Put it in writing: Ensure you get paid

July 11, 2011 - Tags: Managing Sales

As an entrepreneur, you often wear many hats. Not only are you responsible for providing your customers with the excellent products or services that they require, but it is also up to you to ensure that you are paid. After all, if your customers do not pay, you have no income.

One way to avoid non-payment is to use a contract. It makes sense to put in writing any decisions that are agreed upon by you and your customers, instead of relying on verbal agreements. A contract can protect both parties, so it is in everyone's best interests to have one in place.

You may wish to create a simple template that you can tailor to different jobs or projects. Include the payment terms, such as amounts to be paid, deadlines to meet and work details in your template. A lawyer should be able to help you with this.

Communication is also key for a successful transaction. The more knowledge that is shared, the fewer surprises there will be. It is a good idea to:

  • Get references before taking on new clients
  • Go over the terms of the agreement before you start the job (will you ask for a deposit?)
  • Make sure you have various forms of contact information, and that the customer has yours
  • Send the invoice when the job is done instead of waiting until the end of the month
  • Follow through after sending the invoice

It can be easy to overlook details, but attention to administrative tasks can help you get paid on time. You may want to:

  • Break down the job into smaller, billable chunks
  • Make sure the math is correct
  • Send an invoice that is locked or that cannot be edited by the other party (for example, using a PDF if sending via email)
  • Keep your records accurate and up to date

Your business depends on a healthy cash flow, so there is no need to be shy about looking after your interests once the job is done. For more on this topic, see our section on Getting paid by your customers.


Posted by Canada.ca on July 18, 2011
Hello Maria,

You may have an easier time to prove a business agreement if you hold a signed and detailed contract. A contract also ensures that all parties are clear on what to expect from each other. Signed contracts (and amendments to them) hold weight in the court of law whereas oral agreements can be difficult to prove.

Regarding the legality of your specific business agreement, you may wish to consult our page Legal issues for small businesses.
Posted by Joann Lawrence on July 16, 2011
I am looking for funding to build a youth center in Saskatchewan that includes an addiction/recovery component.
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