Covid-19: How to manage invoices when everything is uncertain
Every freelancer, small business owner, and self-employed person in the UK is feeling very strange at the moment. Coronavirus has forced many to shut down - or cut down their usual workload - which has a major effect on their income, new opportunities, and anything they might have planned for 2020.
The next few months are going to be tough for every kind of British business, big and small. This is how to manage all your ongoing and outstanding invoices when you don’t know what’s coming next.
Check all invoices that haven’t been paid yet
You need to know what’s outstanding, what’s due, and when it’s likely to be paid. If you’re using an invoicing tool like Solna, or an accounting tool like Quickbooks, this will be a quick job - you can see all your invoices at a glance.
Now you know what cash is due to your business and can plan for the best case scenario - they all get paid - and the worst - most of them don’t. It’s much better to be prepared for unstable cash flow than expect cash to come in and get a nasty shock.
Find out which of your clients are ‘business as usual’
Most freelancers and businesses are stretched and guarding their cash carefully. You’re probably already talking things through with your regular clients and anyone you have a particularly close working relationship with. It’s worth checking in with all your clients and finding out how Covid-19 is affecting them. They could have shut down without telling you...
When you know where you stand you can keep invoicing for ongoing work, chase the clients that need chasing, and comfortably wait for the invoices that are coming your way.
Reduce your losses ASAP
If any of your clients are closing down, or putting their suppliers on pause, this will affect any ongoing work you had planned with them. Some will give you a heads up, but some won’t.
Don’t continue to provide ongoing services when there’s any uncertainty or more than one unpaid invoice next to a client’s name. This is a very strange and uncertain time for small businesses. No one knows what will happen next and even your most loyal clients could find themselves in a position where they can’t pay.
Protect your time and resources. If clients are unreliable or you can’t get hold of them, tell them you’re pausing the work until payments are up to date.
Ask for deposits
Deposits are always good practice for large projects that require some upfront investment, or brand new clients you haven’t worked with before.
Obviously, this requires a bit of trust between you and your clients. They don’t know if you’re still going to be in business next month just like you’re not sure what their longevity is. To protect yourself and reassure your clients, you could use a third-party service like Escrow. This will hold your deposit and protect the funds while you get started on the work. It will be released to you when both parties get what they want.
Make payment as easy as possible
We’ve all got a lot on our minds. We’re working from home, balancing childcare, and fretting about how long the queue for Sainsbury’s will take. Help your clients out and make payment straightforward. You’re much more likely to get invoices sorted quickly.
Solna is FREE and makes invoicing a breeze. Your clients can pay directly from the invoice and you can get paid 3x faster on average.