Rocking Your Contract-to-Cash Cycle
Published September 30, 2020 | Business Strategy
How can you streamline your client on-boarding and get paid as easily, quickly, and efficiently as possible and create raving client fans in the process?
By mapping out your contract-to-cash cycle and utilizing a standardized contracting process.
Having the proper contracts in place for your services or sale of your goods allows everyone to be on the same page, and helps your new clients to know exactly what they can expect working with you.
Read on to learn why you should consider streamlining your initial process, what should be included in your contracts, and how to make it all easier, more efficient, and dare I say…fun… for everyone!
There’s a lot of excitement when you bag a new client, isn’t there? And most of us just want to dive right in and start doing the work! However, making sure your contractual ducks are in place can serve as a wonderful communication tool and help you to solidify your client relationship. It’s easy (and tempting) to overlook the importance of documentation, hoping to simply avoid the hassle altogether, but it’s a very important part of doing business.
The truth is, people will take you more seriously if you have a contract in place.
Professional contracts help to establish what your client relationship looks like from beginning to end and gives you parameters that protect you and your client.
Do you want your clients to call you at 10am or 6pm? Do you require a 48-hour notice for projects in-hand? How long will you be working together? When and how will you be paid? What happens when they do not pay? You can spell out details like these, and many more, with the proper clauses in your contracts.
Having this language in place also comes in handy as things come up that are unexpected, uncomfortable, or not a part of your initial scope of work. You can simply refer back to the contract, make any necessary changes, and communicate with one another openly. This way, there is a lot less stress, and a lot more confidence. Sounds nice, doesn’t it?
A contract, of course, also helps to protect you legally and gives those who provide you with insurance a reference baseline, in case something arises that could become a problem down the road. If it’s all spelled out in the contract, you’re covered! (Or at least, set up to handle the inevitable ups and downs better.)
An important part of your contracting language from a Zen Money perspective is all about getting dollars in your door. It outlines how and when a client will pay you. Many of us have heard the admonishment, “If you’re not getting paid, you don’t have a business…you have a hobby,” which is why you do not want to overlook this important piece or take it lightly.
Thinking through whether you require a deposit or charge a monthly retainer is a crucial step in mapping out your money world and directly drives your cash flow, so let’s get hyper clear on this part. You can break this down depending on your type of business, how you work with people, and the product or service you are offering. It can change in each contract or you may have a standard recurring structure. You can send an invoice, you can offer a payment plan, or you can charge a client’s credit card on a certain day every month. The sky is the limit here, but the key is to keep it simple to manage and easy to explain to your prospects so there’s no confusion later on.
It’s a great goal to get at least some of your contract paid up front and I always advise business owners not to start working until they have at least a portion of the money in hand because chasing people down for money is not fun for anyone in the equation. And it doesn’t translate into a positive customer experience. You can usually avoid that by being very clear on the front end and including wording in your terms & conditions as to how you will be invoicing and receiving payment.
While the standard “work now, invoice later” model is often still used, I don’t recommend it because you take on the risk that the client won’t pay you and you’ll be left on the hook. It’s simply not as effective and can lead to bad feelings all around.
The purpose behind having a smooth transaction system in place is to accelerate the process of getting paid and increase the ease and experience for our clients. There are tons of ways to go about it, from online invoicing to receiving checks in the mail. The main thing to keep in mind is that you want to spell out exactly how it will work in the contract so that it’s clear and easy for people to make their choices when working with you.
Once you have your contract wording ironed out and a good on-boarding system in place, it’s important to look at other areas in which there might be holes when clients and customers want to work with you.
Is it taking a long time to get your contracts signed and returned? If so, let’s look at ways we can reduce that delay. Maybe you need to reach out to follow up multiple times or have an assistant check in to make sure your prospective client received your proposal. Ask if they had any questions or concerns. If people consistently come back with a lot of questions after receiving your contracts, it might be time to to adjust the wording or your systems and processes to make it more understandable.
Examine this from your client’s perspective and ask yourself, “how can we make it easiest for them to say yes and get excited about working with us?” Make sure that the contract sufficiently answers the most important questions, and that the software or system you use to get signatures and receive payments are easily accessible and not confusing to anyone involved. (That means you, your client, and any staff supporting this process!)
Once all the details are hammered out, it’s time to think about the rest of your onboarding process. What are the expectations in starting after a client signs on the digital dotted line and sends over a deposit? You definitely don’t want your client to feel that after you have moved them through this cycle, you’re now too busy to help them, or have moved onto selling the next person, so it’s important to put thought and intention behind what your kickoff process looks like.
How long should it take? What steps are involved? Does your client need to schedule a meeting or provide additional information? What do you need to get started? Can any of these steps be automated?
Having a clearly defined onboarding process that walks someone through what you need from them, as well as what they can expect from you, is essential for everyone’s peace of mind.
As you can see, it’s powerful and freeing for everyone involved when you begin to think of your business in terms of what it looks like through the perspective of your new client.
Put yourself in their shoes, from the super exciting initial phase of first contact to every step afterward as they come on board. Making sure you have all your ducks in a row from contracting, to getting paid, to onboarding is so important, and liberating when you get it right.
Is your contract-to-cash cycle helping you create raving client fans? Are you rocking it your on-boarding? If not, and you’re ready to dig further into your contract-to-cash cycle, grab your copy of Zen Money Map here!
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