Ultimate Guide To Collecting Payments For Your SMMA
It’s important to know how to set up recurring SMMA payments for a new owner. Collecting payments can be a major pain if you’re not doing it right. Luckily, there are plenty of tools available online to help make bookkeeping so much easier.
I know this topic isn’t super exciting, but it’s one of the keys to keeping your SMMA running smoothly. You need to know things like how to send SMMA invoices to make your business work. If you can’t get money inefficiently, you can’t keep your business going.
If you’re new to the SMMA game, you might not be aware of how difficult it can be to chase down clients and keep everything straight. Until you can hire an accountant (and possibly a legal team) payment is a major hold up for most businesses. If you want to avoid this or break through these issues in your current business, this is the article for you.
Getting clients to pay on time takes a little of work, but it’s definitely doable. One of the keys is just making sure that you feel comfortable requesting money. You need to be able to clearly and professionally request payment in a timely manner, and communicate what your expectations for that payment are.
Beyond that, there are some tools that can help to make things clear. With your best clients, these tools and a little consistency will be all you need. As long as everyone understands what’s going on and what needs to happen when collecting payments for your SMMA doesn’t need to be too difficult. Here’s what you need to make payment collection simple.
How to Make Collecting Payments for Your SMMA Easier
There are two major components you need to think about when learning how to set up recurring SMMA payments: expectations and terms. You need to be setting up clear and concise expectations for payment and what that payment will be. And on the other side, you need to have clear terms laid out for when those payments will be made.
The first thing you need to do is have a contract. It’s the key to making sure there aren’t issues when collecting payments. Some people forego contracts as they think it’ll drive clients away – but the clients who get upset about a contract are usually the people that you’re going to have an issue with when the bill comes due.
In the contract, you need to lay out clear terms for payment. The contract should say when you expect to be paid, and on what schedule if you’re setting up recurring payments. A client contract should also include clear guidelines for what actions you will take if there is a dispute or an issue with payment. Consult a lawyer about this, and they’ll be able to cover everything in a very simple contract.
You should also – both in the contract and while negotiating – provide the client with a very clear estimate. Breakdown all the numbers that you’re adding up in your invoice to make it clear why your price is what it is, and do your best to provide an accurate idea of what they’ll be paying. By avoiding any surprises, you have a better chance of keeping things frictionless between you and the client.
Breaking down the cost can also be extremely helpful because it helps the client understand what they’re paying for. Obviously, someone expecting to pay $100 is going to be upset when they get a bill for $1000, but it’s often worse when a person doesn’t understand why the price is that high. If you have to contract out a lot of tasks, you need to make it clear how many people you’re hiring for this job.
Another good way to prevent any issues is to ask for a deposit when you’re starting work with a new client. Many people ask for a 50% deposit of the first invoice before getting to work, as it shows trust between themselves and the client. This would also make it easier on you financially if there is an issue with payment after the work has been done.
How to Send SMMA Invoices and Set Them Up
Learning how to send SMMA invoices is usually as simple as learning how to use new software. Personally, I recommend using Intuit Quickbooks but there are plenty of processing software that I’ll talk about below. Invoicing online is essentially the only sensible option because everything else is outdated.
Whatever invoicing tool you decide on should help you set up invoices in a way that will make bookkeeping easy, and keep things organized. It’s important that you’re able to quickly go over all the money you’ve made in a certain amount of time, or determine which invoices are yet to be paid. If whatever you’re using isn’t making bookkeeping easy, use something else.
Each invoice will need certain fields to work with that organization. Your invoices should include the name of your project and company, as well as the name of the company that you’re invoicing. The invoice should include a description and breakdown of the work, and the amount of time that went into any hourly payments.
Of course, your invoice should also include the total payment and a date for which you expect payment. Most invoices online will be paid on receipt, though many industries prefer a Net 30 where the client has 30 days to pay. In this case, you should include the date of the invoice as well as the date that the invoice is due.
Make sure to also include contact information to ensure that this is stored for anyone who might need it come tax time. In addition to this, there are a few best practices considering when invoicing on your side. You should be keeping track of exchange rates, processing fees, and taxes that need to be taken out. When dealing with international clients, make sure to research any international laws or regulations you need to worry about.
The Best Way to Set Up SMMA Invoices
There are two main types of invoice to consider when learning how to send SMMA invoices. The first is the one that feels most natural to people: hours worked invoicing. This is the type of invoicing that you would do at your 9-5 job, where you simply charge for the amount of time that you worked multiplied by your hourly rate. While this is a natural and useful to do it, it’s not the way I would recommend doing it.
Instead, I would recommend that you invoice based on a retainer. Here’s why:
- Retainers can be automated to go out at the same time every month or week, for the same amount. This gets rid of the possibility of scheduling errors.
- It’s less work on both your and the client’s end, as no one has to worry about time tracking.
- You will usually do less work than the retainer covers, although you’ll sometimes end up doing more.
- Retainers help you get accurate projections of how much money your SMMA will be making.
- They’ll also help you project when you can or need to hire new people.
- Clients will know the exact price, and can easily budget for your services.
If you want to make collecting payments for your SMMA easy, then retainers are the way to go. Flat rates are easier for everyone, and you should also try to find your contractors on them. The less math needs to be done, the more you can get by clicking just a few buttons.
Best Invoicing & Payment Processing Software For Marketing Agencies
As I mentioned before, the best invoicing software for SMMAs, in my opinion, is Intuit Quickbooks. Quickbooks makes it incredibly easy to build an invoice and automatically send it and follows that up by automating the overwhelming majority of your bookkeeping. If you can’t afford an accountant yet, you can’t afford to not have Quickbooks.
Invoicing is pretty simple, so I see these bookkeeping aspects as very important. You want your software to make it clear for everyone what’s going on and what needs to be logged.
For payment processing, there are a lot of the available options but a few obvious ones. I tend to recommend against Venmo, as the social networking aspect can quickly destroy any sort of professionalism. PayPal is the default for many people, and it serves that role well.
PayPal is fast and generally accepted, which is pretty much all you need. In addition, you can also invoice directly through PayPal if you aren’t overly concerned with convenience during tax time. TransferWise is another good payment processing option for working with international clients, as it makes the exchange much simpler and less costly.
Those are the basics of how to collect payments for your SMMA. Knowing how to set up invoices for your SMMA is probably the most important thing, as most clients will comply if you remove any friction and confusion. Remember to be as clear as possible about what’s expected from everyone, and you should be okay.