Billing may possibly be an annoyance in your business life. How much do I charge? When do I send my bill to the customer? When do I need to remind my client of a late payment?
Determine your hourly rate
Start by establishing your ideal annual income. First, determine the number of hours you want to work per week and remember to add the number of hours you need to manage your business. Then multiply that by the number of weeks you want to work per year. Then divide your annual income by the result of your multiplication and you get your hourly rate. Important note to consider: your annual income must include your professional fees.
Your business management time
The time you spend managing your business is non-billable. In other words, your hours of prospecting, networking or sending emails, billing, etc. This is why it is recommended to double your hourly rate.
Request a deposit
If you have a larger mandate, we strongly suggest that you ask your client for one or more deposits. One of the most obvious reasons is to help you pay your bills. In addition, by asking for a deposit, you will get a preview of your client’s seriousness.
Bill as quickly as possible
Obviously, this really is not the most pleasant part of your profession, but it is important to bill as quickly as possible. Unless you have an agreement with your client (invoice every two weeks, monthly, etc.), send your invoice along with your work.
Keep track of your invoices
Do not hesitate to write “Payable upon receipt” on your invoices. This means that the client must pay you as soon as they receive your work. A 30-day delay is usually granted, the time your invoice goes to accounting. Suggest a bank transfer for the method of payment.
After 30 days past the billing date, it is best to gently remind your customer that you have not received their payment. Don’t jump to conclusions; it’s quite possible that there was an oversight. After all, to err is human.
Do you need help finding your way there? We can accompany you!
President, Comptabilité sur mesure de l'Outaouais