It’s been a busy few months for our business, and I’ve fallen behind on monthly billing. Great picture, I know better. But sadly, I now have two projects that I’m about to send out massive invoices for to get caught up – and I’m very nervous about that. How do I get out of this hole I dug and how do I present these invoices in a way that creates the least amount of friction or resistance with my clients? Are there ways to handle the late billing without looking unprofessional or presenting payment options since I understand the pileup was my fault?
Also, while we’re on the subject of bills, any practical improvements I can make so I never end up in that kind of jam again?
Dear shy biller,
Let’s start with the obvious: value mismatches always present problems, especially when all or part of the billing is for design. The lifespan of an idea is microscopic before it becomes obvious, which means that design that was impressive when you first showed it becomes more accepted the more someone looks at it. If you charge for the design long after it’s delivered, it becomes increasingly difficult for customers to remember the value you provided. Was the 30 hours you charged to come up with the salon design really worth it when you’re being asked to pay for it three, four or even six months later? Probably not.
So what to do? In this case, nothing. Submit the invoice, expect to be paid, and move on. Ironically, the more of a problem you make of it, the more you infantilize everyone. Your customers can read, they have signed your contract and know what they are responsible for. No one is claiming (yet) that you have the right to get paid what’s due, and you’re disrespecting everyone if you allow the idea that money isn’t earned until you don’t. not charge to permeate the conversation.
If you make a thing out of it, especially if you offer a payment plan, you’re doubling down on your mistaken idea that somehow the money wasn’t earned unless billed. Due maybe; won, never. No contract in the world will excuse late billing. If your customers were going to have a problem with receiving a large overdue invoice from you, why is it more your responsibility than theirs to let you know? Nothing has stopped them from making a good faith payment every month that they ultimately expect you to reconcile when you can. If you’re a small business, what would they want you to do: focus on billing or on getting their project done?
Now please don’t get me wrong. Overbilling is a huge red flag that your home isn’t in order. Your design business needs money just like any business to exist, and if it’s not properly “funded,” real questions arise as to why. Maybe you earn more than you should, or maybe the business is a hobby and you don’t need the money to operate. The worst is if you’re in chaos and you don’t follow through. Whatever the reason, delayed billing erodes trust and is inexcusable in today’s digital world. If you want more, you definitely need to be consistent in your billing.
Here’s the problem: the problem isn’t really sending out one big bill, but rather the inconsistency with expectations. If until now you were billing monthly but have moved to quarterly, this is the problem, and also the solution to your problem. Maybe you can only afford (financially or physically) to pay your bills every two months. That’s right—do this. In many parts of the world (and for most teachers in the United States), employees are paid monthly and must figure out how to budget with one monthly paycheck. It’s certainly easier for businesses to run payroll only once a month, just as it might be for your business to bill less frequently. Once expectations are set, everyone can adapt. Your design business is no different.
Either way, make billing your number one priority when it comes to managing your customers. Set the expectations that work best for you and your design business, then live by them. And regarding your current situation, give yourself the one get out of jail card we all deserve, but know that you don’t get another.
Homepage photo: ©Franny-Anne/Adobe Stock
Sean Low is the go-to business coach for interior designers. His clients have included Nate Berkus, Sawyer Berson, Vicente Wolf, Barry Dixon, Kevin Isbell and McGrath II. Low earned his law degree from the University of Pennsylvania, and as founding president of The Business of Being Creative, he has long consulted for design firms. In his Business Advice column for BOH, he answers designers’ most pressing questions. Do you have a dilemma? Email us and don’t worry, we can keep your details anonymous.