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  • #999061
    Caitlin1
    Member
    • Total posts: 4

    My name is Caitlin and I help run a graphic design business (Sonja Meyer – Sustainable Graphic Design Studio). I’m responsible for project management, admin and social media so one my daily tasks is dealing with quotes and invoicing (and of course, chasing up late payments).

    Just for some context, Sonja had been running the business solo for 7+ years before I started in Jan 2018. We now operate as a partnership, outsourcing to other designers and developers for bigger jobs when necessary. Everything is going really well, and as planned, I have been freeing up Sonja’s workload so that she can focus her energy on all the creative stuff.

    The only problem we’re having is that the majority of our client’s have stopped paying us on time since the upscale! It seems the clients who have been working with Sonja for a long time are getting a bit TOO relaxed about the relationship…

    One long term client who is based in the States engaged us for some work at the start of July (!!) and still has not paid their invoice 3 months later. They’re also now not responding to emails from either of us. The bill is for $1,200.00 so it’a not a massive amount of money but it’s also not a small job for us either. We can only assume they’ve come into some financial issues as they have never expressed any issues with the work we have carried out. We have been patient and understanding, offering payments plans and such, but we are still receiving no reply… what are we to do now? Legal action is obviously not worthwhile for that amount and made more difficult by us being in different countries. Seems like a lost cause.

    At what point (1, 2, 4, 6+ weeks overdue) can we say or do something about it? What, if any, are our options? All clients are required to sign T&Cs agreeing to specific payment terms and deposit invoices are sent out before we start bigger jobs. We’re now considering applying a late fee to our terms, however, this will only be relevant to new clients signing up.

    So other creatives/freelancers/small business owners – do you have any tips that might help us prevent this from happening in the future?

    #1217578
    elissa.doxey
    Member
    • Total posts: 145

    I’m wondering if the clients mistakenly believe that Sonja’s business has been taken over by someone else, so they don’t want to pay? Seems odd that so many are holding back.

    In a previous life, I used to add an administration fee if we had to follow up on late payments. It wasn’t an outlandish amount, but somewhat compensated the time and effort (although not the monetary value) of chasing up invoices.

    Do you take a percentage as downpayment? I always advise (creatives particularly!) to take a deposit up front, and depending on the length of the project, another at a certain timeframe/deliverable, and the final payment on handover.

    Good luck!
    Elissa

    #1217579
    bb1
    Participant
    • Total posts: 4,485
    Caitlin1, post: 262346, member: 111728 wrote:
    At what point (1, 2, 4, 6+ weeks overdue) can we say or do something about it? What, if any, are our options? All clients are required to sign T&Cs agreeing to specific payment terms and deposit invoices are sent out before we start bigger jobs.

    The timeframe is based on what your agreed terms and conditions say. If like me it’s 7 day’s, then technically you are entitled to start chasing them for non payment after 8 days, but to me that would be unreasonable. Really it comes down to what you feel is a sufficient time frame, in my case if they are a new client and I am unsure I will start hassling them before the next visit, or if none planned, after about 2 to 3 weeks. If an established client with a good payment record, I let them go up to about 4 weeks, before a gentle reminder, which is normally followed up by a huge apology from the client as they have let is slip.

    I definitely wouldn’t leave it beyond 4 weeks even for an established client.

    In your case where you have sent a couple of reminders already, your next one should have a big red overdue sticker, with this will be referred to our debt collection agency if not paid within 7 days.

    #1217580
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,175

    I agree as above – for creative work, I think 50% up front with at least a further 30% when the final draft is approved is the way to go.

    We are very aggressive in our timelines (not our manner) managing our debtors and have good results vs being more passive.

    #1217581
    Caitlin1
    Member
    • Total posts: 4
    elissa.doxey, post: 262378, member: 88225 wrote:
    I’m wondering if the clients mistakenly believe that Sonja’s business has been taken over by someone else, so they don’t want to pay? Seems odd that so many are holding back.

    Do you take a percentage as downpayment?

    Hi Elissa,

    Thanks for your comment. No, they’re not under the impression that Sonja’s business has been taken over (we’ve both introduced me as the project manager/general admin person moving forward).

    We think the issue might be that because the business has upscaled to a partnership they might be viewing us more as a ‘company’ rather than a freelance business. Perhaps this translates into clients thinking we have more money and therefore they feel it’s ok to be slow in making payments. Or maybe it’s that Sonja isn’t personally chasing the money for the design work we do so they feel detached from the consequences.

    And, yes – we send out deposit invoices for new clients and for bigger jobs (like website design and development packages), but we don’t typically for older clients that we just do ad hoc work for.

    I was wondering if it’s actually just a reflection of the current economic climate in Australia (and in this case, America too). Businesses are struggling, especially small businesses, and we fall at the bottom of the ‘important’ invoices to pay pile.

    #1217582
    Caitlin1
    Member
    • Total posts: 4
    Paul – FS Concierge, post: 262385, member: 78928 wrote:
    I agree as above – for creative work, I think 50% up front with at least a further 30% when the final draft is approved is the way to go.

    Thanks Paul. Perhaps we should ask for more money upfront but I guess there’s always the risk they will then take their business elsewhere if we’re too intense. We tend to send T&Cs, timelines and deposit invoices all at once and I think some clients get a bit overwhelmed by our efficiency.

    There needs to be a sense that ‘we’re relaxed but professional’ so you should take us (and our timelines) seriously. But that’s rarely the case until a deadline is looming.

    I definitely agree that when it come to most creative services, once deliverables have been completed, payment should be even same day. I mean you wouldn’t typically pay your plumber or mechanic 3-4 months late for a service they provided that day.

    That said, we understand bigger companies have payment cycles in place (often bi-monthly or monthly) and we take that into consideration. I’m talking more about people who say “Great! Thanks so much for your work on this, I’ll process payment shortly” and then we don’t hear a peep for another 2-3 weeks, even when we chase up again after a few days etc. Makes it hard to plan ahead.

    #1217583
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,175

    We definitely have benefited from separating intent (to pay) from ability (to pay) and when talking to somebody who previously said they would pay, we ask about the mechanics of who pays and when they pay.

    We prefer to speak to Accounts people where we can finding this a more efficient approach that continuing to talk to people that can’t physically help us (ie, they do not have the Pay Paul button on their PC).

    #1217584
    Tom ISW
    Member
    • Total posts: 180

    I’ve been wondering about this too [USER=111728]@Caitlin1[/USER]; though my problem is a bit different. I have some regular clients who I do chase up, but they then say “oh, can we have a bit more time? Due to X, Y, Z?” and my reasoning is I can’t get blood out of a stone, so I let them have it.

    Should I, though?

    I have two payment options: 50% deposit/50% on completion, or 95% up front (5% discount.) It’s been working quite well so far.

    However a few clients have been stuffing me around in terms of paying, offering excuses and delaying due to “cashflow issues.”

    In fact, I’ve had to take a client to court for just that reason.

    My question is an add-on to Caitlin’s, (if she doesn’t mind!) – how does one avoid the reputation of being the “relaxed guy” when it comes to payment?

    [USER=78928]@Paul – FS Concierge[/USER] – I think PayPaul would be a great online banking platform :)

    #1217585
    bb1
    Participant
    • Total posts: 4,485
    Tom ISW, post: 262421, member: 54379 wrote:
    My question is an add-on to Caitlin’s, (if she doesn’t mind!) – how does one avoid the reputation of being the “relaxed guy” when it comes to payment?

    I think the answer is self explanatory. just say NO.

    And if you need a reason, say your kids need to eat as well, or you have cashflow issues as well. Say NO.

    Practice it daily. NO

    Did you realise that there are less letters in No then Yes.

    #1217586
    Tom ISW
    Member
    • Total posts: 180
    bb1, post: 262423, member: 53375 wrote:
    Did you realise that there are less letters in No then Yes.

    As a professional writer, I can get on board with fewer keystrokes. Thanks [USER=53375]@bb1[/USER] – I practice it in other areas, why not this?

    #1217587
    bb1
    Participant
    • Total posts: 4,485
    Tom ISW, post: 262424, member: 54379 wrote:
    As a professional writer, I can get on board with fewer keystrokes. Thanks [USER=53375]@bb1[/USER] – I practice it in other areas, why not this?

    Plus sometimes if it’s written, and it’s something I would feel uncomfortable saying, my book keeper sends out the reminders. Note that I don’t employ a book keeper, but gee she writes very compelling emails, and I get to choose her name to put on the bottom of the email.

    #1217588
    elissa.doxey
    Member
    • Total posts: 145

    Hi Tom,

    Creatives seem to find this more difficult (although I’m not sure it’s more prevalent).

    After being mucked around as a graphic designer for years, my cousin has very well-defined terms for payment – she especially applies it to friends & family – no excuses! It works for her, and lets her concentrate on the stuff that she’s actually good at. She withholds transfer of the final artwork until payment has been received (not just sent, but sitting there in her bank account).

    It also makes the client realise that you value your work, too.

    I completely second Bert’s use of a “book-keeper”. What about naming him Boris?

    #1217589
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,175

    This is the preamble, I use before my “official trading terms”

    Being Paid For Our Work Is Like Food For Our Business
    In order to remain in business, we need to be paid for the work we do. Like any business, we have come across some customers who have not paid us on time and this negatively affects the sustainability of our business.

    We want to continue to provide excellent commercial cleaning services to Gold Coast business so we have to do what is prudent in today’s business world.

    We Offer You Credit And We Ask You For Prompt Payment When Your Invoice Falls Due
    We pride ourselves on being the little commercial cleaning company that can offer you the same trading terms that the big companies do – especially our flexible billing arrangements that range from just a few days to a monthly billing cycle.

    When we start new jobs, we enter into a compact of sorts – you trust us to provide you with great commercial cleaning and we trust you to pay on time so our business stays sustainable.

    We have so many great customers and we are so often fans of their work.

    We want to work for you too if you share our commitment of providing great service to you in return for prompt payment of our invoices.

    Following up persistently however is what has the biggest positive impact. And being upfront about payment expectations at multiple points of the buying cycle too.

    Boris has a definite ring to it though I must say [USER=53375]@bb1[/USER] and [USER=88225]@elissa.doxey[/USER]

    #1217590
    Tact
    Member
    • Total posts: 71

    I’ve had a bit of luck putting repeat offenders on direct debit agreements. Saves the awkward “where’s my money” conversation and it’s worth the saved time.

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