Get Paid Before You Do Any Work
How much time do you spend chasing money? Tracking time, invoicing clients and collections – the hours add up. Plus, receiving payment doesn’t happen immediately.
As you know, some clients are habitually late with everything, including payment. Clients who fall on hard times may ignore your payment requests. When that happens, you write off those hours. Those things reduce your profits.
Getting paid up front eliminates the chasing money headaches. Prepayment improves cash flow. And, you gain back time that was previously spent chasing money.
New clients often experience an urgency to start ASAP. Because of that, it’s the perfect time to review your payment policy to set expectations. Explain what you expect from your clients and what your clients can expect from you.
Vehicle, Not the Destination
An airline would never book you a seat, send you a bill and then wait to get paid after your trip. Use that payment system for your #accounting services. Read full post. #getpaidwhatyoureworth Click To Tweet
You just met with a prospect. And, she knows you’re the right person to get her financials in order.
Consider your firm’s services as a plane ride. It’s similar to someone who wants to travel from New York to Los Angeles. Think of the tasks you do as the vehicle; it’s not the destination. Clients hire you for the destination – not the tasks.
And similar to the airlines, you get paid first. Airlines would never select your seat, send you an invoice and then wait to get paid after your trip. Follow their lead. Set up a similar payment system in your accounting firm.
The Value of Getting Paid First
Now, let’s consider the mindset part. Which thoughts stop you from getting paid first?
- It feels risky.
- You’re unsure what to tell clients.
- What if clients push back?
Overall, the benefits outweigh the challenges. Getting paid first is a game-changer. Consider the hours spent tracking time, preparing invoices and following up for payment. This singular move uplevels your firm.
By now, you may be wondering how to get started. Often I hear, Loren, selling someone else’s service is so much easier. I don’t want to brag or have them think I’m pushy. I never realized this would be so difficult.
Rather than pitch new clients, educate them about your firm’s value. With this approach, you don’t have to brag or sell your services.
Collect payment as soon as she’s ready to engage your services. That’s because there’s an urgency to start immediately. Basically the sooner she pays, the sooner she benefits.
Think about the value of bottled water. A thirsty person is willing to pay more than someone who just quenched her thirst. If she wandered lost in the hot jungle for a couple days with no fresh water, then it’s value is even greater.
Your Value Fluctuates
Consider how this concept applies to your accounting services. Your perceived value is fluid. It fluctuates according to circumstances.
Your #accounting services possess it's greatest value before any work is done. When clients prepay for your service, you free up time and improve cash flow. Read full post. #getpaidwhatyoureworth Click To Tweet
Perceived value is highest before you start. Once the work’s complete, you’ve quenched her thirst. So your perceived value, and her need, lessens. That’s why my clients get paid first.
Check out the advantages to prepayment.
- Money for your business. Your cash flow improves. Time spent chasing clients for money becomes a thing of the past. What would you do with those extra hours?
- You set the boundary. Work begins once payment’s received. It’s that simple. You’re now free to concentrate on your work. No more worries about getting paid, or negotiating an invoice.
- Experience counts. Experience has more value than hours on the clock.
- Better clients. Your firm fills with clients who appreciate your services. The high maintenance clients don’t stick around. My clients love this unexpected benefit.
- Follow through. Your high value clients are quick responders. They implement your recommendations and respond to your questions.
- Problem resolution. Clients value your insight. She’s more likely to contact you if she perceives a problem rather than hide from you. As a result, you quickly resolve problems before they escalate.
Adjust Your Mindset
Here’s the toughest part – mindset. Although you know what you want, you over-think it. Getting trapped in the what if scenario brings progress to a complete halt. Mindset influences your decisions.
Clients actually expect you to ask for payment. So, don’t skip over it. It’s a clue that your mindset is over-thinking this.
Do the work so you comfortably discuss your fees with clients.
The mindset to get paid before you do any work.
- Awareness. First, admit you don’t like asking for payment. Your savvy clients already picked up on this.
- Create a policy. Revamp your payment policy. Decide whether you require partial or full payment upfront. Next, explain that the work begins once payment’s received. By the way, stick to your policy to avoids regrets.
- Own your value. List all of your skills. Then, add any experiences which add value to your work. Brainstorm everything. Include the special course you took several years ago. It may be the exact thing which solves your clients problem. Keep your list handy as a personal reminder during consultations with potential clients.
- Network with referral partners. Join a professional networking organization to build relationships with referral partners.
- Practice saying your terms. Use a phrase like Ready to get started? We need to take care of the payment first. Rather than think of it as asking for money, say it like this is part of your enrollment process .
Practice Asking for Payment
Practice, practice, practice. Your comfort level increases each time you ask for payment. Remember, your new client is eager to get started. Eventually, getting paid first feels natural.
Discussing your rates, and then asking for payment, brings up all kinds of money issues. It’s a reflection of your self worth and your beliefs. When that’s true, discussing money feels wrong. But, it doesn’t have to stay that way.
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