another stupid story

[Stacey K]

I have a couple big places that are 30 days but they often pay CC if it's smaller. School prints checks on the 5th so if you get them an invoice on the 6th...you're waiting. They have made exceptions for me with very large orders and she cut me a check knowing I'm a small business.

Typically people are pretty good about paying me right away. I waited a month for a guy to pay me $400 cash. I had to keep reminding him to drop off my money. He finally paid Monday. That made me mad because I did my friend a favor by doing his boat and then the jack-wagon waits a month to pay me.

 

[Geneva Olson]

I have a couple big places that are 30 days but they often pay CC if it's smaller. School prints checks on the 5th so if you get them an invoice on the 6th...you're waiting. They have made exceptions for me with very large orders and she cut me a check knowing I'm a small business.

Typically people are pretty good about paying me right away. I waited a month for a guy to pay me $400 cash. I had to keep reminding him to drop off my money. He finally paid Monday. That made me mad because I did my friend a favor by doing his boat and then the jack-wagon waits a month to pay me.

that's another one. working for friends usually ends up with them thinking they don't need to pay you right away.

 

[Zendavor Signs]

Giving terms to customers will be necessary to play with the big kids. I do understand your frustration, and funding Accounts Receivable is no fun. You can play hardball on terms, but you will lose out on some bigger customers for sure. It sounds like you may want to talk to your banker (or get one if you don’t have one) to set up some financial foundations for your business. We have a line of credit for the primary purpose of funding large projects we know we either can’t or won’t get a deposit on, and final payment may be a little slow. My banker was really important those first few years for me to get on my feet financially. Get a credit application form (you can find them on the internet) for your customers to fill out so there is some formality to the process - setting up terms, who gets invoices, etc. It also makes you look less like a small business chump (I.e. one who gets paid last). It’s a fine balance between being accommodating on terms, but firm enough so you don’t get taken advantage of.

 

[Pauly]

why would you ever want to do business with them again if they didn't pay you the first time?

If someone pays late by accident for example, but they're a good customer, you may not want to stop dealing with them, but your contract with the insurer says otherwise.

 

[Pauly]

Is this just an Aussie/Euro thing? I've never heard of insurance for unpaid accounts. Does it get you paid in the event your customer files for bankruptcy too?
a local design agency that we did some projects for went out of business, I guess they still owe us money, but we will never see it.

not sure if its just aussie / euro. I would have thought its available in the US. Bankruptcy im not sure, im pretty sure that's totally different

 

[VizualVoice]

I am NOT a bank. If you're an established customer with a long-standing relation on good terms I will likely let you pay upon delivery, otherwise all jobs are invoiced as 50% deposit, balance due upon delivery. If you need terms, take if up with your credit card company and I'll eat the 3% fee for that, but I'm not in the business of financing you for 30 days. I have yet to ever lose a client once I explain it that way.

 

[nsm]

I have a big box customer. I do the graphics for an individual location. I've been doing graphics for them for several years now. SUDDENLY, they want to put me in their "vendor" system. I asked if they are a "net 30". Up until now, we have done all of their business with the GM's credit card. It wasnt an issue because it was under $5000. This new sale is under $5000 but suddenly they want me to get in their system. I was told that they can do a "net 10" but want a 2% discount. (I'm sorry, WHAT?)

So, my questions:
1 - does anyone here do net 30
2 - how hard is it to get your money?
3 - wtf kind of bs is getting a discount on money that was owed to you 10 days prior. to me that's late and there should be interested ADDED not taken away.
4 - do you increase the price to offset the net 30?

We do net 30. Pretty standard in most industries. Europe is often more like met 20. It can definitely be a struggle to pull in payments. Our invoicing system is automated and we do split orders/partial shipments and invoice for the items at the time they ship. So often secondary invoices get missed.

We also send out automated payment reminders. One a few days after original invoice to remind customer of net 2/10 discount, the another prior to due date and then begin to hammer them after they are past due.

Even with all that in place we are averaging about 60 orders and 50K past due at any given time.

We do net 2/10 discount which is what you were referring. It's an incentive to get customer that have terms to pay quicker.