Hi Fastlaners,
I'm curious your thoughts on the topic of your clients paying your invoices late. I know I'm not the only one that deals with this, so I wanted to see how others address it.
One of my client's who I do some consulting for one day a week has been late on paying my invoices twice now. He runs a small IT company and doesn't have anyone that handles the administrative duties/payroll/accounting and such, so he does it himself. Fair enough. Now, that'd be fine and dandy if he could keep track of everything and stay on top of it, but he's also busy micromanaging his employees (I used to work at his company as a W2 employee and experienced it firsthand), doing sales/biz dev tasks, and constantly taking vacations. Part of me gives him the benefit of the doubt, but the other part of me has no sympathy for his situation since he could easily fix a lot of his issues by delegating tasks. If I was in his shoes, I'd just hire someone to help me with it so I could focus on business development and other more important things, but I digress...
Anyways ,normally this kind of thing wouldn't bother me so much, but it does for two reasons: 1) I need the income and hate having to constantly send reminders, and 2) I've heard horror stories from some of his previous contractors who have reached out to me on LinkedIn. One guy told me that the CEO owes him $15,000 in unpaid overtime. Yikes.
I just sent him an email with screenshots of the unpaid invoices, essentially saying "pay me or I'm not going to work for you anymore", in the most professional way possible. The topic was top of mind, so I wanted to hear other people's takes on it.
I own a lawn care company so this is a problem I’ve dealt with before.
We used to send out invoices and customers would wait forever to pay, or hold our money hostage saying “I want it nicer” until we’ve spent far too long at a job site.
Get credit card info upfront.
Tell them they need to put down a very small deposit. Run their card and keep their card info on file. Have them sign up with you and on the sign up form is a payment authorization to allow you to run their card.
Then, when you’re done, charge them the full amount. The money is yours. Right away. No waiting. Don’t let people jerk you around and F with your cash flow. It’s up to you to decide when it’s done, not the arbitrary feelings of a customer.
We collect all card info and I just learned that some customers will try some sneak shit like waiting until their card expires until complaining so make sure if it’s recurring services to require an updated card before their current one expires. We use QuickBooks to run the cards automatically each month on the 1st.