I used to be uncomfortable discussing money with clients. With late payments in particular, my “strategy” was to just wait and hope I’d eventually get paid.
And then, a few years ago, I had a client whose business was going through some hard times; she was a few months late on an invoice of several thousand dollars. Wanting to be a nice guy, I said, “Just pay me what you can, when you can.”
When I related the story to my friend Betsy (a professional with many more years of experience than I), she said, “Congratulations, you just put yourself at the back of the payment line.” Betsy then went on to explain the importance of staying on top of outstanding invoices, and of agreeing on a firm payment schedule (even if it was just a little bit each month) with any client who was overdue.
Betsy’s advice has paid off several times since then. Today, I track my receivables closely, and on Day 31, I get on the phone to inquire about the late payment. Interestingly, and almost without exception, clients are apologetic and often don’t even realize the invoice is late.
Here’s the bottom line: If you’re going to do work for people, you need to get comfortable with collecting money. Set up a system for tracking receivables and don’t be shy about inquiring when a payment is late.
Interesting point. Thanks for sharing the lesson learned.