Freelancers: Net 7 vs Net 30 - Which Payment Terms Are Best for Your Business?
Learn the pros and cons of net 7 and net 30 payment terms and how to choose the right one for your freelance business.
You spent hours crafting a proposal, and a client finally agrees to work with you. You send an invoice, but then you wait for 14 days only to receive 90% of the payment. You're out $150 for 2 weeks of your time. This is a common scenario for freelancers, but it doesn't have to be. In this post, we'll explore the pros and cons of net 7 and net 30 payment terms and provide you with practical tips to get paid faster.
Why this keeps happening
The main reason freelancers struggle with delayed payments is that they often don't have a clear payment schedule in place. Without a clear net payment term, clients may take advantage of you, and you may end up waiting too long for payment. Additionally, freelancers often don't have a system in place to track payments and send reminders to clients, leading to further delays.
Real example
Sarah, a freelance writer, recently landed a contract with a new client. She sent an invoice with a payment term of net 30, but the client took 7 weeks to pay, leaving Sarah with a cash flow problem. This experience made Sarah realize that she needed to revisit her payment terms and find a more efficient way to get paid.
The habits that fix this permanently
These are the non-negotiables for getting paid reliably in your profession:
How to implement this step by step
Determine Your Payment Terms
When setting your payment terms, consider your business needs, industry standards, and client expectations. Net 7 and net 30 are common payment terms, but you can choose a term that works best for you. For example, if you have a high-demand business, you may want to consider a net 14 payment term to ensure timely payments. On the other hand, if you have a low-demand business, a net 30 payment term may be more suitable.
Create a Payment Schedule
Once you've determined your payment terms, create a payment schedule that outlines the payment due dates and amounts. This will help you stay organized and ensure timely payments. For example, if you have a contract that requires a 50% deposit, 25% at the midpoint, and the remaining 25% upon completion, create a payment schedule that reflects these dates and amounts.
Track Payments and Send Reminders
Use a tool, such as Becflow, to track payments and send reminders to clients. This will help you stay on top of payments and avoid late fees. For example, if a client is overdue on a payment, send a reminder with a clear due date and payment amount. If the client still doesn't pay, consider sending a second reminder or taking further action.
Offer Discounts for Early Payment
Encourage clients to pay early by offering discounts. This can be a win-win for both parties, as the client gets a discount, and you get paid faster. For example, offer a 5% discount for payments made within 7 days or a 10% discount for payments made within 14 days.
Use a Payment Gateway
Use a payment gateway, such as Becflow, that allows clients to pay online and securely. This will make it easier for clients to pay and reduce the risk of delays. For example, if you have a client who consistently pays late, consider offering a payment link that allows them to pay securely online.
The Becflow solution
Becflow offers a range of features to help freelancers get paid faster, including AI-powered contracts, payment links, and automatic reminders. With Becflow, you can set clear payment terms, track payments, and send reminders to clients, reducing the risk of late payments. Try Becflow today and take control of your cash flow.
Get paid faster, automatically
AI contracts, invoices with payment links, and automatic reminders. All in one place. Free for 7 days.
Start free trial