to you, you have every right to send them to collections. And call box is a really great solution that you could add on to your cloud accounting ledger that makes this process really quick and painless and just allows you to focus back on your business so that they're taking care of the hard work of sending that client to collections and then making sure that you get paid what you're owed. So that's everything we covered today. I want to thank you so much for your time and for joining us here for five ways to make sure you get paid. If you've got additional questions here. Some great ways to reach out to me and my team. So hello at Fearless and training dot com is where you can find us. I am on social media at Madeleine K. Pratt. That's Instagram, Twitter, LinkedIn And, you know, if you're interested in checking out call box, here is a link. So called ox dot co slash fearless is a great way to go visit their site. Look at the solution to see if it's a fit to help you get paid on your outstanding debt. But until next time, go out there, do amazing work and make sure you get paid for it.