Freelance Billing Issues. Know You Are Not Alone!
If you are a social media manager and out on your own as a freelancer, getting paid on time is a huge factor to your overall business success.
Clearly, this is a vital part of running your business, yet many social media managers don't have their invoicing, billing and payments set up the right way to get paid consistently and on-time.
How do we know?
Billing issues and questions about invoicing are both faqs in our Social Media Managers Facebook group.
In this article, you will learn
- how to best prevent billing issues
- what the most common freelance billing issues are
- how to resolve billing issues with your client
How To Best Prevent Billing Issues
“An ounce of prevention is worth a pound of cure.”
Setting up an automated system of billing and invoicing is the key to preventing billing issues.
However, before setting up such a system, it is important to do three things first.
- First, understand what to charge so you are getting paid what you are worth.
- Second, add language to your contract which discusses billing, invoicing, payment plans, and late fees.
- Third, communicate the importance of timely invoice payments to your clients.
If you do all of these things before starting work, you can prevent a lot of common billing issues.
Resolving The Most Common Freelance Billing Issues
Now let us go through some of the most common Freelance billing issues one by one and give you some possible solutions.
Payment is Late
We suggest you send an email reminder with a clear deadline as soon as the due date has passed.
If this client is a repeat offender, immediately set up a recurring payment plan.
Don't forget to add a late payment fee clause to your contract and enforce it as soon as payment is late per the contract. This will most likely encourage your client to pay on time next billing cycle.
Client Refuses To Pay
If a client refuses to pay an invoice, get on a call or visit in person if possible. Most often, they have a valid reason, at least in their mind, for not processing payment; it could be that they are unhappy with your services, or that they are in financial dire straits. Find out what the problem is; you can resolve an issue with your services, but you can't resolve an internal financial issue.
Stop work if the payment is x many days late (see your contract!) until payment is received.
Last but not least, you can use a debt collector to get money owed to you.
Tracking Unpaid Invoices
If you have a lot of clients, tracking unpaid invoices can be a bit of a task, unless you automate the process or hire someone to be in charge of this process.
We recommend you simply use a tracking tool; here is a list of tools to check out.
International Billing Issues
Cross-currency billing is another issue that leaves freelancers with more questions than answers. However, it doesn't need to be.
Invoice Ninja wrote a helpful article about issues international clients and international billing might bring.
Clients' Facebook Ads Get Billed To Marketer
If we got a quarter for every time this issue came up in our Facebook group…!
It is such an issue, we wrote an article about it.
Payment Processing Fees
Who pays for the processing fees and how much is too much?
It seems that freelancers are confused about who should pay. It is you, the service provider who has to factor payment processing into your fees.
This fee should apply to all of your clients, regardless of their payment method. Charging extra for card transactions only could land you in some legal hot water.
Setting Up Recurring Invoices
This should be an automated process so that even when you are busy, these invoices go out on time.
When To Bill a Client
There seems to be some confusion about timing. When should you bill your clients? If you have automated the process and have recurring invoices going out, the date doesn't matter much. However, if you are doing this manually, setting it up for the first or the middle of the month makes the most sense. Set a calendar reminder and add it to your to-do list.
Always get your first payment with the signing of the contract so that you get billed for work to be done, not work completed. It is much harder to get paid for work done without a solid and clear contract in place; don't start work without a contract and payment.
For invoice disputes, always refer back to your contract! We can't state it often enough; without a contract, you are not protected – not your work, not your time, not your reputation.
It goes without saying that you should also save email correspondence as well as text messages about payment agreements in case an invoice dispute erupts.
Are there any additional billing issues we didn't cover?
Leave us a comment below, and we'll tackle that in another article!
I am a Certified Social Media Manager, Strategist, International Keynote Speaker, Organic Specialist and Agile marketer! Blogging is my creative outlet. Running, hiking and skiing are how I recharge. You'll recognize me on stage and online by my always present orange glasses, a nod to my Dutch heritage.