Why It’s Critical to Document Everything in Business – And 5 Easy Steps to Get Started

I recently watched a video in one of the FB groups I’m in, about a business owner who didn’t follow her gut, picked up a nightmare client against her better judgment, provided services to said nightmare client through an entire month, only to be hit with a PayPal dispute (client demanding a chargeback after the services were rendered). The whole story reminded me of one piece of advice I always give to every client: DOCUMENTING everything in as much detail as possible is one of the BEST BUSINESS HABITS you can establish.

Here are a few easy tips to get started:

✔ Obviously, any business relationship has to be documented in a contract, which of course needs to be 100% clear on what service is being provided, the price you’re charging, your payment terms, your return/refund policies, and other important stuff like warranty disclaimers, etc.

✔ Another excellent opportunity to document is every time you reach a benchmark in a project: send an e-mail summarizing what you just did and what your next steps are going to be. Benchmarks not only allow you to document, but they also help you ensure that you don’t perform too much work without getting paid, and give you a chance to kind of regroup with the client to make sure you’re STILL on the same page. Usually their response is positive, so you have written confirmation that everything is going well so far.

✔ You can also check up on your clients via messenger or other app, if appropriate for the situation/relationship. Any written confirmation they provide regarding their satisfaction with your service should be placed in their file.

✔ If you have an important phone conference with a client (or some other business relationship), it’s customary to send a follow-up e-mail summarizing point by point what you talked about and agreed to over the phone, simply because it’s human nature to forget minute details – even the important ones.

I always send a brief e-mail after important phone calls saying something to the effect of “hey, it was great to talk to you, here’s a short summary of my understanding of what we agreed upon, if I forgot anything, please add it to the list” followed by 5-6 short bullet points.

✔ Always document it when the client (or anyone else you have a business relationship with) is not living up to their end of the contract. If they’re not doing the homework, remind them in writing. If they’re missing appointments, document in writing (don’t lecture or go off on them – keep it brief and to the point, with a short 1-sentence e-mail/text reminder). If they haven’t paid on time, notify them immediately. Don’t wait quietly for weeks, giving them the benefit of the doubt, even though you might want to. Send that e-mail the day after they’re late paying you, then another when they’re 3 days late, another when they’re a week late, and then send a demand letter attaching your past reminders. (Of course, your contract should specify that sending an e-mail to the client’s last known e-mail address on file is sufficient for purposes of giving notice of breach of contract on any grounds, including nonpayment – and that such breach can serve as grounds for dissolution of the contract with no further notice required).

Keep in mind that, when it comes to PayPal (or any dispute, legal or otherwise), there is absolutely no such thing as “too much evidence.” Often (though not always), the side with the more evidence wins. Overkill is a good thing when it comes to documentation and evidence – because one day it may go beyond PayPal, and when you’re in front of a judge or jury, everything you say has to have a piece of paper, video, audio, text, or testimony (other than yours) proving it, otherwise it won’t carry much weight (and may even be inadmissible).