How to get 4k in one day

This blog post was first published on 31st August 2019

As entrepreneurs we work hard to create incredible products and services to positively change the lives of others. From time to time things don’t work out as we plan and sometimes we don’t get paid for the services we provide. A few weeks ago I helped a friend recover £4,000 in unpaid fees into her business. It’s time to grab a cuppa as I share with you my tips for ensuring you get paid for each invoice raised.

Getting new clients is great, getting paid by new clients is even greater. Recently I helped a friend recover £4,000 of unpaid debt under a contract for services she had provided but hadn’t been paid for.

Get It in Writing in One Document

The first step to getting paid is to get your agreement in writing. It might sound a little obvious but time and time again people can’t get the money they are owed because they simply have a few emails and the remainder of the agreement was by telephone or across Whats App or Instant Messages. Get all of the terms of your agreement in one place.

Deliverables

Set out clearly what services you’re offering and when you’re going to do this. One of the easiest ways to do this is in a Schedule appended to the body of your agreement. That way you can easily update the Schedule for each new client and many of the terms of any services agreement will stay the same.

Payment Terms

Set out when you will invoice for the services and when the company is due to pay you. In my Contract for Services agreement I set out two options for this so that you can easily slot in the dates when you expect to receive the funds, whether that’s one lump sum or payments by installment.

Late Payment Clause

You should be adding the provision to claim for interest for late payments within your terms and conditions and on your invoices. You might never actually plan to enforce a late payment debt - life is busy and if your clients are anything like mine they are actually totally wonderful, the may sometimes just have other priorities and payment of the next installment slips their mind - however, if you include the provision within your agreement then you can rely on it if you need to.

Getting Paid

Provide your invoice in a timely manner and ensure that you direct it to the correct person who manages accounts. Clearly state in your covering email when the payment is due. If payment is not made within the correct timescales then allow 48 hours to pass and send a polite reminder. What you do next will depend on what sort of business relationship you want to have going forward. You are entitled to receive payment for the sums owed but small businesses may get behind with their accounts. Keep any communications friendly, following up any calls in writing.

Once 28 days has passed, send one final request for payment and advise that if payment isn’t made within the next 48 hours you will apply interest to the debt. Should payment still not be made then raise a revised invoice including the late payment fees. You can seek payment for unpaid debt via the small claims court. The amount of the fee depends on the amount owed, it is cheaper to register the claim online. If the debt is less than £1,000 the court fee is £60, for claims up to £5,000 the fee is £185 and claims over £10,000 are 4.5% of the claim value.

To avoid the debt recovery element stipulate payment terms in your contract which allow for payment on account or in advance of the services being provided. This will help to avoid wasting time on debt recovery.

If you’re looking for a ready made agreement for services then click here to download a template contract for your business.