Donco

I was talking to a friend who works in another industry, and he is also having a hard time collecting payment from customers. I believe the economy is affecting a lot of small businesses who survive on a monthly cash flow. We are finding ourselves in a tough position of landing new work and also protecting our company by ensuring our clients can pay on time. That being said, I would always protect yourself or company and require a 50% deposit with a signed contract or PO. A deposit isn't always possible when working on a National account or vendor who keeps promising you more work in the future. I know the Project manager I am working with on a nat’l acct would pay us if they could, but it seems their Corp office is holding back payment. They have more work coming up that we want and the PM wants us to do for them, but not if we have to keep sending emails or making phone calls for payment. The first thing that crosses my mind when we don’t receive payment is did we do a good job and complete the work 100%. And my first phone call to inquire about payment always starts by me asking “is everything ok with the job?” The hard part is sending out the email telling a person/company you like working with that you will not do anymore work for them because of their late payments.

Recently, we’ve noticed that some of our customers aren't paying our invoices per the agreed terms (30 or 45 days). I believe some of this is due to the current economy. One customer told me they couldn’t pay us per their own terms. “I will see what I can do to maybe push it to 45 days (what our PO says), but to tell you the truth they have been paying about 65 days….” We are willing to work with our clients as long we agree to the terms prior to starting the work. Any one else experiencing the same late payment issue? What payment terms does your company agree to?