Get Paid on Time Without the Awkward Follow-Up
Ep32
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Stop Chasing Payments
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[00:00:00]
Bryan Steele: Welcome back. I'm so glad you were able to join me. Today on the podcast, we're covering the third and final in our series on beginning automations and setting up systems that work for you so that you don't have to spend your time manually doing work that you really don't have time to work on. So today, we're gonna be talking about getting paid because newsflash, you are not a bill collector.
Say it again for the people in the back. You are not a bill collector. We need to make collecting payments as easy as possible and [00:01:00] as seamless as possible and as frictionless as possible. And that's what we're gonna be covering today on our systems talk because it really gets difficult when you've done the work, you've put in your blood, sweat, and tears to bring success for a client, provide them that outcome they were looking for, and then they just start ghosting you.
And you send re- emails, and it's on your mind, and it's weighing on you, and you just don't know what to do next. And it's happened to probably just about every freelancer in the world at some point in time. This is a lesson we learn, and today we're gonna talk about the system so that that happens far less frequently.
~So~
So today we're closing the loop. Our goal here is twofold. What we're gonna be talking about is first, making everything standard and automated as much as possible, and second, to remove all the friction so that, that it's a seamless process for our clients, the people that we're working for. It's just easy for them.
[00:02:00] They don't have to think about it. Okay?
Standardize Your Payment Tool
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Bryan Steele: So what we need to do first is set up a series of items for collecting our payments. The first one is picking the right tool. Pick something that's going to be easy for you to use, easy for your clients to have access to. If you are working with somebody who's used to PayPal and you give them a Stripe link, those th-- you know, if you're going back and forth on collecting payments in different ways, like sometimes you're on Venmo and, "Send me money this way," another time you're sending an invoice over email, you don't wanna be doing different things at different times.
Pick one way of collecting payment, being able to send an invoice, say, "This is what is owed. This is when it's due," and only accept payment in that way. Do not take cash. I mean, you could take cash, I suppose. Don't, don't start using other platforms just because this one time the person needed it. Set your standards and stick to them so that it's clear and it's easy to follow, and then [00:03:00] all of the systems you build around it become much more automated, cleaner, easier for bookkeeping on the back end.
So choose that platform. We'll get into those platforms at the end of the episode, but just keep that in mind.
Invoice Templates and Reminders
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Bryan Steele: The second one is you need a single invoice template. Make it one time. "Here's how it works. Here are the payment terms. Here's the late fees that would apply to this." Obviously, it's a template, so you're not gonna have to put in things like the dates or the client names or things like that, but put in the pricing, like the services you provide.
"Here's the standard pricing." You shouldn't have to enter them uniquely every single time. Create templates. Create standardized invoices that you can just go grab. "Hey, it's time to send that person the invoice," grab the template, put in the details, send it on. It should be something that takes you less than five minutes to complete.
Third, turn on automatic payment reminders. It feels [00:04:00] painful when you're having to send one-off emails, "Hey, did you get that invoice? Can you pay that? That thing's due tomorrow It's hard to live in that space. That's where you really start to fil- feel like a bill collector. And so it's important to turn on the automatic reminders that all of these invoicing softwares have.
We'll talk about what to set up, but turn on those reminders so that there's every time it's due, when it's due, when it's a week late, your service platform, your invoicing platform, continues to contact that individual and remind them, "This invoice is still open. You need to pay it." And it's a standard invoice.
It's a standard statement. It's something that looks like it is automated, and in this case, that's okay. It's not you go... you know, coming and complaining and whining at them over and over. It's, it's a standard thing. "This is how it operates. You need to pay this. [00:05:00] This is still owed." And it lets them know it's not gonna be forgotten.
~It's in a system, and they're gonna be continuously contacted about it until they pay.~
Recurring Billing and Links
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Bryan Steele: Then, for those of you who are doing retainers or breaking up projects monthly, you set up recurring invoices. So when you set up the first one, you say, "This was gonna be the same thing," and it happens month after month after month, and you don't have to think about it.
The invoice goes out automatically on the set day of the month with the same payment details, same information as last month. One time set up, you don't touch it again Then making sure that invoices and payments are linked together. Some, this is easy. If you're doing like a PayPal invoice, the payment's within PayPal, so you can go and get that payment.
But if you are using a
separate invoicing software from your payment collection, like say Stripe or something like that, you're sending an invoice in QuickBooks, but you're collecting payment in Stripe, you need to make sure those things are easily connected to one another. So when they get the invoice, [00:06:00] there's a link, there's an easy way to know, "Oh, here is where I go pay."
Test for Payment Friction
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Bryan Steele: And then once you've got your system set up and you think it's all in place and it looks right, test it. Put yourself in the shoes of your customer, and send yourself the invoice and go through the process of paying it. And look for areas where there is friction. Where is it difficult? Where is it challenging?
How much smoother can it be? Because every click you have to make is another piece of friction, so you want to reduce that as much as possible. So when you go to test, look at that. If you were the customer, would you think this was an easy and smooth process? Or do you have to enter details multiple times, or, you know, the link doesn't quite work and you gotta go through three links to get to where you need to be?
Look at your process at the end of it and go, "Is this good enough? Is this going to make my customer happy? And is it going to be [00:07:00] easy for them to pay me?" So real quick, pick a tool that matches what your clients are expecting. Pick one tool, use it every time. ~Set up an invoice template. Sorry.~ Set up an invoice template.
Turn on automatic payment reminders, so you're not having to manually send those payment reminders. ~Set up recurring invoices if it's a monthly or recurring payment proc-~ Set up recurring invoices if it's a monthly or retainer package that you're selling. Embed the payment link in your invoices, make sure those are connected.
And finally, test the entire process to make sure as much friction as possible has been removed. Now, this might sound like, well, there's not a lot of AI or any... This is not intended to be complicated. This is not intended to be an AI-type automation. But you should not be manually having to send emails over and over.
~You should not be having to manually send reminders. You should not be manually making new invoices every single time from scratch.~ Set it up so that you spend as little time as possible on this process, and later on, you can get more complicated with your automations.
Free Invoicing Software Picks
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Bryan Steele: Now, let's talk about the software that you can use.
[00:08:00] The thing here is that all of the platforms you use for invoicing are going to be free, or at least all the ones I'm gonna talk about today. There's zero reason for you to have to go find something you have to pay to send out invoices. Because where all of these platforms make their money is on the processing fees, either credit card processing fees or ACH processing fees if it's a direct bank transfer.
So what we're gonna talk about today, assume it's all free. ~So the first I want to talk about is Zoho Invoice. Now, they have unlimited invoices, recurring invoices, automated reminders, expense tracking, time tracking, customer portal, um, online payments through a linked gateway. So they are not themselves doing the payment processing.~
~They're using Stripe or PayPal or something similar to that, so it's whatever those payment processors are charging for credit card transactions, things like that. But it's all in one place Uh, oh, I gotta check this. Um, Zoho Invoicing. Uh, let me check this. Hang on~
First tool we're gonna talk about is Zoho Invoicing. This includes all of the features you could possibly need. You can create custom invoice designs. It includes automatic unlimited customers, recurring invoices, automated reminders, expense tracking, time tracking, a customer portal. Lot of features included in it, and then you can make payments through a gateway.
So Zoho is not actually the payment processor. They use Stripe or PayPal or something like [00:09:00] that as a processor, so that's who it is that, that collects the credit card processing fees, things of that nature. But Zoho is where you would send the invoices from. Now, their free tier allows up to five hundred invoices to go out.
Now, for you, that's likely going to be fine, but it's something to be aware of, that in the free tier you're limited to sending out five hundred invoices in a single year. Unlikely you're gonna hit that limit. That's quite a bit, but it's something to keep in mind. So, ~uh,~ I would think that's a, a great way.
It's one thing to, to check out, but Zoho is a good one to look into. Another one is Wave. That is free invoicing, plus they do double entry bookkeeping. So none of the other free tiers, they don't do the double entry bookkeeping, which is making sure that, ~uh,~ you know, expenses and things are balanced on the inputs and outputs side, so the equation always balances.
~The credit card processing they do within Wave, so that transaction is two point nine percent plus sixty pers-- sixty Sorry.~ They do the credit card processing, so that fee is two [00:10:00] point nine percent plus sixty cents per transaction on the free plan. Square Invoices, another option. It's free, and that one's worth it if you actually sell in person.
So if you're meeting face-to-face, you can get an actual physical device you can plug into your phone and then actually take a physical card and run it directly. They have a three point three percent plus thirty cents per card, ~uh,~ and then they can also do ACH transfers, which is, ~uh,~ one percent with a one dollar minimum there.
So different for the different types of transactions. And then there's PayPal Invoicing. No subscription, but they do have the highest credit card processing rate at three point four nine percent plus a forty-nine cent fee per transaction. So those are a bunch of things to consider. ~Um,~ those are all free invoicing options.
Go look at them, evaluate them. A point to consider is some of them allow ACH transactions, some of them don't. If you're gonna do direct bank transfers, [00:11:00] depending on the size of your invoice, that percentage can really have an impact on how much money you're able to collect. So a two thousand dollar invoice where somebody can do a direct bank transfer might be a lot lower fees than if you're actually having to do it only through credit card processing.
So it's important to consider how your customers like to pay. Is it physical, in person? Do they just get an online invoice? And then can you collect bank transfers? You know, what, what does that look like? How would you make that happen? But those are all some options that are definitely worth considering.
All free, able to set up custom invoices, put in your payment details.
Fees and How to Price Them
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Bryan Steele: Now, I do wanna point out credit card processing fees S- some services allow you to include that as an additional line item. You're going to charge the customer those extra fees. Personally, I don't like that because I want to be as transparent as [00:12:00] possible with my clients.
I wanna say, "It's going to cost you this and no more." I personally view the credit card fees as the cost of doing business. It's the cost of me being out there and making it easy for my clients to pay for my services. If those fees are starting to hit you, build them into your price. Don't give a customer a fifty, hundred dollar, two hundred dollar surprise at the end of the day that actually what you told them it was going to cost is not what it's gonna cost.
It's gonna be a little bit more because of the credit card processing fees. I don't like that. I feel like it's every time I get a phone bill or something where it's like, "Here's the taxes and surcharges and extra that you owe," I always feel like I've been misled. And so in these situations where you're dealing with clients, and it's important that they're happy, just build that into your price.
If you need to raise your rates by a bit to cover what will [00:13:00] eventually be the credit card processing fees, then raise it there and tell the customer what the price is going to be upfront, and then don't charge them those fees on the back end. Now, that doesn't mean you have to do it that way. If you think it's customary and it doesn't bother you to charge the credit card processing fees, that's fine.
~I just think personally, it's a more transparent way to operate your business. And so that's what I've always done, is j- just be like,~ "This is what it is. This is what it costs," and, and make that as straightforward as possible. So those are some free software tools to look into, some ways to approach, and then how you're gonna build out your system.
Level Up With Deposits
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Bryan Steele: But if you wanna level up this automation, if you wanna level up your invoicing and payment collection to make it even better, here are some tips. First, require a deposit before you begin work. Before somebody starts working with you, they pay you something. Maybe it's thirty percent, maybe it's fifty, maybe you require a hundred percent payment up front before you even get started because you don't wanna have to fight for that on the back end.[00:14:00]
Put in those protections, set those things up. Second, retainers require auto pay. If you set up those monthly recurring invoices, you can establish it so that once they enter their payment information on the first invoice, they are automatically enrolled in auto pay the rest of the time. So when the next invoice goes out, they are billed directly.
That same card is charged. Now, you run the risk if their card changes or something like that, you have to go get that reestablished, but that's certainly a lot less chasing of payments. Then if you've got larger projects similar to the retainer, you could break things up. You could say, "I'm not going to charge you all of it up front, but maybe every month you're gonna require, ~uh,~ twenty percent payment," 'cause it's gonna take you five months to get through everything.
So set up some milestone payments. Maybe there's a certain part of the project where there's a clear deliverable, and they have to make payment that point, and fifty percent has to [00:15:00] be paid by the time that milestone is reached, or you stop work. That's another option.
Late Fees and Urgency
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Bryan Steele: Putting in automatic late fees, so if they do not pay on time, they're getting those reminders, but they do not pay on time, there's a extra fee applied to the invoice automatically.
Now, this isn't necessarily an item that you want to collect on. The idea is not necessarily, oh, I'm gonna get a bunch of extra money from collecting on late fees. The idea is that when you reach out, you can lead with generosity. You can re-- "Hey, that invoice is due next week, and if it's not paid on time, there's this penalty.
There's this late fee," and it gives you... Like, I w- I don't want you to have to pay that, so, you know, if you could take care of that this week, that'd be fantastic. You can put those into your automations to make that clear, and putting that into your system just gives that extra little nudge to say, "I need to pay this now, or else I might be charged later on."
Additionally, [00:16:00] that gives you the opportunity on the back end that, "Hey, you missed, you missed a payment? You know, I'm gonna waive that as long as you can make payment this week. If you can make a payment this week, I'm gonna waive that so you... But, but it needs to be paid." It gives you an opportunity to put in a little bit of, I don't wanna say scarcity, because, you know, that's a selling tactic.
"Hey, if you don't sign up now, you know, the, I'm not gonna be able to work with you later on." This is sort of the same idea. You're creating a deadline. Like, hey, if you can take care of it right now, there's a benefit to you doing this right now. So you're just creating a little bit of that urgency that they should do something.
~They should take action instead of continuing to let it lapse, letting those late fees pile up.~
Bookkeeping and Referral Automations
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Bryan Steele: And then auto-file your receipts to bookkeeping. Make sure you get it connected. If you're using something like QuickBooks, you can set it up so invoice payments and things like that are automatically connected there and tracked.
It makes it easy at the end of the year to do tax season. And then trigger the post-payment ask. [00:17:00] So what's the next thing after someone pays? Once it... An automatic email that says, "Hey, can you give me a review? Is there someone else that you know of that I would be able to help?" Ask for those referrals. You can create automations around them completing things and then asking for the next thing that would continue to benefit your business.
It just makes you look much more professional in the process, more put together, and in a situation where you can take advantage of things.
Recap and Next Episode
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Bryan Steele: So glad you're able to join me on this episode. It was fun to think through some of these automations that you might put into place. So just a, a quick recap. We talked about how to go back and make sure that leads don't fall through the cracks.
When somebody reaches out to you, it's not days before they hear from you. You know, capturing those leads immediately and automatically and getting them to automatically schedule meetings with you so you can just show up and have that conversation with, with those individuals who are interested in working with you.[00:18:00]
And then finally, how do we make the payment process easy? How do we make that streamlined, simple, smooth, to where it's not taking you time, and you are not having to become a bill collector? Next episode, we're gonna be talking about side hustles compared to the gig economy, and why I really like the side hustle that we build versus what it looks like if you were to go do DoorDash or Uber.
We're gonna talk about what's going on there, the benefits and the drawbacks of each. So I can't wait for that episode. I will see you then [00:19:00]
