Should I Charge Now or Later?

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If you do onsite work for your clients you have two choices when it comes time to settle the tab: collect money on the spot or send them an invoice.

When I first started doing in-home consulting work, I would ask for money as soon as I was completed with my work.  I did this because I didn’t have any other mechanism in place to receive money from client.  Recently, however, I’ve had customers start asking me to invoice them.  This forced my to look into how invoicing works and if it’s a viable option for me going forward.

As I have done in the past, I always like to weigh the pros and cons of two choices to best decide which is right for me.

Charge Now

It’s tempting to want to get paid right after you’re done performing your service.  After all, you did the job you said you would do, therefore the customer should compensate you.  As we’ll see, this isn’t the best solution in all situations.

Pros

• Ensures your customer pays on time.
• Quickly addresses any issues with the amount you charged.
• More convenient for you

Cons

• If the price is higher than expected, the customer may not have the money on-hand to pay.
• You need to make sure you can accept credit cards on the spot.
• It can be awkward asking for money in-person.
• You may end up carrying around lots of cash that can easily get lost or misplaced.

Charge Later

This is the norm if you’re working with businesses, but even when your client is an individual you still may want to invoice them later.

Pros

• No awkward moments waiting for the client to write you a check or sigh and dig through their purse.
• Depending on how you invoice, your customer can choose to pay however they want (echeck, credit card, paper check, etc.).
• If they can’t afford the service, you can offer to invoice them later so they have time to come up with the money, or offer to put them on some kind of payment plan.
• More convenient for your customer.
• More professional when working with businesses.
• Best for services like web design, remote support, or subscription plans.

Cons

• You’ll need to come up with an invoicing system.
• Checks can get lost in the mail.
• It’s easier for customers to pay late or not at all.
• Can be a pain to keep following up with non-paying customers.

While it may seem much easier at first to simply collect money from your customer at the time of service, sometimes that’s not the best route to take.  Personally, I think its best to ask for payment on the spot by default.  That way you can make sure you get paid and the customer can address any issues with the pricing if they think something is amiss.  To do this effectively, you’ll want to make it as easy as possible for them by ensuring that you can accept credit cards in addition to checks or cash.

To provide the best customer service, however, you’ll want to have the ability to invoice customers later if that’s what they prefer.  In order to do so you should have a professional invoicing service set-up to take as much headache out of the process as possible.

In my next post I’ll be discussing two services that have helped me immensely in this regard. One provides a convenient and affordable solution for accepting credit cards on-site.  The other provides painless invoicing.  Together they’ll help you make sure you’re equipped to get paid whether its now or later.

How do you prefer to be paid?  Let me know in the comments!