Recently I told you how to eliminate your Accounts Receivable, but I really just told you “what” to do. Now I am going to tell you how to do it. I told you that the trick is to get paid up front.
“Great, you tell me! So two questions: How do I get my clients to do this, and how do I process this, without invoicing my clients?”
How to get your clients to pay up front
First, you have to get off of any hourly pricing model. Start moving clients to a flat rate pricing model. This dramatically simplifies everything below. Otherwise you have to estimate the monthly billing, charge their card that amount, and then reconcile with the hourly billing after each month. This, and hourly billing alike, are highly, highly inefficient!
First, start with new clients.
Starting today (or once you have your online shopping cart set up) all new clients pay online. There is simply no other choice. This is your system. You are going to add tremendous value for your client, and in order to do that, you cannot afford to be distracted by issues of payment. The only reason a client has for not agreeing to do this, is that they aren’t serious about paying you to do the work. But I bet they want you to do the work right away. So why shouldn’t they be willing to pay right away. If the client won’t do this, run. This is a red flag. It’s that writing on the wall, that you’ve regretted choosing to ignore every time before.
For Existing Clients
Don’t ruffle feathers with existing clients. They’ve been clients for a while, and they’ve been loyal. If you have clients that pay late on a regular basis, use that. The next late payment that comes, send them an e-mail with a link to your online product. Explain that, this will simplify things for them, and you. This way you don’t have to chase them, and they don’t have to worry about making a payment. It just happens.
You can always go to your clients with the suggestion. Even if they aren’t a “problem’ client where payment is concerned, you can say something like, “Hey we’re upgrading our systems, to make things more efficient, and we’d love it if you can help us out by moving with us over to our new system. In short, we’d like you to set up a recurring payment method with us. This way we no longer need to invoice you, and you no longer need to worry about making payments. You’ll get a confirmation each month when your payment method is charged, and you can cancel any time.”
That last sentence is the most important. It limits their risk. Knowing they can cancel any time, will give most people a great deal more comfort about it. The contrast is, if they have to rely on you to cancel, by sending you and e-mail, they have less, or really no control. Most people like / need to feel they have control, especially when it comes to finances.
A word on invoicing, tracking time, and efficiency
Invoicing clients is a highly inefficient process. Think how much more productive you and your staff can be, if they don’t have to worry about tracking time? All of that time spent tracking time, can add up. Imagine if all of that time were spent, getting the work done. Add the hours up collectively, and I bet it translates to increased capacity for more client work. The only question is how many more clients will you be able to take on?
If we’re going to charge flat monthly fees, and put our clients on a recurring subscription, then we need the software that gets this done.
WordPress makes it easy to manage all aspects of your website. Then Woo Commerce makes it really easy to set up a shopping cart in your WordPress site. You can be up and running in minutes.
Here are the steps:
- First install the Woo Commerce plugin
- I highly recommend the Stripe Payment Gateway plugin.
- Once I installed this, most people chose this option over PayPal.
- Add a new product
- Set the parameters of your product
- You can add the subscriptions plugin for recurring monthly fee clients. This is how you eliminate your invoicing.
- It is easy to duplicate products.
- It is easy to hide (eg) customer specific products, so they don’t show up on your website’s shopping cart.
- Create the product, get the URL, and send it to your client to capture payment.
Let’s see what this looks like. Watch the video above, don’t forget to subscribe, and please post your comments and questions below!