How to deal with unpaid invoices?

[Panos Daras]

I used to work as a Credit Controller in one of the biggest travel accommodations agency in the world. The way we handled these cases was to call the clients three times within a week, for two weeks. If they didn't respond, we would cut the service.

Although I disliked that job, I was the highest achiever on the team by far because I called big accounts almost twice a day.

According to our data back then, if you managed to get payment within 30 days, you were in good shape. If not, you were unlikely to ever see that money ever again.

However, B2B is different from B2C, and maintaining good relationships is crucial. If I were you, I would call every day and ask for a Proof of Payment screenshot. Also, it is important to understand why these delays happened from their side.
Was it because they are low on cash, just forgot, or because they are just scams of the earth?

 

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[Kevin88660]

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.

Someone should create a “glass door” to warn others of businesses who do not pay on time.

When you meet people who do not pay you you have to assume the worst of their character, because most likely they could be testing the boundaries of everyone and only paying first to those who scream at him the loudest, and with you being the nicest guy become the last one to get the money if you ever get them.

Being busy is not an excuse to not having one minute to do the bank transfer.

I consider how one deals money with others the biggest litmus test of their characters. Nothing else comes close to this.