In between Arthur Andersen going out of business and working for Deloitte, I had my own business strategy and marketing services consulting company for five years. I was fortunate to roll right off of my full-time job with Andersen into a two-month consulting project for Protiviti. Over the years, I worked with several of the mid-tier consulting firms either on internal projects or as part of client consulting teams, was a temp for Deloitte (who later hired me full time), and a consultant for some small business clients.

I always tell people that the most difficult part of having your own business can be getting paid. When I did my projects for the consulting firms, I went on their payroll or was paid through a temp agency – and let me tell you, that is one sweet situation to have your own business and still get paid on a regular cycle.

While I loved my small biz clients, sometimes trying to get paid was like prying sweaty bills out of clenched fists. I was a solopreneur bootstrapping my business, just like many of you are. I could not afford to wait 60 days for an invoice to be paid when the client signed off on 15- or 30-day terms! My service providers didn’t give me that kind of flexibility and wanted to be paid. 

I had some situations where I had to make jokes, call associates to get them to call the client they referred to me (basically embarrass the client into paying), and do whatever I could to get paid BUT not damage the relationship.

These episodes actually left some emotional scars and now with my current coaching business, I get paid in full up front.

You can do good work for your client (and have a strong relationship with them) and still have trouble getting paid. As a matter of fact, if you get too close to the client, you may end up being the last person to get paid because they know that you will understand…

Here are some Do’s and Don’ts that can help:

  • Do make sure payment terms are written down and agreed upon in advance. (Note: Even if a client comes to you via a great referral, you must do this. Trust me.)
  • Do try to get some payment in advance (half or at least 25%) to prove that the client will pay and to tide you over until final delivery and signoff.
  • Don’t fall into the trap of feeling that the client is a friend, and thus, get uncomfortable asking for payment. You are not doing this for your health and your client isn’t either.
  • Do not invest more hours in a project if it is out of scope and hope that you will be able to bill for it later. (This rarely works out well and you can walk away feeling used and bitter, even though it is your own fault.)
  • Do immediately reach out to the client and negotiate additional payment for anything that is out of the original scope. This is the holy grail of project management and you must learn how to do it quickly and gracefully.

And do try to negotiate some type of retainer, when appropriate, as it will even out your cash flow.

If you follow these simple suggestions, you will have an easier time, although there may still be some troublesome clients. That’s just part of doing business. But, remember that you are their consultant, not their lender, and it is neither your responsibility nor obligation to help them with their cash flow. You have your own to worry about!

Do you have some tips for getting paid or some billing horror stories to share? We’d love to hear about them in the comments below.