Billing Policies for a SOHO or Single-Person Business - dummies

Billing Policies for a SOHO or Single-Person Business

By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck

When you’re in business for yourself, you typically send out a bill and then wait — 30 to 60 days isn’t uncommon — for your clients to hold up their end of the bargain and actually pay you. Most do. But sometimes things go wrong, and a company may be slow to pay. Worse yet, they may be unable or unwilling to pay, so you have no surefire way to avoid trouble.

But the following tips may help:

  • Discuss costs before you perform the work. Put your cost estimate in writing and present it and answer any client questions about the costs involved. Discussing fees can be uncomfortable, but it’s way, way better to discuss them upfront rather than after the fact.

  • Get signatures on your cost estimate or contract. Doing so helps you later if you have trouble collecting what you’re owed.

  • Establish and explain billing policies. Also include how you bill for work outside the scope of service covered by your estimate or contract and how you charge for client-requested changes.

  • Put your billing and payment policies in writing, even if they just appear as fine print on the back of your estimate or contract. By presenting them as established policies, clients are less apt to feel singled out when extra charges apply.

  • Avoid billing surprises that don’t show up until the client opens the bill. Get additional costs approved, in writing, along the way.

  • Send bills out on time. The more promptly you bill, the more quickly you get paid.