Cash flow issues....the self employed will understand

[P&R Fan]

I have been self employed for over 29 years. Started my company as a Contract Security company in 1985 and became a Private Investigator in 1995. The nice thing about the PI side is I don't take on new clients without getting a retainer up front, so money is never an issue. On the Security side it is frustrating. I have several Security clients. I have local ones who I will bill and can expect a check in a week or two. I also have several clients that are national multi-billion dollar companies. I will bill them, with the understanding payment will be received in 30 days as agreed to. Nope. They send a check when they darn well want to. 60 days is not uncommon.
I emailed a company today who is overdue, with a pretty big balance. The Woman in town who handles the bill payments said she was tired of me "harassing" her. My emails were very polite. I merely inquired as to when payments would be made.
I have heard stress is a killer. I have proof that's not true.....I have a pulse.
Jim

 

[SC_Mike]

IMO, the ones who are behind send them a registered letter telling them they have 15 days to get current or you will begin charging them interest on the outstanding balances and or turn them over to a collection agency.

Like I told one of my clients, I'm a small business not a bank. I cannot afford to finance your projects for you.

Good luck.

 

[arjay]

I used to replace those kind of clients with fast payers as soon as I could [emoji57]

 

[the ringo kid]

I feelyour pain.I have something akin to this--trying to find some computer wiz to post some things I have for sale--on places like: facebook and craigs list--and im hitting nothing but walls. I stand to make near three K when this stuff sells?

 

[vigil617]

I feel your pain, Jim, and I'm sure it's not helpful for me to point out that what you're experiencing is the part of the flip side of the "joy" of being a small business.

It's a risk to do business with anybody, plain and simple. Most of the time, the risk is justified. Sometimes, the risk rears its ugly mug and take a big ol' bite out of the you-know-what.

I just hope those delinquent accounts will still keep sending checks now and then, or that you'll decide not to do any more work for them 'til they do. Of course, then they can decide to get someone else and, in the meantime, move you even farther down the list of to-be-paids.

Comes with the territory, buddy. And count on the fact that at some point, if not already, instead of a nice slim envelope with a check in it from a delinquent account, you'll instead get a nice fat envelope from a law office announcing that your client has filed for bankruptcy, and as an unsecured creditor, you are welcome to get in line for a portion of whatever's left after the big boys get paid.

That's always a nice day at the office, there.

(What really stings in that case, though, is to get yet another mailing later from that same firm, noting that you had been paid a previous balance by the now-bankrupt outfit, but that payment has been deemed a "preferential payment" under the Bankruptcy Code, and therefore you have to pay it back because, well, you really weren't entitled to receive it in the first place. That's a real "owie" too!)

Bottom line, time to buy another beer to cry into....

 

[finesse_r]

The problem with big clients who give your repeat business is that you need them a lot more than they need you and they know it. So they pay when it is convent for them, which is usually monthly, but not always.

I had a small business for a couple of decades and I had several large national clients that provided repeat business, business necessary to the continued prosperity of my company. They were often slow to play and back then interest rates were pretty high. I kept up with it, but I was very careful not to overdo my collection activities. They did always pay even if it took 60 or at times 90 days. Like you payment from my small non-repeat business was collected up front.

Cash flow is always a problem for business, especially a small business, but my suggestion is to relax a little and keep your large repeat clients. They are very difficult to replace, and no flow is a lot worse than slow flow. As soon as you can get your business to a point where you have plenty of operating capital and the slow pay is just a minor incontinence.

 

[Snapping Twig]

Same story here. Biggest companies were the worst abusers. Even got the 'stop harassing us' line a few times. 120days out on a 30 day invoice and they cop an attitude?!

These days I am in a business where there is NO invoicing, strictly COD.

This is not by accident.

I repair equipment and numerous large companies want to use my services, but when we get to the COD part, they sputter and demand invoicing.

I politely decline, wish them well and don't miss their business.

 

[GatorFarmer]

I feelyour pain.I have something akin to this--trying to find some computer wiz to post some things I have for sale--on places like: facebook and craigs list--and im hitting nothing but walls. I stand to make near three K when this stuff sells?

Send me a PM, maybe I can help you do your craigslist ads.

 

[old bear]

The Woman in town who handles the bill payments said she was tired of me "harassing" her.

Jim, I hope you explained to her, that if she paid her bills on time you would not have to resort to polite reminders that she is a deadbeat *******. At least the company she works for is.

 

[P&R Fan]

Jim, I hope you explained to her, that if she paid her bills on time you would not have to resort to polite reminders that she is a deadbeat *******. At least the company she works for is.

Doesn't do any good. She is, lets just say, a bad word I can't use in polite company.
Jim

 

[old bear]

Jim, three words. Escalate to corporate.

 

[keith44spl]

I feel ur pain....
We've had accounts over the years, that Net-30 didn't mean a thing to 'em.

Not a gig, but colt industries was one of the worst.....90 days most times.

Got an account running right now, that want snow day forgiveness for being late in remittances



.

 

[Long Barrel]

Larger corporations.

.......tend to do this, especially when times are tight.It's called "cash flow management". Check your contract or PO. Stated terms are probably net 60, which means that they will try for 90 days.

If you can, raise your rates to cover this cost of business.

In my experience, the bigger the customer, the longer they take.

 

[wundudnee]

My Dad graded, seeded and landscaped new home yards. He always said that million dollar house owners wanted to be billed and were slow to pay. He said that a lot of times the little guys were standing on the curb with their checkbooks ready to pay when he was loading his tractors.

 

[labworm]

My Dad graded, seeded and landscaped new home yards. He always said that million dollar house owners wanted to be billed and were slow to pay. He said that a lot of times the little guys were standing on the curb with their checkbooks ready to pay when he was loading his tractors.

And that's the truth, wherever you live.

 

[ChattanoogaPhil]

Collection and customer retention is always a balancing act until it isn't.

 

[pawngal]

My Dad graded, seeded and landscaped new home yards. He always said that million dollar house owners wanted to be billed and were slow to pay. He said that a lot of times the little guys were standing on the curb with their checkbooks ready to pay when he was loading his tractors.

I hear that all the time from various contractors here too.
I'm the little guy that pays when they are done.
The owners of the $1+ million dollar lakefront homes take months to pay up and yet want the work done yesterday because they are wealthy.

 

[Marine Corps Air]

Jim,

Professionally, I have had many similar experiences. Other than threatening to blow their knee caps off with .45 ACP rounds, I have always looked for leverage or influence within the company to decide on my collection strategy. I am sure that you already know that their company plays the same "game" with companies or entities that owe them money.

If they are a large company, the services that you provide are probably not for anyone in the accounting or finance department. I always look for my "leverage" or power.

1. Do you have a written contract, agreement, or engagement letter with the customer that contains the payment terms and conditions? I always do. However, using the services of a collections agency is my last option. That will probably end any future business relationships.

2. Can you ask to speak with her manager or supervisor or the finance manager, controller, etc.? You've tried "X times to work with her and it's not been successful. She may not provide that information but your security customer will. Your customer also may not be aware of the fact that Accounts Payable is attempting to play "hard ball" with you for your payments.

3. Can you contact the person within the company for whom you provide your professional services and ask them to intervene internally on your behalf?

4. Is temporarily suspending your services until you have been paid an option?

5. Once you finally collect all that you are presently owed, should your written payment terms be changed accordingly? If they are a medium-large company they can afford to pay a retainer up front before you begin to provide your services.

 

[P&R Fan]

Bill,
Yes, I have talked to her supervisors, and they sympathize, but can't do anything. The problem is the accounting office is in another state, Georgia, I think, so they are beyond my reach except through email. This is one of my largest clients, so I don't want to rock any boats.
I have another multi-billion dollar client that is a very small account. I only bill them about $130 a month. They are always about 2 or 3 months behind. The Woman in the local office gets really ticked about that, and she will call me and fall all over herself apologizing. I told her I don't care. For such a small amount, I ain't gonna worry about it.
Seems the only real problems are these huge companies who have gobs of money.
Jim

 

[Rustyt1953]

Repairs were my biggest headache. I would pay for materials and have hours/months of labor(depending on amount of damage) invested in the item. I would call the customer to let them know it was finished and how much it cost. Most times I would get the "I don't have the money right now." I had an "after 90 days, the item would be sold for cost of repairs." policy.


Out of fairness, I would wait longer. This would put me deeper in the hole and if I eventually sold the item, I opened myself up to threats both physical and legal.

Not all musicians operate this way but there were enough to make my life stressful.