Getting paid for a service should be pretty straightforward right? But if you're running a digital agency you'd know that it's anything but straightforward. In fact, sometimes it's an absolute headache.
But with these tips for getting paid, you'll probably never have to experience these issues again:
- Clients disappearing before you're about to launch the site leaving you out of pocket
- Chasing up payments for finished work
- Doing small changes for clients after finishing the website for free
- Feeling obligated to discount when a client is having money issues
Check Your Mindset
Before I even dive into your payment options, the very first thing you need to address is your mindset around getting paid.
The thing is, money is the oxygen your business needs to survive. Without it, you don't have a business. You can't help anyone if you go out of business because you “felt bad” for invoicing. You need to start charging for what you do and not feel bad about it.
Would you get in an Uber to go to the local shop and not pay because it was such a short trip?
If a client wants you to make a change to their website once the project is complete, then explain that you only make changes for clients who are on a maintenance plan. However, if you agree to make small changes for them, they will never have a reason to sign up! And having recurring revenue is imperative to sustain your business.
Our very own Troy Dean probably put it the most eloquently when he said:
You're running a business, not a community service!
Getting Paid Overview
The workflow for getting paid goes a little something like this:
1. Provide proposal / quote / estimate
2. Send invoice
3. Invoice follow-ups
4. Get paid
5. Start work
6. Finish work
7. Get approval
8. Get paid
9. Launch live
In summary:
Don't start work or launch live until you are paid!
Options for Getting Paid
Milestone Payments
One of the best ways to ensure that you're not left out of pocket is to invoice for the milestone once it has been approved. This is great for larger fixed-rate projects such as website builds.
- 50% deposit to get started
- 30% after design and functionality have been approved
- 20% prior to launch
Milestone payments is one of the ways to get paid that we recommend in our Digital Business Blueprint Course.
Periodic Payment via Credit Card
Set up payments to be taken automatically at certain intervals. This is great as you don't have to worry about invoicing or follow-ups. This is great for cash flow as you know exactly what you are getting in and when.
For example: $9,000 project over 3 months would have a monthly $3,000 recurring charge applied.
50% Payments
This is good for customisations for existing sites. Get a payment upfront and a payment prior to launching the feature or change.
- Estimate range e.g. 5 – 7 hours.
- 50% upfront.
- 50% prior to launching live
Sprints
You can ask the client to pay for 2 weeks of your team's time. e.g. $10k per 2-week sprint.
Bending the Rules
For some clients that you like working with and have a good history of paying on time, the rules can be bent so that you invoice at the end of the project for small projects. Do so with caution.
Payment Tools & Software
Having the right tools and software can make your workflow a whole lot easier!
Here are my top picks:
- Project briefs: Google Docs
- Estimates: Better Proposals / Xero
- Bookkeeping & Invoicing: Xero + Stripe
- Recurring payments: WooCommerce Subscriptions + Stripe / Xero + Stripe
- Time tracking and margins: Harvest / Toggl
Additional Tools
- Freshbooks
- Pancake
- Free Agent
- Paypal
- Western Union
- Ezidebit (AU)
When it comes to choosing tools, be careful not to overcomplicate the systems that get you paid. The simplest solution is often the best. Find the shortest path to achieve the result before you go into fancy tools and automation.
Bonus Tip
For recovering failed payments on expiring credit cards in Stripe. Check out Stunning. Which is free if you have less than 250 customers.
Final Advice
The key is to keep it as simple as possible and make it automated. Credit card payments or direct debit are ideal options as you can set them up and they will charge without you needing to remember or follow up.
It’s your business so you are the one who sets the rules for how you’re paid. Set them to work for you so that you can spend less time chasing invoices and more time enjoying your life, your business and serving your clients. And if someone has an issue with your payment system then it’s a major red flag!
Let me know if you have any tools or tips that work for you when it comes to getting paid in the comments below.
