Billing

Being paid is a common topic in this Blog, but how often should you look to collect that which is owed to you? A good question with a fairly routine answer.

In the corporate world, most employees are paid twice a month or every other week. That is the standard form of wage compensation in just about any industry. There are some variations, such as those fully commissioned or temporary appointments. But, all in all, when you work in a corporate setting, the expectation is to be paid around twice a month.

In the small business world, particularly for sole proprietors, you will only be paid once you bill for the services performed or products sold. If you are not in a point of sale retail shop, that expectation is normally once a month. Billing your clients on the first day of the month with payment expected within thirty (30) days is standard. But, unlike the corporate world where you can always expect to be paid on that schedule, the small business owner is at the mercy of several factors.

First, does your client respect your terms and note the due date you set in the invoice? Second, do they have the correct authorized signatures on hand to cut your check on a timely basis? And, thirdly, does your client have a ‘check run’ schedule that does not consider your payment terms? In this case, your check is issued with all other checks that need to be paid for that particular timeframe. Additionally, if payment to your client is coming from a larger government agency, that can stall your payment for longer periods of time.

Many factors influence payment but do not let any of them dissuade your billing. A consistent payment request will be appreciated and help those paying you to understand your process. Bill on the first of the month, expect payment for the last day of the month, and feel free to have late payment percentages as a part of your billing information. Follow-up in thirty (30) days if the bill has not been paid. And so begins your collection cycle.

Clients cannot pay you, for the most part, if you have not sent them a bill. Set up your billing process and remain consistent throughout the firm’s life cycle. Bill, Payment Reminder, Collect.

When approaching payment, billing, and invoicing, think about how you reward your dog- Sit and Treat. In the business world, it is Bill and Be Paid. The more consistent your efforts are in both these worlds, the more the repetition should pay off.

Be well.