Knowing The Best Time and Frequency For Billing Clients
Out of all the most common invoicing questions that I’ve been asked by freelancers, one of the most difficult is, “When should I have my clients and how often?” After all, there isn’t one exact answer since there are circumstances that vary from freelancer to freelancer and client to client.
However, the reason that freelancers want an answer to this query is because billing infrequently can affect your cash flow, which in turn can prevent you from paying your expenses and grow your freelance business since you don’t have the funds to market your services.
While there isn’t a one-size-fits-all approach, we have put together some pointers on how you can know the best time and frequency for billing clients.
Any seasoned freelancer will tell you that you need to bill your client’s right away. In fact, you need to bill early and often. This is a huge invoicing mistake that most people make… I’ve done it too!
If you complete a project on a Thursday night, then when your client checks their email Friday morning your invoice should be waiting for them. The reason? It prevents you from delaying, or even forgetting, to send out a bill. Remember, the longer you wait to invoice, the longer it will take to get paid. We’ve actually found that only 18% of invoices are paid if it’s been more than 90 days.
Another reason why you should invoice clients immediately is that client’s are happy to received the completed project. It’s like a shiny, new toy that they can’t wait to play with. The longer that they have this toy, the less they’re excited about it and it’s now depreciate in value.
Let’s put it another way. When you leave the doctor’s office or pick-up a pizza, a payment is expected before you walk-out the door. Being compensated immediately doesn’t mean that you’re a nuance or amateur. It’s a common-practice that the wisest of freelancers follow.
Bonus Tip: If you’re working on a particularly large project, always ask for a payment upfront. It’s the norm to request half upfront and half upon completion, or half upfront, 25% in the middle, and 25% when you submit the final project. If you have a long-term or recurring project, then you should set-up recurring payments where the client’s bank account or credit card is withdrawn the agreed-upon funds on a specific date.
The Best Days and Times to Invoice Customers
So. You’re one of those individuals who needs specifics. Well, you may be in luck.
The fine folks over at Vistr analyzed over 300,000 invoices and found that if you invoice weekly or every other week, then you should out invoices on the weekend. This can increase your chance of getting paid faster by 10 days. Maybe it’s because 94% of invoices are sent out during the working week, so sending an invoice when your client’s inbox isn’t flooded could push your invoice to the forefront.
If you invoice monthly, then your invoices should be issued on the 1st of the month, since these were paid in 30 days. Invoices that were issued on the 30th and 31st were paid in 38 and 37 days.
At the same time, people don’t usually open emails during the weekend – even though Saturdays have the highest open rate overall at 18.3%. If you’re sending an e-invoice then you’re better off sending an invoice during the week, particularly Tuesdays. A study from GetResponse found that 17% of all emails are sent on Tuesday and there’s an open rate of 18%, which is the highest of any workday.
As for the best time to send invoices, Campaign Monitor found that the peak times to send an emails are right before and after lunch, however 47% of all emails are opened before and after work.
How Frequently Should You Invoice Clients?
After determining the best time to invoice your clients, you now have to figure out the frequency of your invoices.
To save yourself a lot of time, I would bunch all of your invoicing duties together at the same time. For instance, you could invoice your clients every Friday morning after completing your work for the week. You could also invoice your client’s every other week, monthly, or on a specific date, like on the first of the month. This is actually up to you. However, you should sync your payment cycle with your client. If they handle payments only on the first of the month, then that’s when you should invoice them.
Again, the longer that you wait to invoice, the longer you’ll wait to get paid. Send out invoices as frequently as possible.
Setting an Appropriate Timeframe
To find out the best time and frequency for billing your clients, here are some pointers to setting an appropriate timeframe;
1. Discuss payments terms with the client in advance so that you can both be on the same-page.
2. Find out your client’s payment cycle.
3. Consider breaking-up your invoices into smaller amounts. It may be easier for a client to pay you $500 per week instead of $2,000 at once.
4. Think about whether or not you’ll keep working for the client while the payment is being processed. There’s a rule of thumb for freelancers, never work until you’ve been paid. However, I’ve found that there are exceptions. I have clients who are sporadic with their payments. Sometimes they pay me within a day and sometimes it’s a week. However, they always pay in under 30 days. And, since it’s a smaller workload, I don’t mind continuing to work for this client while the payment is being processed.
4. Know when you’re going to start following-up. It’s suggested that you send your clients a friendly reminder about an upcoming payment. It’s a simple way to avoid late payments. But, how long should you wait until you start chasing a late payment? As mentioned earlier, the longer an invoice goes unpaid, the less likely it will. I would chase a payment immediately the bill is past due. After that, a week for smaller payments and two weeks for larger payments is recommended.
Thankfully, platforms like Flint can automate this process for you by “pinging” a client until they’ve paid you for your services.
This blog comes as a guest post from John Rampton, CEO of Due.com. John Rampton is an entrepreneur, investor, online marketing guru, and startup enthusiast. He is the founder of the online payments company Due. Follow John on Twitter at @johnrampton.