Do you invoice immediately? Or do all your invoicing at month end? And how much does your timing impact whether–and how quickly–you get paid?
As a new freelancer, Walt Kania once submitted his invoice and work to a client at the same time. He then received a response that when paraphrased said: “You look like an amateur. Don’t be an amateur, be a pro and wait a while before invoicing.”
And so, for a long time, that’s what he did. He would submit his work and wait a while before invoicing. In his words: “Like a dope, I would wait a week or ten days after the assignment was done.”
If you’re a designer, copywriter or any other small service-based business owner, chances are that you – like Walt – have waited before sending an invoice to a client. I know I have.
But is this actually the right thing to do? Are there not better times to send your invoices such as before you start the work? And, what about sending invoices on specific days in the week?
The simple answer to these questions is it depends. It depends on a host of factors. Let’s explore these factors and different scenarios for sending invoices to help you determine when exactly YOU should send yours.
1. Should You Submit Invoices Before Starting the Work?
I sometimes submit an invoice before I do the work because I want an upfront deposit. Upfront deposits offer several benefits:
I’m sure you’ll agree, there’s nothing worse than completing a project, only to have to wait for payment. Deposits help you weed out clients who don’t pay and increase the odds of getting full payment.
What’s more likely? Someone paying you in full after they’ve paid you a deposit or someone paying you in full after they shrugged your deposit off?
Better Client Involvement
When I work with clients, I often depend on their input, feedback and guidance. If I have a reasonable question, I want to be able to reach out to them and get a response. This ensures the success of my writing projects.
Such help from clients is more likely if they’ve already invested money in the project through a deposit. Why? Because they’re vested in it and want to get value for their money.
Improved Cash Flow
Ever run out of cash halfway through a project? Ever had to find extra money because you have to subcontract? Deposits provide you with needed cash flow and prevent having to scramble to find some.
Although sending an invoice that requests an upfront deposit before you start work is suitable, it isn’t always the best solution. For example, if you’ve built a healthy relationship with a client who pays you on time, then you can come to an agreement and send invoices monthly, weekly, or even when you submit the work. Speaking of which…
2. Should You Send the Invoice as You Complete the Work?
I often send invoices right after I’ve completed the work. I do this because most of my writing projects involve fast turnaround times (and don’t put a strain on cash flow) and I’ve built a relationship with my clients and know they’ll pay swiftly.
Sending invoices when you submit the work ensures it’s fresh in your clients’ minds and that they’re less likely to chuck it under a pile of work.
It also reinforces that there’s always a fee attached to your work (I don’t work for free unless there are unique circumstances).
And, finally, it’s your right to get paid for delivering a service, isn’t it?
However, one of the downsides of this approach is that you’re invoicing before the client has agreed that the work is complete. If the client comes back with several revisions and additions, they’ll feel you’ve invoiced for an incomplete job and become frustrated.
3. Should You Wait to Send Invoices?
If you wait to send your invoices, you likely feel it’s the right thing to do. It’s courteous and doesn’t make you look like a money hungry tyrant.
It may be that you genuinely feel this way, or it may be that you’ve been burned by a client in the past – like Walt was – and now you’re scared to deal with a potential awkward money conversation in the future.
I get it, I do. When I started my writing business, I once waited a week before sending an invoice. The thing is I wasn’t doing myself any favors: cash flow quickly became a problem, and I was always worrying about money.
The funny thing was: all I had to do was invoice to get paid. It’s such a simple thing, yet many of us struggle with it because we have this preconceived idea of how we should act. Or, we’re fearful of what the client may say.
If you’re fearful, it’s time to start tackling that fear by investing in tools that will make money talk more manageable.
Of course, sometimes waiting is the right option because this is the agreement you have with the client. Think of those monthly retainers or subscription clients.
You may also decide to wait because you manage invoices on a routine. For example, maybe you invoice on the last of each month – giving the clients 30 days to pay – so that you have control over a steady “paycheck.”
What Day of the Week Should You Send an Invoice?
There’s much research on the best day of the week to send invoices:
- Dejan Jacimovic used an empirical approach and discovered that Tuesday was the best day. It outperformed every other day; If he sent invoices on Tuesday, he was paid that week.
- Gravity Credit Control suggests sending invoices early Monday morning and found that shifting from monthly to weekly invoicing increased their cash flow.
- Cash flow and forecasting blog Vistr analyzed 300,000 invoices of companies who invoice fortnightly (or weekly) and monthly. Their findings?
Companies invoicing weekly or fortnightly – that sent invoices on weekends – got paid ten days faster compared to when they sent invoices on Tuesday, Thursday and Friday.
And, companies invoicing monthly – that sent invoices on the first of the month – were paid in 30 days. This is compared to 38 and 37 for sending invoices on the 30th and the 31st of the month, respectively.
There are clearly different views on when to invoice. This begs the questions: If everyone has different days, who’s right? The answer: they all are.
“But Nick, how can they all be right?”
You see, the best day to invoice will depend on your business, industry, clients and workflow. For example, your clients will have unique billing cycles; they pay invoices on a specific have day of the week. Target those days, and you’ll likely get paid faster. Wait, a few days, and you’ll probably get paid in the following pay-run.
Companies also have different payment policies. Some large companies, for example, have set policies and procedures; that’s just the way they work. I recently encountered a company like this that pays via check, 30 days from receipt of invoice.
Now, I’m in talks to amend that because I find that too long. If I’m unable to change these terms but choose to work for them, at least I can plan for it because I’m aware of it.
Invoicing is the final and, arguably the most critical part of getting paid. Whether you’re doing this as a hobby or a business, invoice timing should still be top of mind. It’s no surprise that Walt no longer waits weeks to invoice anymore. That’s not to say that this is always the right thing to do.
In fact, there isn’t a one-size-fits-all-strategy and when you invoice will depend entirely up to you and comes from understanding your business and each situation.
New clients may require invoicing before you start work and loyal clients may be on monthly retainers. You may even decide to invoice as you complete the work to reinforce that nothing is for free.
And as for the best day of the week to invoice? Well, experiment and see what works for you.
When do you usually send your invoices?