How to Get Paid Sooner
by Janet Attard
Having steady work from a big customer is great, but getting paid in a timely manner is even better. Use these nine tips to get paid faster.
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One of the nice things about being a contractor to big business or government agencies is that you can assume that you will get paid and the check won't bounce as long as you perform the work according to contract specifications.
What you can't be so sure of is when you'll get paid. Red tape and minor glitches can cause delays of six months or more between the time an invoice is supposed to get paid and when the check actually arrives.
Although there are some delays you have no control over, others can be prevented. Take these steps to minimize the chance for error so you get paid sooner:
- Make sure your bill includes necessary details, such as the purchase order or contract number, the name of the project, your company name, your employer ID (or social security number), your address and telephone number, a detailed list of products of services delivered (and the item numbers if appropriate), and the invoice price. Double check the purchase order to be sure that each item on your invoice matches what was specified.
- Get your contact to sign off that you have delivered the work as specified. Include that note with your billing. It's also a good idea to include a copy of the purchase order with your invoice.
- Make any discount for early payment (say a 2 percent discount for payment in 10 days) prominently visible on your invoice. Big businesses may act sooner on such invoices to keep costs down.
- Submit the invoice exactly as your contract specifies. If the contract says to submit the bill to account payables, don't send it to your contact. It might sit for weeks on his desk before he forwards it to the right department.
- Be sure your customers have a current W9 for your company. If you're working with a business for the first time, ask them if their accounting department will need a W9 - or just send it automatically with your first invoice.
- Be willing to accept payment using whatever system your client prefers. For big corporations, that may mean you have to sign up on a platform like Paymode-x.
- If you are billilng a federal agency for work, be sure you know and exactly follow their instructions for submitting invoices. These instructions can be very specific and detailed (see the EPA's instructions for submitting invoices, for example.) If you don't follow the instructions exactly your invoice may be rejected.
- Be willing to accept direct ACH payments from larger customers. Yes, you'll have to provide the customer with your banking information, but you should be able to set things up with your bank so they can only transfer money in, not out. You could also set up a separate business account just for receiving ACH transfers, and then move the money out as soon as it's received. That would keep your main operating account unaccessible to companies transferring money to you.
- Be willing to accept credit card payments and PayPal payments from your customers. Any processing fee you'll need to pay may cut into your profits slightly, but chances are you'll get paid sooner than if your customer has to send a check. Some customers may not purchase from you at all if you only accept cash and checks.
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About the author:
Janet Attard is the founder of the award-winning Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets. Follow Janet on Twitter at http://www.twitter.com/JanetAttard.