ForumsShop Talk

Yes, in my view, initiating twelve follow-up contacts in six weeks regarding invoice payment is excessive -- perhaps even harassing.

Good cash flow management and payment collection requires:

(a) a written policy regarding the terms of payment (do you have one, and did you verify the client's bank and credit references before you agreed to perform the work under the terms of payment that you did?);

(b) incentives for prompt payment and penalties for late payment (does your invoicing provide for those?);

(c) consistent and professional billing practices.

For instance, if you want to be paid in 20 days, then offer a discount for paying by then. If they don't pay by then, the your standard billing practice might be a voice mail on Day 20 noting that you're sending another invoice with full payment due on a specific date. If that date arrives and payment is still pending, your policy might be to send a courteous letter with a copy of the invoice reminding the client that payment is now overdue and that a late payment penalty will start accruing as outlined in your billing policy. You could then follow up with a phone call inquiring as to whether some type of payment plan needs to be negotiated.

Just like individuals, some companies always pay their bills promptly and some almost never do. Some large firm and government agencies have lots of administrative layers that an invoice has to travel though, and that can take time. Some small businesses use outside services that only process and pay invoices once a month. Aside from those things, slow payment usually means the client has money problems (which you would ideally discover before extending payment terms), or it means the client was dissatisfied with the work after the fact. To be sure it isn't that latter one, make it a practice to call the client after the work is complete. Ask for the client's acknowledgement that everything was satisfactory, note that you are putting the invoice in the mail now, remind the client that there is a discount for payment within 20 days (or whatever your policy is), and get a verbal confirmation that payment will be sent by then (or that it won't, if the client needs longer to review and process it).

With good billing practices, it would be reasonable to contact a client regarding payment three times -- or maybe four -- in six weeks, but not twelve times.

Hope that helps. Good luck.

AMSPCS, you seem to have read a lot of stuff into my post that I didn't write. What I said was, ". . . send a courteous letter with a copy of the invoice reminding the client that payment is now overdue and that a late payment penalty will start accruing as outlined in your billing policy. You could then follow up with a phone call inquiring as to whether some type of payment plan needs to be negotiated."

I didn't say ANYTHING about what happens after that. I sure didn't suggest that the business owner just let things slide. I teach this stuff, too ("How to Get Paid AND Keep Your Customers"). In general, if you wait a month past the due date to initiate collection efforts, the odds of being paid drop by 8 percent. If you wait three months, they drop by 28 percent. For some service businesses, the numbers are even worse. When payment is overdue, you get after it immediately. I didn't say anything to the contrary.

In this instance, however, the post didn't say that. It said that there were twelve contacts regarding payment between the day the invoice was sent and six weeks later -- quite possibly, ALL of those contacts were made prior to due date the client initially understood or expected. I think that would really tick off most professionals. It might cause the loss of future business, and with some clients, it might also cause the "loss" of the invoice and delay payment even more (especially if there's no stated policy/penalty).

There are some things we just don't know, but need to:

Was this job part of an ongoing project?

What are the payment terms given to the customer (not everyone is 30 days, I'm not)?

Is your contact person the individual who initially green-lighted the project?

How does this help? If the job is part of an ongoing project you may need to weigh the possibility of damaging the relationship, and you might consider amending your pay policy to prevent this from happening again (either way you need to worry about the relationship).

If the terms were 30 days, they are late by two weeks but your post seems to indicate that they are 6 weeks late, meaning this job was to be paid upon completion. Late is late, but time does factor into this.

If your contact person is not the individual that open the job, then send your contact person a nice email informing her that you will be contacting that person or the owner of the business about this matter. Remain professional but there is no rule about going above someone's head.

In this age of the Internet there is a method that has long been forgotten - it is called getting in your vehicle and going over there for a personal visit. All you calls and emails have done is annoyed her. A in person visit changes the dynamics of the situation. And allows you to gain an insight into the situation, there is a lot you can learn about a business by simply visiting it. Now, some will be against this and I understand why, but I really believe some of this can be resolved with a little human contact.

I've had an invoice go over 120 days late. And in that time the owners of the agency were stonewalling me left and right - they lost the invoice (which I emailed and mailed AFTER hand delivering the first copy); they had a change in accounting and thought the check went out; the check was in the mail, twice. This was a nice size project that got them plenty of inquiries and press, and it took me stopping by to get a check cut. I wasn't angry or unprofessional, I did show up unannounced and sat in the waiting area for almost an hour but I left with my check.

After that I changed my policy to avoid having to do this ever again.

So, I say all of this to say, "depending on the amount of time the payment is late - the number of calls may be excessive but one visit may help to resolve this quickly and easily."