As a contractor, you likely work with a wide variety of clients. Drawing in new clients grows your business and increases your cash flow.
But there is always a bit of nervousness when you work with a new client. What if they don’t pay you? At some point, every contractor runs into a client that skips payment or doesn’t pay enough – that’s simply a matter of numbers.
How can you make sure that you always get paid on time by your clients, new and old? We’ve rounded up some of the top tips and techniques that the most successful contractors find extremely useful.
Work Only with Reputable Clients
Being choosy about the clients that you take on board eliminates a lot of the risk and the uncertainty about whether they can pay you.
What reputation does a certain client have? How long have they been in the area? Have they hired other contractors before? How did those projects go?
It isn’t always possible to know the full history of a client before working with them, but any information you can get ahead of time can help you make the best decision possible.
Also, don’t forget to trust your gut. The human mind is amazingly keen at picking up on even the most subtle of clues, even if you don’t process such clues on a conscious level. When you talk to a perspective client, what impression do you get?
Avoiding sketchy clients, even if you need the money, can save you heaps of trouble in the long run.
Communicate Payment Expectations Up Front
Payment disputes are often rooted in poor communication between the parties. This is something you can avoid from the start.
When preparing the contract for a certain job or project, make sure the wording makes it clear what you expect to be paid, when you expect the pay, and how you expect to be paid. Leaving any of those details out can delay things significantly.
It’s best to include payment liability wording in the contract as well. What will be the consequences if payment is not delivered on time?
The better the communication ahead of time, the less likely there will be a disapopintment later.
My Legal Valet offers help with preparing contracts for new and old clients. For a low monthly subscription fee, you can get all the basic legal help you’ll need and discounts for the more complex legal needs.
Pursue Payments Firmly
Asking for money isn’t easy for most people, even if you are owed that money. But, in the business world, you often have to follow up with clients to make sure they pay on time. You need to know what to do to force payment legally.
You can start by building a paper trail. Things like demand letters or referral to a collection agency could save you from having to go to court later in order to be paid. My Legal Valet can help you perform these tasks along with many other contractor-specific needs. If you need to take it further, our lawyers are ready to help you.
Getting as much information as possible about a client first, communicating clearly and promptly with them, and taking needed legal action when things go wrong are all ways to make sure you get paid in full and on time. When you don’t have to worry about prompt payment, you can spend more of your time in other activities, such as finding even more clients, lining up new projects, and doing the work you love most.