Noticing a rise in unpaid invoices lately, and I’m curious if my service packaging plays a role. Right now, I charge hourly, but I’m contemplating a different approach.
Considering new ways to bundle my services that could improve my cash flow situation. Has anyone else tried changing their packages to encourage better payment habits?
Instead of charging hourly, consider milestone payments. Divide the project into stages and get paid for each one. This way, you secure some payment upfront and keep cash flow positive. I began this approach years ago after encountering issues with large jobs. It’s a straightforward method to ensure you get paid and maintain a healthy cash flow.
Monthly retainers might solve this better than project based work.
Clients pay the same amount every month for a set number of hours or specific services. They get used to the regular payment and you get predictable income.
I switched to retainers for my regular clients and haven’t had a late payment since. Much easier than chasing invoices every few weeks.
Fixed price packages can totally change the payment game. When clients know exactly what they’re paying upfront, they’re more likely to just pay it.
Here’s what worked for me:
The psychology is different when someone buys a “Website Audit Package” for $800 versus getting a surprise $800 bill after you’ve logged those hours.
Packages also let you avoid the whole “this took longer than expected” conversation that leads to payment delays.
Payment upfront works better than hourly billing. People pay when they need the work done.
I always ask for half upfront before starting anything.