Big clients that don't pay on time?????

You are running a business not a charity correct?

Late fee/finance charges? Most definitely. You need the money to pay your vendor right? I’m sure they charge you a finance charge if you are late.


Hard as it might be, if they continue to COST you money, I would have a direct talk with them and tell them that they need to pay on time or term will change. 1/2 down and 1/2 upon completion. When you have the stuff they need and won’t give it to them until paid in full, that will bring action

You have made them a very important client. Unfortunately, they have not made you equally important

Are you dealing with one person for the order and then someone else for the payables?


If the problem persists, fire them. I’m sure they would do the same to you.

 

Yes you can figure in late fees. But maybe you should start raising your prices for them if you're going to be spending extra time collecting money.

 

Others are going to bash me for saying this but its worked for me for years. Email them and tell them you will be removing all signage if invoice is not paid. When you have these "large "companies" the issue you deal with is they dont care and its runs thru so many channels and so many people to get paid, its ridiculous. You mentioned they are large and you cant lose them....you need to move them to pay up front status and let them go. You will have more work to make up for them, trust me

 

The good thing about doing work for larger companies is that it is real work for purchasing to set you up as a vendor... Nobody wants to do more work than is necessary, so if the work you do for them keeps them happy, they have no reason or want to look around and have to reset up new vendors and deal with possible garbage product... Raise your prices to cover the wait time and become friendly with accounts payable...lol

 

I have large clients where I have to go through a website that produces an invoice and it takes up to 45 days for payment. I understand that it will take that long so I gear myself for it by not being strapped for cash.
Before they used the website they had problems in accounting like you are experiencing. Just make sure you produce invoices that do not produce confusion with PO numbers when it goes through the process. Keep up with emails to the person you submitted the bill to so they can help you if there is a delay. I have another large customer that pays out every 60 days. It feels like free money when I receive the check in the mail because I had forgotten about the job.
It's part of doing business with large corporations, making a threat that you will remove signage will just fall on deaf ears and make you look bad if it comes to that.

 

What is your process for getting paid? With a big company you want to go through the following process.

1) You create an estimate.
2) Your customer submits this to the purchasing department.
3) The purchasing department sends you a purchase order.
4) You release goods.

I'd bet that what's happening is they are starting the internal purchasing process AFTER they've received the goods. This adds anywhere from 10-45 days onto the process.

I also strongly recommend getting a direct line to someone in the billing department. So often you email invoices/info out and it doesn't get to the right person. Also when the person in the billing department gets to know you, they can start treating you better. It's hit or miss, but I've found a vast improvement on getting paper work done right when I communicate with a person in billing.

 

I started working with a very large construction company which I was very happy to work with. Then all the headaches started. First started with the huge insurance requirements (which I had them pay), then the huge contract that I had to fill out, safety requirements etc, notarizations. I do the job which they did give me a %50 deposit. 7 months after completion of the project I still haven't got the final payment. A couple weeks ago I had to send in another form they tell me because they had a check waiting for me. Filled it out and notarized it, mailed it back to them right away. Still nothing.....

 

As much as this is what we'd all love to do to slow paying clients, I hardly feel this will fly with a large museum client. Sure, being a slow payer is unprofessional, but threatening to act like a cowboy will get you fired real quick. I can't imagine anyone walking into a museum and ripping down signs without being arrested.

Great post. This is exactly what we do and for the most part it speeds up the process. Having to play by someone else's rules sucks sometimes when you own your own company but it's unfortunately that's just how it works if you want big clients.

 

Be careful what you sign. Usually the final step is the lien release and you really want to sign that at the same time you get handed a check. Otherwise, you pretty much have no easy recourse (construction lien) short of going to court. You not signing your lien release will hold up their money which will compel them to pay you.

 

There's a lot of good points here. However, the thing that has made the biggest improvements we've see for on-time payments is making it easy for them to pay. We send a link that they can pay online and it's almost always paid in a matter of days. There is a customer or two that pretends like they don't get the email and anytime we start throwing fees around they order more stuff. For everyone else, they typically pay before we can even start the job.

 

60% deposit and the balance due upon completion. Ask them to have their check ready when picking up or if you go install. don't hand it over until you get paid.

 

We have a large client that has net 60, but if they pay in 45, they get a 3% discount. Perhaps you can build your pricing so that you get 100% of your desired price in 45 (or 30), but get 103% after that. Perhaps a small discount will encourage them to pay sooner.

 

I have a few large customers like this.
No work gets started unless i receive a Purchase Order.
Invoices get sent to the person who placed the order AND directly to accounts payable.
Send your invoices as soon as you delivered installed your order minimizing delays.
Send account statements every month to accounts payable as well. (If you have a regular contact send it to them as well in cc).

Even after doing all that .... After 60 days i start sending payment inquiries.

Best of luck.

 

Only you can decide if it is worthwhile to keep the client, you said they always do pay in the end. We have a few construction companies we do work for that give themselves 60 days to pay, in reality they pay in 120 or more days, but they also don't balk at prices, so we are happy to keep them, we just know going into it that we won;t be getting paid for a while.

You can also try giving them a credit limit, say $10,000, once they owe you this much you can contact them and remind them they have reached their limit and you won;t be able to process new orders untill they settle up their account with you, I find it best to have someone else call and do the money talk, if the same person is selling the job as well as bugging them about money it may put them off.

 

Agree to all the tips on making sure invoices are detailed with correct PO number and contact person.
If they get seriously late I wait till they put an urgent order through then tell them to get their accounts team to contact me before we can process the order. That usually gets their attention.

 

We had a customer who owed us a large amount of money for a service call and they were over 120 days late. When their other printer went down and they were behind on production all of a sudden they had the funds to pay their bill. It's amazing how money can just materialize out of thin air when they are in a bind!

 

I'm still amazed how many small sign shops think it's their responsibility to be a bank and finance company as well as the sign maker. We have had a credit card or check to proceed policy for 10 yrs. Our business has continued to grow dramatically year after year. This policy has led to lower overhead and more aggressive upfront pricing which our customers love. The internet ordering mentality has really helped customers accept this as the normal way to place an order.

 

Bingo! That and being able to use a credit card puts some "dispute" power in their hands... so none of this "What if you don't deliver the goods" mentality.

 

just make a better relationship with the Accounts Payable person, ask them what the correct way to submit an invoice is, be friendly.

you can't lose a whale over this, if it's truly a whale, they are worth the wait

price in the wait time accordingly and forget about it, it 's money in the bank with just a little added wait.