Get Paid by Using a Statement of Work
The statement of work’s importance in terms of both the sale and delivery of independent executives’ work for clients is paramount
How much or how little you put into yours is up to you and will depend on the situation and the client. For details on creating a statement of work and what to include, refer to our book, How I Fired My Boss and Made More Money.
Statement of work saves back-and-forth
Once the statement of work is created and presented to the client, in general, there should not be a lot of back-and-forth because you have been formulating the statement of work with the client during your conversations and recapping each in writing. In most cases, adjustments to the statement of work will fall under two categories: Scope and Fees. We often see clients either request the scope to be more detailed, adjust priorities, or include a few more things that have recently come up. Be sure to step back and read through it all carefully with each adjustment to ensure it is still consistent with the original intentions and that you can still deliver.
Invoicing and Collections
This does not need to be complicated or fancy. Following are a few tips to keep in mind:
Professional.
Your invoice should be professional and include all pertinent information. Whether you are creating it in a word-processing document or using a bookkeeping program such as Quicken or QuickBooks (desktop or online), it should look professional. Open and review each invoice before sending. Is your contact information on it? Are your payment terms and address on it? Yes, all of this information was included in the statement of work, but accounts payable personnel rarely, if ever, get a copy of your statement of work, so it should also be on your invoice.
Key elements of an Invoice
- Date of invoice
- Payment terms and due date (make this as clear as possible)
- Logo (if you have one)
- Vendor name and address
- Client’s name and address
- Description of service
- Quantity of units
- Units of measurement
- Cost per unit
- Extended cost (number of units × cost per unit; e.g., 2 days × $1,600 per day = $3,200)
- Total amount due
- EIN #
- Make checks payable to
- Wiring/ACH information (try to set up all of your clients on ACH payments; this will eliminate lost checks, and customers tend to pay faster if they pay their vendors via ACH)
Consistent with statement of work.
Ensure all information on the invoice is in line with the statement of work. If your statement of work terms are net fourteen and your invoice template says “due upon receipt” because those were the terms for the last client you invoiced, update it. As simple as it is to have one template, we have seen some pretty basic errors occur. The more mistakes you make on invoices, the slower clients are to pay you.
Delivery of Invoices.
Although you may be working on-site with the client, send your invoice electronically. Paper is too easily lost, misplaced, or miscommunicated.
Description of Services.
This depends on your personal style and the agreement with your client and can be as basic as a few words referring to your weekly update report or a detailed description of what was accomplished during the billing cycle. Focus on accomplishments, not a detailed accounting of your activities. You are not an employee. You are a vendor providing services as they relate to an statement of work. Your description should reflect that accordingly.
Collections.
Manage your clients for invoice payments. Do not assume they got the invoice and are processing it. If payment is late, in most cases this is not done intentionally. Invoices simply get missed. You aren’t always brought in under the best conditions, and those can include an overworked accounting department. Effective executives get ahead of issues and introduce themselves to the individuals processing their payments, either in person or virtually. Build a relationship. Let them know when to expect your invoices. Some are so great that they will contact you if they haven’t seen anything come across their desk by the dates you gave them.
They are not the most interesting part of the journey, but the statement of work, invoicing, and collections help most independent executives stay in business and do what they enjoy. These can be as simple as you want, as long as clients have the information they need and you can track and collect your accounts receivable.