Last week, my business made £1,180 from a customer without doing any work. All it took was for this particular customer to pay their invoices late. This one customer was over 80 days late in their payment, and the amount was large.
Late payers can kill your company. There is nothing worse than having completed work, and having to nag, chase and threaten a client in order for them to pay their bills. Whilst they sit back withholding your money, your own bank balance reduces and panic can set in.
There is lots of advice available on the web about what to do about late payers for Freelancers, Contractors and Small Business. I myself have talked before about various ways of dealing with late payers. But a lot of this advice is not being honest about the real world, and how business really happens. So let’s all put aside the make believe situations, and talk about what you can REALLY do about late payers.
One of the many hats that freelancers and small business owners have to wear is that of the accounts manager â dealing with the invoicing, paying bills, analysing profit and loss, and of course chasing payments from customers.
Unless you are very lucky, there will be times when customers will take advantage of you as a freelancer or small business owner by stretching payment terms beyond what you specify or has been agreed, into something that suites them. This is true now more than ever with the credit crunch and people using cash flow to prop up companies.