Anyone who’s ever taken on a custom order knows it can sometimes be difficult to collect payments on time. Today’s shaky, COVID-stricken economy has only made the financial pressures on makers heavier and more urgent.
Fortunately, you don’t need to invest in expensive systems or infrastructure to incentivize customers to pay on time. Basic steps including communicating clearly from the beginning, taking a deposit upfront, and using invoicing and reminder systems can ensure you get paid in a timely manner.
Before you take on a custom order, be sure you’re collecting all of the relevant information from your customer. If you plan to take on custom orders on a regular basis it may make sense to create a standardized form for this stage of the process. Clear communication between you and your customer right from the start will help ensure that everyone knows what to expect at each stage of the process.
Consider whether the customer order is within the scope of your business. The longer you’re in business, the more you may find that you need to say no to custom orders that are unrealistic or don’t fit in with your brand. You’re ultimately the decision-maker when it comes to what sorts of orders you accept. Taking on work that you can complete on time and to the customer’s expectations will mean being able to bill on time and end the transaction with everyone satisfied.
Spell out a timeline for the stages of completion of the work. Will you be creating a proof for the customer to review? How long will they have to look it over and approve it? How many revisions will they be able to make before the design is finalized? If you’ll be shipping the work to the customer, be sure to include the timeframe for shipping and shipping costs in the estimate. If all of this is communicated in advance, both you and the client will be more likely to have a good experience with the transaction.
And finally, think carefully before taking on custom work for friends and family, especially at a discounted rate (or for free). It’s hard to build a business this way.
Collect a deposit upfront
Collecting a down payment, or payment in full, upfront from customers is a smart way to prevent loss. Yarn artist April Fiet, requires her customers to cover all material costs of the crochet items she makes and collects the labor cost when the order is complete. “That way, I can at least cover my expenses should the person not follow through the rest of the way,” she explained. Others take a more standardized approach of collecting half of the total cost upfront and the rest upon delivery.
Experienced knitter, seamstress and upholsterer Allison Baskett advises holding a formal “Get to Know Your Client” consultation before beginning to work. “You’re being paid for a service. If they can’t afford it now, they need to wait until they can, or you can work with your customer to find a payment plan that satisfies you both,” she said.
“I generally discourage people from larger projects if they feel they can’t pay it all at once.”
Floral display by The Bride Candy.
Make use of technology
Verbal negotiation with customers can be unpredictable in a way that technology is not. Setting up a Customer Relationship Management system (CRM) side-steps the need to personally remind a customer of their remaining balance due.
Jeremy Mason, who runs Floral and Event design company The Bride Candy with his fiance Christopher Plaza, uses the client management software HoneyBook to manage customer relationships. HoneyBook has an autopay feature that will charge customers for the payments they owe upon delivery without the need for follow-up. “You need to make a proposal and have them sign it that outlines payment terms,” Mason said. “Honeybook has templates and a lot of resources for this.”
There are a few things to keep in mind when adopting such technology systems. Ethan LeBlanc, who owns an artisan glass business in Louisiana, uses QuickBooks for all of his invoicing. However, he has had some issues with the mobile app and the features it lacks, specifically the app’s inability to show a customer’s full payment history.
“Sometimes when I’m on the job with the customer, I want to pull up their full invoice history, but I can’t do that from my phone,” he said. Technology can definitely help manage customers’ payments and the timelines in which they deliver them, but it is important to know what features are lacking before deciding to invest.
If you need to generate an invoice quickly, PayPay has an invoice generator that’s easy to customize and makes it simple for your client to pay online. Most bookkeeping software, like QuickBooks and GoDaddy Bookkeeping, also include invoice generators.
Stick to your local market
Another way to avoid the hassle of managing customers’ payments is to keep all sales within a local area. Sue Gibson, a versatile crafter based in Lubbock, Texas, has never had a problem collecting payments from customers due to the fact that she knows most of her customers personally and they come to her studio to retrieve their goods. “Mainly, I’ve taken cash or a check when they picked up the item,” she explained. “If it’s a special order, I always require half of the bill when they ordered and the rest when they picked it up.”
“If they have half of it invested, then they will come and pick it up.”
Involve your customers in the making process
You can motivate your customers to pay on time by including them in the story of their item’s production. New Orleans-based knitter Sammi Kat sends daily pictures and updates to the clients who have commissioned him. “I have actually never had a problem collecting the balance once folks pay a 50% good faith deposit and see the progress pictures,” he said. “I find clients tend not to flake out once they have been made part of the process in that way.”
Danielle Kerani started AK Kerani as a 19-year-old freshman in college. Though at first, it was just a platform to sell knit goods, it became a revolution. She lives each day with the hope of making the dark days of those around her better and believes with all her heart that mental health is a universal pursuit.
In my spare time, she can be found writing songs at the keyboard, jetting off on long runs, out on the town with friends, relaxing with family in New York City or Texas or laughing. She’s grateful to her entire team at AK Kerani and her passion and dream is to continue to take the company to new heights!