Where’s My Money? Five Sneaky Ways to Get Paid After an Event
Doing a wonderful job on an event is great. Getting paid is even better. But sometimes getting paid on time is tough. Here are the top five sneaky ways to get paid and keep your client relationship strong.
That sense of personal satisfaction you feel at the end of a successful event is rewarding, but you can’t pay the bills with it. That’s why the last step you should implement in every event is your own “get paid now” strategy.
Why It Pays to be Paid Quickly
If you’re like most planners, your best friends are your credit cards. They’re an easy and convenient way to pay for events and track costs. I work with one production company that manages a series of large events every year. They literally charge the events on American Express. Can you imagine the cash-back points you could earn on a seven-figure conference?
The problem is that the interest on a credit card balance can quickly eat up your profit margin. If you are carrying expenses for 90 days after the event ends, you are actually lending money to your clients!
– 90 days – A $20,000 balance at 15% interest costs you $500.
– 90 days – A $50,000 balance at 15% interest costs you $1,255.
Wouldn’t you rather have your money in the bank, drawing interest and building profit?
The Time to Think About Being Paid is BEFORE You Do the Job
There’s always a big rush to respond to an event RFP or project offer. But slow down and be as professional and objective as your clients are about the financial side of the business. Here are the biggest things you should do – right up front – to make sure you get paid promptly.
Check out the prospective client in advance.
Contact one of the credit reporting companies and pay for a report. According to Experian, about 70% of businesses don’t check out the credit of a company or client before accepting a project or contract. A simple report usually costs less than $20. If the project is over $5,000, the odds are the client has checked your company out. Return the favor.
Talk about money early.
Ask about the company’s payment policies before you accept the job. How should you submit invoices? What is the payment cycle? You can and should negotiate how quickly you get paid, right up front.
Have a solid contract or work agreement.
Put everything in your contract or work agreement. Please don’t use a generic contract, and don’t even attempt to play lawyer and write your own. Invest in an attorney and make the contract or agreement as simple and informal as possible. You want the client to sign it immediately and not send it to the corporate legal department for a couple of weeks.
Sneaky Tip #1
Ask, “What’s the easiest way for you to pay me?”
This is a fantastic way to open a comfortable financial discussion. You are suddenly making things more efficient for the client and putting her/his convenience first. But, in reality, the client is becoming your advocate.
Sneaky Tip #2
Offer a discount for 100% payment up front. This really works. Offer a 2% discount for 100% payment up front. To decide if this is a good idea for your next event, answer three questions.
1. How long will it take to complete the event?
2. What out-of-pocket costs and expenses will I have to carry?
3. Based on my cash reserves and credit, how long can I carry the costs?
In many cases, even with a discount, you’ll come out ahead.
Sneaky Tip #3
Offer to send several smaller invoices instead of one large one. This comes out of your money conversation. Many clients can personally approve invoices under a certain amount. One of my regular clients can handle anything under $5,000 without going through Purchasing. So I send smaller invoices as we go along. Unless the entire job takes just a few days, ask about incremental invoices.
How to Make Sure You Get Paid on Time After the Project Ends
I have found that this is the Number One reason people don’t get paid on time. According to FreeAgent, just one week’s delay in sending an invoice doubles the time you wait for payment. Yet, more than 50% of companies and contractors wait a month or more before they send an invoice. How long do you want to wait?
Prepare the invoice in advance and send it 90 minutes after the job is over. I’ve never known a client who was insulted by being invoiced too quickly.
Send smart invoices.
Don’t assume that simply putting “Net 30 Days” on your invoice is automatically binding. The work agreement or contract trumps the invoice every time. Make sure the invoice reflects your agreement and the terms you discussed with the client before the event began.
Be professional and polite.
FreshBooks found that businesses that are polite on the invoice are paid about 5% faster. “Please” and “thank you” work!
Sneaky Tip #4
Make the person who pays the bills your friend. Usually there are associates or assistants who take over the process. They are the gatekeepers to Accounts Payable. Be sure to introduce yourself and become a person – not an invoice. They will tell you the inside story on how the system works.
Sneaky Tip #5
Don’t use “Net 30 Days” – Use “27 Days to Pay”. You’ll be amazed how well this works. Why? Because 27 is an odd number. Suddenly, there is a specific deadline. It seems to start the clock ticking in the client’s mind and may actually move your invoice closer to the front of the line. I hate to say it, but many organizations see “Net 30” and think “I’ll worry about this later.”
Okay, what if the invoice hasn’t been paid according to the agreement? Where’s your money?!!? Before you do anything crazy, take a moment to decide if you want to preserve the relationship. What is this client worth in the long term? Keep that in mind as you try to collect.
1. Be personal and not antagonistic. First, forget nagging emails and just pick up the telephone and call the client. Remind her/him of the event and how well you worked together. Then ask if there is any reason the payment is delayed. You want to have a sense of authority but still be respectful.
2. Be persistent. Statistics show that the longer an invoice is unpaid, the greater the chance you won’t be able to collect. The goal is to agree on exactly when you will receive the check. Stay calm and don’t make threats you can’t deliver. The moment you threaten legal action, the issue goes to their lawyers – and they usually have a bunch of them. It’s simpler to just make it easier to pay you.
Getting Paid is Smart Business
It doesn’t matter if you are creating a small reception or a giant corporate event – the name of the game is cash flow. Your employees and suppliers expect to be paid on time, and so should you. Don’t feel you should apologize for being professional.
The trick to getting invoices paid and keeping the relationship is planning ahead and focusing on clear communication. Hey, you’re an event planner – that’s what you do! Talk about payment before the project begins.
Ask for as much of the payment up front as possible. Then invoice immediately once the event is over. Use these tips to make the client your advocate in the relationship and put him or her at ease. Your big payoff will be to get paid on time – AND get the next job.
DISCLAIMER: I am not an attorney. This article is based on my decades of experience in the event business. It isn’t legal advice. When needed, contact a lawyer to advise you on your specific business practices.
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