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I find that as soon as I issue an overdue invoice with interest applied (my terms are 18.5% pa compounding daily on overdue amounts) the payment miraculously appears.
I also time-limit any electronic documents I issue to expire when the payment is due. It doesn't affect the client if they just print them but more and more people keep everything electronically. A blank screen when someone goes to open a PDF prompts a phonecall, which prompts me to remind them that they have an overdue invoice :D. Once they have paid they get an un-secured file.
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Its a perpetual problem. Govt departments can be the worst.
A couple of other things not mentioned so far:
1. Diversify, so you're not totally reliant on one customer. 90% is too risky.
2. You can't make it too easy for a customer to pay, Get credit card facilities if you haven't already. The cost is worth it.
3. Have clear payment terms agreed upfront, before the job starts. Not on the back of your invoice. Doesn't help initially, but it will in a dispute.
4. Don't have those 30 60 90 day boxes on your statements. It just implies you accept delayed payment.
5. Lastly, it seems these days that payment doesn't happen until you chase by phone. Seperate the debt collecting from the work, play good cop-bad cop. Get someone else to do the chasing if you can.
When you grow beyond the one-man band, using a fictional name & email address when chasing really works. You can maintain a good relationship, and the aggro is with "Bob" in your admin section.
Regards
Max P
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I must start using the security features on PDF more often.
If you are having ongoing trouble, it might be worth looking at opening a Dun & Bradstreet account so that you can do a basic bureau inquiry on ALL account applicants before you advance them any credit. D&B have a debt collection agency too. Anyone who has had a judgment against them or been bankrupt pops up with details of the issues (detail varies on how much you pay) but it was VERY useful for one of my previous jobs where we were pushing as many new accounts as possible.
A simple warning that an uncontested debt (uncontested if they have not responded to invoices, outstanding invoice letters etc) will be taken further if payment is not received within seven days is normally enough to get action.
I have had to go and make a nuisance of myself before to extract final payment but if it comes to that you've come to the end of your relationship with the soon to be ex-client.
Another good one if you are finding it hard to contain yourself when these pr!cks don't pay on time, but you want to keep the business, is to get another family member to become the "accounts payable officer". This way they can do the verbal kicking of the client's accounts person and you can stay nice and friendly with the people you normally work with. I know how hard it can be to contain the frustration when the odd invoice is paid late but you want to keep the client.
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I agree with separate production and accounts departments. All companies do that. And rarely in big organisations is it the person saying yes to and managing the job and working with you that ever talks to thier accounts dept.
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Unfortunately (and I don't mean to offend any accountants) to most accountants you are simply a number on their screen and when managing cash flow the squeaky wheel gets the oil...
Make yourself heard.
Do talk to your regular POC as well, let him/her know your frustrations and he should talk to his accounts dept to inform them how valuable you are to him as a contractor.
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Self employed for over 15 years
Bast*rds thats mine money and I want it
Few things I have done are
Put a multi national company in the collectors for $50, might add that they didnt like that (or me). Paid within 3 days
Put a local realstate in the collectors for $15. Paid the same day and they asked me why , why wouldnt I, its my money.
Swipe their credit card at the time the job is done, you will be suprised if the company needs your surverices what resources they have available.
Turn up on site and start dismantling and removing your property (makes interesting conversation in a busy office)
Invoice on completion of job with terms clearly stated (no more than seven days), follow up with statement (with accounting fee) so they recieve it on the seventh day. etc
Had people ring me and say they are doing it tough, what can we do. I will talk to any one that rings and as long as they make some endour to pay and keep in touch thats ok.
If you owe me money dont dare cross the bloody road and make out you didnt see me (my pet hate)
Had one company that we had been working a small debt with for about 18months, they eventual went belly up and we were left with about $1000 that we thought we were never going to see. Had a knock on the door 6 months latter with the director there with the balance in cash, I asked him why and he said that we were the only ones that tried to understand and were willing to work through the issues with them.
Only ever lost a total of $2500 from 2 seperate jobs the whole time I have been self employed.
COMUNICATION
cheers
blaze
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I have no worries about not being paid by the offending company, it's just their lack of consistency relating to when they pay, plays havoc with cash flow and really frustrates me:mad:
Some good tips there thanks all for the advice
Cheers
Phill
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Also, the nice thing about websites is that they can be turned off. No trespassing required!
It's amazing how quickly some people deal with payment when they are REALLY interested!
:twisted:
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My major clients are all banks and don't like paying up.
I have found a phone call to their accounts section has helped in the past. Explain that you are a small business and can't afford to carry the debt. Quite often it's the person in the account section who can make the decision to pay earlier.
I tried the discount thing, but generally the bigger they are, the less they care about it. As someone said earlier, if they're consistently late, jack up the fee. They may not pay earlier, but at least you're compensated.
