5 Best Practices to Organizing your Business- So, you get paid—Faster.
“This post contains affiliate links. If you use these links to invest or buy something, we may earn a small commission. Thanks!”
In this blog, I am going to share my top 5 best practices for getting paid as a freelancer, social media manager, graphic designer- pretty much any service-based business; and I’m going to recommend the program I use that has helped me scale my marketing business to 6-figures in the past TWO YEARS using a CRM!
What is a CRM?
A CRM, or client retention management system, is a software application that helps businesses manage their interactions with current and potential customers. A CRM can track customer contact information, past purchases, and other important data points that help businesses keep tabs on customer loyalty and analyze buying patterns. Most CRMs also offer customer relationships management features such as email marketing tools, automated follow-up sequences, and surveys.
There are many reasons why your service-based business should use a CRM, but three of the most important reasons are an organization, strong client relationships, and getting paid faster online.
The organization is key for any business, and a CRM can help you keep your customer data all in one place. This will make it much easier to keep track of interactions with each client and past work you've done for them. Strong client relationships are essential for any business - a CRM can help you nurture these relationships by keeping all of your communications with clients organized and easily accessible. Finally, getting paid faster online is always a bonus! A CRM that integrates with your payment processing system can help automate the invoicing process and
Intro: Why it Matters
Getting paid as an independent business owner is one of the most vital parts of running a successful business. But we all know it’s not enough just to get paid. Getting paid in full, on time, and consistently are what really matters. And unfortunately, that’s easier said than done for many small business owners.
According to the Freelancers Union, “71% of freelancers struggle to collect payment for work at least once in the course of their career.” When you think about chasing after late payments, getting ghosted, or—worst of all—fighting disputes about whether you even deserve to be paid, it’s easy to see why getting paid gets complicated, fast!
Let’s get started with a quick breakdown of my 5 best practices:
Getting Organized in your business
Using Contracts to secure your client’s projects
Ask for your retainer upfront! YES- as you should!
Accepting payments online. Because, we’re running legitimate businesses here, right?!
And, lastly- sending those automatic payment reminders sis! Because we’re not missing any payments!
Okay, let’s dive into Step 1:
Get Organized with your Biz!
The first thing you should do to start organizing and scaling your business so you get paid on time might surprise you. No, it’s not a secret. But it is something that separates frazzled freelancers from those rocking their cash flow. When I started out as a freelancer, I had no clue how to organize my business processes. I was getting inquiries through email, DM’s texts.. in person. My communication with clients was all over the place, and my payments were coming from any possible platform that I could accept payments from. Nothing was organized, and I potentially lost out on business opportunities because my backend management wasn’t organized. Until about 4 years, ago when I started using a CRM for my business processes. Ever since then, my inquiries, emails, project workflows, and most importantly, my payments were automatically organized in one place! This made it so easy for me to begin working on, and executing my design projects on time, meet deadlines on time, and monitor when I see when I am supposed to get paid, how much, and by whom. Having a CRM to manage all of the working parts of my business allowed me to see my business processes in a clear-eyed view. As a business owner though, with having a clearer view of my finances, I was able to better understand how my business was performing and make better business decisions.
Features such as bookkeeping, financial reports, spending reports, and direct access to my Quickbooks are some of the TOP reasons I transitioned by business processes to a CRM platform. Here’s a quick example of how these features look all in one place.
Step # 2…
Use a Contract- Always!
When using a CRM, your project’s payment status is automatically updated in the system for you, so that you don’t need to dig through your emails and texts to figure out if you’ve been paid yet. Typically, you should be able to access your CRM program from anywhere, so, you can stay on top of your payments and feel good about your finances.
We all enter business agreements with the best of intentions, but awkward situations can arise when deliverables and billing change. Using a contract is critical in ensuring you and your client understand exactly what you’re delivering and what to expect.
Protect your business (and bank account) from the risk of not getting paid with a contract. It’s so easy to have your contracts, terms, conditions, policies, etc set up in your CRM, and if you don’t have one yet, the CRM program I use provides legally written contract templates for you when you join. These contracts can be sent through your CRM for electronic signature and should be signed by your client (and yourself) before any work begins.
Not only does having a contract help protect you if you need to seek legal help or escalate to small claims court, but it also sets expectations on the work you’re doing, the deliverables you’re providing, when you’re delivering them, and for how much. Getting this alignment from your client at the outset increases your chances of delivering work to a happy client who will pay you.
Step # 3…Let’s talk about getting paid- and HOW?
Ask for a Retainer up-front
Collecting money upfront in the form of a non-refundable deposit before you start any work is the gold standard for how to get paid as a freelancer. How much of a deposit? It depends. A good rule of thumb is to require 33% of the project total for larger projects and 50% for smaller projects. Now, if asking for money makes you feel squeamish, first, stop and remember the invaluable skill set you’re bringing to the table. And second, don’t ask. Telling your clients your process makes you look professional and it sets the expectation that your work will begin once the invoice is paid. The beauty of using a tool like a CRM is that you can customize the breakdown of your payments based on how you like to bill your clients.
Set installments based on dates.
Set installments based on project milestones.
Set monthly retainers with recurring payments.
For engagements where you’re billing hourly, you can track your hours spent on a project and send an invoice. I recommend sending your hourly invoice every 2 weeks until the end of the project. No matter how you charge, it is important to be confident with your clients and collect a deposit upfront. By setting these expectations, your clients have buy-in on their project with you and will work within the parameters you’ve set for your work with them.
Accept Payments Online
The best way to get paid is fast—for both you and your client. You, of course, want to get paid on time and your client wants the payment process to be as painless as possible.
Most CRM’s have a processor already integrated into their platform so all you have to do is add your bank details in order to receive payment!
We talked about the importance of contracts and accepting deposits, and CRMs make it so easy for clients to both sign your contract and make their payment in one place!
So it’s time I spilled the beans on the CRM that I use to accept payments online and streamline my business.
HoneyBook has been so helpful for my business, and I know it will help you as well.
Here’s how it works (all within HoneyBook!):
Send an online proposal to your client
The client can sign your contract electronically
Then submit payment via credit card or bank transfer
Cha-ching! You get paid. It’s really that easy!
HoneyBook specifically has all the same invoicing and payment capabilities as software like QuickBooks, but because HoneyBook is more than accounting software, it has even more perks. You can manage all client communications in one place, automate repetitive tasks, and get paid —all while keeping it personal and on-brand. (No separate invoicing tool needed!).
A quick note on fees—All online payment processors take fees in order to cover the risk of processing a payment. The industry standard is right around 3%, which according to many experienced business owners, any normal business would jump at the chance to have such little transaction overhead. (Some say they charge way less in fees but this is often for in-person card swipes.)
HoneyBook charges the following rates per transaction:
ACH bank transfer – 1.5%
Card – 3%
Step # 5…Securing the Bag Sis!
Sending Automatic Payment Reminders
One of the most awkward conversations I would have was when I’d need to remind my clients about payment.
Luckily, HoneyBook makes payments easier for my clients (and less awkward for me!)
Even the best clients may need a nudge to pay on time. Because I’ve set up my client’s payment schedule in advance, HoneyBook will automatically send a payment reminder when a payment is coming up.
This saves me time as I’m not chasing after payments and don’t have to worry about annoying clients with constant reminders (just blame your software if you get any funny comments!)
And they allow clients to pay from any device, wherever they are.
I know what you’re thinking, doesn’t that feel impersonal? Well, you can customize the email template for payment reminders. HoneyBook pre-sets the logistics, but you can add your personal touch.
Want to take it a step further? You can also set payments to automatically charge on their due dates! No reminders are needed!
