Taking Care Of Your Art Business - Invoicing And Getting Paid
Congratulations! You’re taking the gutsy step of applying your artistic gift and passion to a (hopefully very profitable) business enterprise. However, pure artistic talent alone will not guarantee a prosperous venture – in the sometimes unforgiving world of small business, it is essential to treat your customers right and to ensure your customers treat you right in return. To avoid disappointment and loss it is extremely important to conduct your financial affairs in an efficient and responsible manner – for the benefit of your customers as well as to protect yourself. There are many financial options available which can simultaneously ensure an exceptional customer experience and prevent potentially-damaging problems for the health of your business. Taking such steps may even help you stand out from the crowd!
Works of art can constitute a significant financial investment for a customer, and therefore it is important to ensure potential buyers are not stung by unexpected charges and circumstances, nor are scared off by being forced to pay the full value for your work in one go. Remaining transparent at all times regarding charges and providing the customer with a degree of flexibility in payment will help to encourage trust in you as a seller who looks after the customer and does everything possible to avoid appearing deceitful.
Pro Forma Invoices – You can ensure payment for your work prior to dispatch, and therefore protect yourself against completing work without payment, by sending your customer a ‘pro forma’, or quotation, invoice. A good ‘pro forma’ invoice sets out all the information that the customer requires to decide on whether to proceed with the transaction, thus helping to provide the best possible customer experience.
Part-Payment – As mentioned, your work could account for a sizeable proportion of a customer’s budget, and therefore it is good business practice to account for this, respect it and thus provide the customer with the option to place a (non-refundable) deposit in lieu of delivery, where then the remaining installment of the price would need to be paid. Offering part-payment ensures that the customer is more likely to be able to pay the full cost for your work, and that you receive some reimbursement and protection in the event of any defaults in payment of the final installment once your piece is completed.
In order to comply with the law, invoices must include certain information which ensures that the customer is completely informed, and that you are sufficiently protected in case of complaint.
- The word ‘Invoice’ must be displayed prominently
- An Order Number/Reference Number/other unique identifie
- Your (business’) name, address and contact details
- The name, address and contact details of your customer
- The date of order
- A clear description of the goods to be sold
- The quantity being ordered
- The total price of all items being ordered
- VAT amount (if applicable)
- Payment instructions
How to Send Invoices
It would be most efficient to ask the customer to provide an e-mail address upon ordering, thus allowing invoices to be dispatched in the quickest possible time for the customer’s convenience. However, for the non-technically minded it is also fine to provide hard copies of invoices, and good practice for all to include a hard copy with delivery of completed work.
It is a sad fact in business that the potential always exists for a customer to become a headache. It is vital to have contingencies in place for when customers fail to honour their commitments, in order to ensure you are not short-changed and that such situations are resolved as quickly and simply as possible.
According to the law, you have the right to consider payment late from 30 days after the invoice or delivery date. From this time, you are legally entitled to start charging statutory interest – of 8% plus the Bank of England base rate – on the outstanding balance, and to start taking steps to recover debt. You are also further entitled to further charge the customer a fixed sum cost of recovering this debt, at a rate of £40 if owed up to £999.99, and £70 if owed £1000-£9999.99.
In order to best protect yourself, and to ensure the customer is fully aware of their responsibilities, it is good practice to familiarise yourself with all relevant legislation, and include this information on your invoices. This ensures transparency on your part and leaves little room for irresolvable argument in the event of non-payment.
For more information regarding how to handle late payments, please visit https://payontime.co.uk/