Home based work in the UK - getting paid on time

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One of the biggest problems of home based work is getting paid. Large companies often run 60 or 90-day payment cycles so you can wait around a long time before seeing your check come in. And as you're a small business you can also end up as a last priority for suppliers - so staying on top of your invoicing is really important.

Tracking down your payments can be time consuming though and time spent on the phone doing this is costing you money. Putting an effective payment plan into operation is a key way of reducing the time between invoicing and payment and an effective way of cutting out time spent on those follow-up calls.

Be clear from the start

As soon as a job is contracted set down clear terms of payment. Establish what extra costs there may be for changes to the contract, late payment or cancellation of the job. Set a fixed time period for payment of the invoice and be firm about it. If possible also get a signed contract that sets out the terms of payment and keep all email correspondence on the job.

Insist on a partial fee upfront

Many people involved in home based work insist on partial payment upfront. Whether it's a deposit to pay for out-of-pocket expenses, a percentage of the overall fee or a flat rate payment for research and consultation it's worth negotiating partial payment at the time of contracting. Think about it, hotels, hairdressers and dentists all require a deposit, why should your business be any different?

Keeping track of your invoices

It's essential to keep track of when invoices went out and when they are due to be paid. This is easy to do on your computer-based bookkeeping system and many software packages include an alert service when bills become overdue. As soon as this happens notify your client.

Dealing with reluctant payers

If a client says the original invoice has been lost, fax or email them a copy immediately and remind them that the original terms of payment still stand. If the invoice is already overdue tell them they will incur late payment fees if the bill is left unpaid. Have a series of prepared letters, progressively more firm in their demands, to send to clients as bills are left unpaid.

No pay equals no work

If a client hasn't paid a previous invoice and wishes to contract more work, refuse until the original bill is paid - no matter what they promise. Wait for that money to hit your bank account before starting a new job for the same client.

There's a fine line between getting money out of disorganized clients and alienating them and you've got to be tactful but firm about your payment terms. Work and act like a professional and you'll get paid like one.

© The Pink Fridge Online Magazine 2008 - Home Based Work