Getting paid fast is critical to maintain healthy cash flow in your business.
For both experienced business owners and those new to the industry, this report delivers a short, jargon-free set of tactics that can help you speed up payments to improve your cash flow and help you grow your business.
Section 1: Negotiating Terms
Negotiate your first payment up front
Getting some money up front means instant cash flow and ensures that your customers are serious about paying on time. The amount of the initial payment will likely differ from project to project and with each client so discuss early.
One of the worst things you can do for your cash flow (and risk level) is wait until final delivery for full payment. Break up the payments into numerous steps. The number is based on the circumstances. As a general rule of thumb, the more payments the better.
Request a smaller final payment
Often projects can be delayed when they’re nearly complete for any number of reasons and final sign-off can be difficult to obtain. Request a larger payment up front and a smaller payment for final delivery. ie. For 5 payment job, Split up as 30% up front, 20%, 20%, 20% and final as 10%. Negotiate the definition of deliverables Rather than detailing specific deliverables such as ‘100% completion of …