getting clients to pay on time

[wanda]

I and am sure many others have experienced cash flow problems at one point from clients not paying within the given time frame.

I was hoping to get ideas on how others tackle late payments.

From our experience you get those that genuinely forgot, tends to be smaller companies. Then you get those that have accountants on holiday every end of month. Lastly you get the kinds who disagree with the invoice amount, conveniently after the invoice is due.

I have thought of applying the following to get paid earlier.

1) Threaten to hold my breath until they pay.

2) Banging my head against a brick wall.

3) Tightening up terms and conditions of the payment terms. (More realistically)

[steve-t]

4) hire 4 large gentlemen with baseball bats to visit clients at time of delivery
tell them they'll be back 1 day after invoice due date hint hint
Steve

[wanda]

5) Hiring the Mafia to "take care of it"

[Paddy]

Here in Northern Ireland we just send the 'boys' round for a frendly word / knee capping. Never seems to fail.

There have been plenty of folk in the news this last couple of weeks selecting the knee capping option over the frendly word. They all seem happy enough.

P

[davelowe]

I and am sure many others have experienced cash flow problems at one point from clients not paying within the given time frame.

I was hoping to get ideas on how others tackle late payments.

From our experience you get those that genuinely forgot, tends to be smaller companies. Then you get those that have accountants on holiday every end of month. Lastly you get the kinds who disagree with the invoice amount, conveniently after the invoice is due.

I have thought of applying the following to get paid earlier.

1) Threaten to hold my breath until they pay.

2) Banging my head against a brick wall.

3) Tightening up terms and conditions of the payment terms. (More realistically)

I've had this problem in the past. It isn't simple to solve, but it can be tackled. It depends on who your customers are, the goods and services you provide, and how much you value their custom.

Try this:

a) large companies:
(i) Always get the name of the person who is responsible for signing off the work on the invoice itself.
(ii) Accounts departments often have a 'rule' that they "can't get any work done so don't take phone calls until after/before 2pm". Make a note of this and call appropriately. Always get the name of the person you are talking to. Inform them that you are recording the conversation if you aren't getting anywhere.
(iii) Ask to speak to a supervisor - this often moves things along.
(iv) Email reminders at weekly intervals (or whatever suits your terms). I used to have 30 days from date of invoice - it often went to 90 days.
(v) Ultimately remind them that they are in breach of contract if they fail to comply. Tell them to refer to your 'terms and condition'. I never had any, so I made them up if required since they never asked to see them before - this is a useful tactic.
(vi) BACS payments are used by some firms as a tactical reason to delay another 3 - 5 working days. Similarly with cheques (our finance director isn't around to sign it). Ask or demand that you will visit in person to collect cash.

b) small companies:
(i) Be best mates with the customer. Banter does work.
(ii) Acknowledge that they have to receive payments from up the food chain, but remind them that you do too.
(iii) Only take so much sh1t before being more forceful.

c) Be prepared to write off some payments. As a last resort, go to the nearest crown court and issue small claims proceedings if the amount is <£15k. You will lose customers if you go down this route, but you will get the money as unless they are going out of business, they will not want a CCJ on their credit file.

It's a fine balance, but doable. The key is the fine line between being pissed on, and pissing your customers elsewhere. Tread with caution.

[wanda]

I and am sure many others have experienced cash flow problems at one point from clients not paying within the given time frame.

I was hoping to get ideas on how others tackle late payments.

From our experience you get those that genuinely forgot, tends to be smaller companies. Then you get those that have accountants on holiday every end of month. Lastly you get the kinds who disagree with the invoice amount, conveniently after the invoice is due.

I have thought of applying the following to get paid earlier.

1) Threaten to hold my breath until they pay.

2) Banging my head against a brick wall.

3) Tightening up terms and conditions of the payment terms. (More realistically)

I've had this problem in the past. It isn't simple to solve, but it can be tackled. It depends on who your customers are, the goods and services you provide, and how much you value their custom.

Try this:

a) large companies:
(i) Always get the name of the person who is responsible for signing off the work on the invoice itself.
(ii) Accounts departments often have a 'rule' that they "can't get any work done so don't take phone calls until after/before 2pm". Make a note of this and call appropriately. Always get the name of the person you are talking to. Inform them that you are recording the conversation if you aren't getting anywhere.
(iii) Ask to speak to a supervisor - this often moves things along.
(iv) Email reminders at weekly intervals (or whatever suits your terms). I used to have 30 days from date of invoice - it often went to 90 days.
(v) Ultimately remind them that they are in breach of contract if they fail to comply. Tell them to refer to your 'terms and condition'. I never had any, so I made them up if required since they never asked to see them before - this is a useful tactic.
(vi) BACS payments are used by some firms as a tactical reason to delay another 3 - 5 working days. Similarly with cheques (our finance director isn't around to sign it). Ask or demand that you will visit in person to collect cash.

b) small companies:
(i) Be best mates with the customer. Banter does work.
(ii) Acknowledge that they have to receive payments from up the food chain, but remind them that you do too.
(iii) Only take so much sh1t before being more forceful.

c) Be prepared to write off some payments. As a last resort, go to the nearest crown court and issue small claims proceedings if the amount is <£15k. You will lose customers if you go down this route, but you will get the money as unless they are going out of business, they will not want a CCJ on their credit file.

It's a fine balance, but doable. The key is the fine line between being pissed on, and pissing your customers elsewhere. Tread with caution.

Are you sure you havent been working for me in the past? That is exactly the problems I have been facing. I had one company that went into administration but simply started up a new company with a different name and transfered all his assets to the new company. Basically paid 20% of the invoice and gave the thumbs up for the rest. The anoying thing is that what I charge the company is roughly 8% of what he is making. Yet getting the loot is such a nightmare.

I have had to take two companies to the small claims court recently. I won both, one paid up with interest plus legal fees another is trying to over turn the judgement. It just drives me up the wall that companies try and delay payments. I have been told by one company that they felt my fees where a bit too dear. Mind you this was three weeks ago for a job that had been invoiced in december. The payment terms where 30 days and only now that I threatened to take them to court is when they want to say my charges were too much.

And to top it all off I am sure the landlord will not be waiting for his rent. Sometimes I wonder how is a small company supposed to make money when you get all the jobs but get paid only after wringing necks.

Thanks davelowe for the advice, I feel like a real moaner today, sorry.