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Client Payment Themes for New Contracting Businesses

While there are also a number of details to focus on as you start a contracting business, contractors in this position will also be focused on some of the simplest areas of basic operations. One of these that may seem overly simplistic, but is very important and worth paying attention to: Ensuring you’ll be paid properly and on-time by all your clients you begin working for.

At Contractors School, we’re happy to help Utah contractors with a number of themes as they start their contracting business, from business setup (themes like CPA consultation, articles of incorporation and more) through DOPL application and numerous other areas. What are some tips we offer new startup contractors on how to ensure payment is never an issue for them with clients? Here are several basic themes.

Clear Expectations and Contracts

First and foremost, when you start a contracting business, it’s important to ensure that when you complete work for a client and they accept payment, they’re also agreeing to follow through with proper financial compensation.

For this reason, make sure from the beginning that all of your clients have clear expectations of the time frame in which the work will be completed (this is important for you to protect yourself legally as well, if the client ever disputes the work or tries to withhold payment), what type of work will be completed and how much it will cost.

These details should all be hashed out before any work is even started, so there are no surprises later on. This is best accomplished by having a contract that both parties sign before work begins. The contract should be clear and concise, laying out all the expectations in detail to avoid any confusion later down the road.

Send Invoices Promptly

Contractors themselves play a big role in getting paid on time and as expected by their clients. After all, if you don’t send an invoice in a timely manner, how can you expect to get paid?

Ideally, you should send invoices to your clients as soon as the work is completed (or, at the latest, within a day or two). This ensures that you’re getting paid on time and not having to rely on the client’s good will. (And while some clients may be fine with paying late, turning others into such is a surefire way to create difficulties down the road.)

Make it Easy and Painless for Clients to Pay

One of the most important things you can do is find a way to make it as easy and painless for your clients to pay you. This can be accomplished by setting up an automatic payment option, so there’s minimal effort involved on their end. If you take payment over the phone or via other methods, set up a billing system where the client can simply say “yes” or provide some other verbal confirmation of payment, so you don’t have to worry about any confusion or disputes later on.

Don’t Get Taken Advantage Of

While being flexible and accommodating to clients is important, it’s also crucial that you don’t let yourself get taken advantage of. If a client requests additional work or services outside of what was agreed upon in the contract, make sure to send them a new invoice for the additional charges. Don’t just do the work and hope they’ll pay you later on down the road – this is a surefire way to get taken advantage of and not get paid for your work.

For more on how to ensure all clients of your contracting business pay you promptly and properly after services are rendered, or to learn about any of our resources for contractors starting a business in Utah, speak to the team at Contractors School today.


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