One of the best ways to do this is a combination of a flat late fee and an interest provision. Third, in order to encourage on-time payment, define the consequences for late payment. Choosing “calendar day” is easy to simply calculate by counting the days, including weekends and holidays. For example, what is a business day and who determines that definition? A good recent example would be days like Columbus Day, which is a federal holiday, but a day in which many private businesses are operating. No matter how many days you choose, I recommend you choose the phrase “calendar days” as opposed to the generic “days” or even “business days” in order to eliminate ambiguity. This provision will often be subject to negotiation to accommodate the accounts payable process of your client. This can be any reasonable amount of time after the date of the invoice, be it seven days, ten days, fifteen days or any other choice. Business Tip: When you invoicing date falls on a weekend or holiday, consider a phrase that you will invoice on the last business day prior to your normal invoicing date.ĭo you have questions about independent contractors, consultants or freelancers? Schedule a consultation with #MattTheLawyer or stop by his open office hours on Zoom. Whether you will bill on the first day of the month, the last day of the month or some other date, state the date in the first part of the Invoicing and Payment section.
However, no matter what you choose, invoicing should be on your terms.
#Best invoicing software for consul series#
If you have a series of deliverables that will be produced on a less than monthly schedule, I recommend billing with each deliverable. You should be invoicing no less frequently than monthly. Even in that event, you should strongly negotiate payment terms that will get you paid faster.įirst, as the consultant, contractor or freelancer, you should set the time of your invoicing. Business Tip: When dealing with clients that are larger organizations, you are going to have to deal with an accounts payable process and bureaucracy that is not designed to move quickly. Written together, these provisions will provide the path to be shown the money. Why not get paid on your terms, or at the very least an amalgamation of terms?Ī well-crafted Invoicing and Payment clause will contain four parts. Invoicing and billing should be negotiated, since you have done the work on their terms. But what if the work involves multiple work products delivered over the course of months or even a year? What should be the protocol if you require a partial payment to begin work (something I recommend)? Even worse, I have seen contracts for knowledge workers in which payment won’t arrive for as much as 60 days. Should a knowledge worker have to wait 30 days to get paid simply because the customer puts a Net 30 term in the contract? No one should have to wait sixty days for payment of an invoice or final payment on a project. The definition might be acceptable for knowledge professionals if the “item purchased” is a single report or an article written for a publication on a one-time contract.
#Best invoicing software for consul full#
The language used often contains the ambiguous term “Payment terms are net 30 days.” The definition of “Net 30” reads “A specific type of trade credit where the payment is due in full 30 days after the item is purchased.” The term Net 30 is particularly ambiguous if used in the proper context, which is often related to the purchase of physical items. So when knowledge businesses get contract drafts from their customers, the contract language does not comport with the purchase of services or knowledge based work product. Establishing a strong, easily understood Invoicing and Payment clause in your contracts makes it easier.Ĭontracts provided by clients, often larger organizations, have often modified an existing contract often used for the purchase of goods. When consultants, independent contractors, and freelancers provide their knowledge based services and the work is done the next step is to be shown the money. It may be a little crass, it may be a little greedy even, but unless you actually do run a charity, knowledge workers operating their own business actually expect to get paid.
This post will be about the one thing Rod Tidwell wanted Jerry Maguire to do, “Show Me the Money:” Invoicing and Payment.
This is the second in a series of five posts on the Five Essential Contract Terms for Consultants, Independent Contractors, and Freelancers.
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