One of the
best pieces of advice I’ve heard since going into business for myself came from
my friend John, who has many years of experience as a consultant. John always
said that it’s critically important for an individual or a business to send a
bill promptly once some work has been done for the customer or client.
“If you
don’t bill your clients promptly,” John said, “they may begin to wonder if
you’re taking care of your own business. And if you’re not taking care of your
own business, they may begin to wonder if you can take care of theirs.”
John taught
me something else as well: The importance of determining a client’s payment
cycle. If he was hired by a company for a job that would last for some time, he
made certain that he would be paid monthly, but he went beyond that. He’d
always ask the client two questions before starting a job: When do you do your
first check-writing each month, and when do I have to get an invoice to you to
get paid on that check-writing date?
Fast Pay Makes Fast Friends
Having that
discussion with a client up front does two things. It establishes an
expectation of prompt payment, and it tells you, as the business person, when
it’s time to inquire about a check that hasn’t come.
Over the
years I’ve worked as a freelance consultant for a number of large concerns,
including Wells Fargo Bank, The Home Depot, and Santa Clara University. All
three, and in fact, the majority of my clients, have paid promptly, which is
greatly appreciated. One local client, lesser known than the three I just
mentioned once told me that their philosophy was “Fast Pay Makes Fast Friends.”
It goes almost without saying that if I got back to the office and found three
messages waiting, that client’s was the first I responded to.
Sometimes a
client is late paying for a reason. A nonprofit group once hired me to do some
work under a state grant it had been approved to receive in July. I began work
in June, but that year the California Legislature didn’t pass a budget until
September, more than two months late, which meant my client and I didn’t get
paid until October. But it was a big check when it came, the client kept me in
the loop about what was going on, and I could understand the predicament.
Slow Pay or No Pay
Far less
understandable was a good-sized company I worked for on a project quite a few
years ago. It had received a number of awards for business excellence, but
apparently their concept of business excellence didn’t include paying on time.
It routinely took them 60 to 90 days to pay an invoice, and when they were
asked about it, the answer was, in essence, “That’s how we do things.” I got
out of that job as soon as I could.
Still,
that’s better than not being paid at all, which comes with the territory when
you’re on your own. I’ve been very fortunate; in more than 20 years only one
client has stiffed me, and that for less than $300. Most people in business
that long have had to eat several thousand dollars at least once.
If you’re
in an invoice business, as opposed to a cash business, it is a certainty that
there will be times when the mail carrier becomes the most important person in
your life. We’re the ones who will really feel the end of Saturday mail
service, during those not infrequent times when the check is in the mail.
