When you own your own business, particularly if you are starting out part-time while keeping your full-time job, you may find there are not enough hours in the day to get everything done.  In the rush to build your network, order raw materials, provide quality service, train employees, and develop new products, it can be easy to forget one of the most important basic tenets of business:  people don’t pay bills they don’t receive.

That may sound obvious, but it’s not unheard of for small business owners to simply neglect to send a bill, particularly when services, rather than goods, are being sold.  When you don’t send a bill, it indicates to your clients that you don’t really care when or even whether they pay you.  It makes you look disorganized and indifferent, which will lead your client to wonder if you take a lackadaisical approach to other aspects of your business, as well. 

You may hesitate to send bills because you’re unsure of your abilities while you are starting out.  It may be that you’re not sure what to charge.  It may even be due to simple disorganization.  Whatever the cause, it is vital to your company’s very survival that you bill for each service you render and for every item you sell.

You deserve payment

Your customers and clients aren’t getting things from you as a favor.  They are conducting a business transaction, and as such, they expect to have to pay for it.  You may have isolated instances where you do a small favor for a friend at no fee, but if you consistently fail to bill for services, you will be seen as a patsy rather than as a serious business person.

The one universal truth in business is that any for-profit business is in business only for the purpose of making money.  You may have a lofty mission statement that talks about making the world a better place by providing some needed service or product, but underneath all of the rhetoric, the purpose of business is to make money.  If you don’t believe me, try running your business as a non-profit for awhile and see if you don’t change your mind.

If you accept the premise that you are in business to make money, it becomes rather obvious that you have to be paid in order to stay in business.  And the best way to be paid is to ask for payment. 

Many of us were raised in homes where we were told not to ask people for anything.  We were raised to be self-sufficient and certainly never to beg for money, so asking for payment may seem contrary to some of our most deeply-held beliefs.  You must convince yourself that whatever you are selling has worth, so that when you ask for payment, you are not begging.  Rather, you are reinforcing the value of the product or service by insisting that it be paid for.
 

Dealing with disorganization

If you’re not billing simply because you are out of time or because you are too disorganized to get it done, you need to address this problem right away.  Your business cannot survive if you fail to get paid.  The best way to deal with billing is to send a bill immediately upon the conclusion of every job.  Discipline yourself to sit down and figure out the invoice as soon as you come back to the office or shop after your work is done.  Once you begin putting off the task, you are likely to lose track of it as you become busier and busier.  Even if you remember later to send the bill, it may be inaccurate because you’ve forgotten exactly what you did for that particular customer.

Billing for goods at the time of sale is fairly straightforward and doesn’t usually cause much of an issue, but when a service is spread out over a period of time, you may also need a way to track partial payments, deposits, progress payments, and other accounts receivable issues.  There are plenty of software programs that can help you, or you can set up a simple program for free, either on a spreadsheet or in a notebook.  The essentials that you want to track are the customer name and contact information, the item(s) purchased, the date of the purchase (or when the work was completed), the agreed-upon price, and any payments that are due or have been made.