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    What do you do about really slow-paying clients?


    I started working with the guy in November, and have yet to see my first payment. I know he's good for it because a mutual contact referred me. The first check was "lost in the mail" by the person who handles his payments; that was two weeks ago.
    I have just started out on my own, he knows that, and it's beginning to sour my view of him as a client.
    Any ideas for how to handle this without the whole thing going south?

    Thanks
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  3. B afraid.. B very afraid!
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    I have done and continue to do a lot of management consulting. I learned years ago that I take on no client until/unless they pay an up-front retainer. I then charge my time towards that retainer (by hours, days, or month). If the retainer reaches $0... I stop working. The client soon learns that they must keep a positive balance in the retainer account.

    Comments on this post

    • tstolber agrees : Great advice
    • joshz agrees : BINGO. 2 part process. Secure your paymends and weed out the BS customers who would never pay you anyways. Upfrotn or no work. Plain and simple.
    • realityhack agrees : Way to do it.
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    I had one client, who got the wrong account details, lost the check in the mail, then was in a motorcycle accident - then when I called looking for payment - I got the owner of the premises saying the guy owed over 100K and had done a runner - this was in fact the case!

    A customer who pays you nothing is not a customer - they only become a customer when they pay up.

    Stop working on this job or you may be asking the same question in 3 months time.
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    Take payments in advanced. I'll won't even log into an FTP or admin section without a payment.

    If you know him on a personal level, I would say "due to previous experiences I have a policy that dictates I hold all projects if payment is X days late. Once payment is received, work will continue as arranged."

    SEO_AM knows the game. I'm sure, like him, I've been burnt many times which is why I'm so firm on upfront payments.
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    always take some initial payment to start with. If the client is not paying despite reminders stop the work on his project and don't let him take you for granted.
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    November and no payment yet? When did you first invoice?

    Give the guy a very short deadline to make payment, or you will stop working. Say 5 days. Offer to take the funds by paypal or something instead of check so they feel like you are trying to work with them.

    If that fails, you need to look to what is possible in your country.
    I do remember someone I worked for going golfing with a client who owed money. Guy was talking up his company to all his friends when the person I worked for pipes up and says 'if bussiness is so good how come you can't get your staff to pay your 90 day past due bill for $28 (or whatever) with us?
    May have been their last golf trip but the check was delivered at 8am the next day.
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    Originally Posted by carltonrsmith
    I started working with the guy in November, and have yet to see my first payment. I know he's good for it because a mutual contact referred me. The first check was "lost in the mail" by the person who handles his payments; that was two weeks ago.
    I have just started out on my own, he knows that, and it's beginning to sour my view of him as a client.
    Any ideas for how to handle this without the whole thing going south?

    Thanks
    I run a medium sized enterprise that bills about 60/70% of clients in arrears. Our bad debts are tiny (less then O.001%). We have a very formalized collection process. Invoice, follow up phone call, statement, daily phone call and then threat of debt collection ( with 40% on the bill once this has happened). Rarely do we get to the last (debt collector). Daily phone calls do the job mostly for difficult payers. Difficult payers are then told all future services must be paid in advance. Credit is no longer offered. Our accounts manager get a bonus on % of outstanding bills collected in the one month time frame. She works hard now to achieve 100% which gives her biggest bonus.

    Start ringing him every day. Go around and collect the cheque personally. Then tell him no future credit will be given….

    Comments on this post

    • SEO_AM agrees : This works for collection of past due accounts.
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    Usually clients that come as "friends of friends" are the ones who have the guts to postpone payment, sometimes even skip. They often make appeals to your relationship and start to tell you the story of their lives: "I want someone to do SEO for my website, but I don't have money.." What you can do about slow-paying clients? The answer is easy: avoid them.

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