Chasing Debts Owed By Clients

CANZON

Quick question here...

I'm a photographer, and some of my clients I have repeat business with. I invoice clients and all invoices state that I expect payment within 30 days of issuing the invoice. Yet, I still have clients who pay late.

Talking to other photographers, this seems to be pretty standard.

And quite a number of photographers are reluctant to chase these debts, since repeat clients can form a significant part of our business - the idea being, we can't afford to lose the clients by chasing after them to pay up on time.

So far, I've taken that as a cue and have treaded a little softly in chasing up being paid on time.

But I'm not convinced that chasing swift payment after goods have been delivered will lose me my customers. My work is high quality, but there is a lot of competition in the business, and my clients don't necessarily have a photographer's eye for pictures...

I mostly just dislike spending time sending reminders, when I could spend that time on growing the business in other ways.

Can any small business owners advise me here?

Has chasing up late payment lost you customers?

How does chasing up late payment affect the relationships you can build with repeat clients?

Many thanks for your input here, appreciated.

paddyrg

You could offer a 5% discount for upfront payment?

CANZON

paddyrg wrote: »

You could offer a 5% discount for upfront payment?

Good idea, and worth considering.

A lot of my work is B2B - do you think that would affect the pull of this at all?


Just wondering whether being soft on late payment really is the best way to keep customers, or whether it gives the impression that you're not so professional?

I don't want to drive my repeat customers away, and I want good relationships with them - I just can't help thinking not having to chase them down for late payment would be better for that.

But my colleagues all seem to sit around and wait for their clients to pay late, even by 3-6 months...

bengalknights

You will find most businesses pay end of month and not date of invoice as its lets admin work involved to make one payment a month etc other than that a quick phone call just requesting a payment date of invoices and whether invoices have been received should be done, this way not only do you know that your invoice has been processed but you can also figure out whether the client will pay.

paddyrg

B2B - don't worry too much about holding businesses to your terms (but do it nicely with a statement/reminder). Some places have policies of paying 90-105 days after invoice, some of discounting your invoice automatically by 3% in order for them to pay within 30 days, some of not paying until chased by a statement, etc. There's no honour in suffering.

If you can get 95% before the job, take it and it'll be worth it to save the grief of late & non-paying clients. 5% is enough to make prepayment worthwhile in many cases, especially repeat customers. You could even offer to make it 10% for repeat B2B customers. The value of cash in the bank is huge to small businesses.

tco03

i feel your pain lol

My main culprits are also my best customers though and you have to complain as nicely as possible.

Obviously dont let anyone take the mickey and run up a large tab

I find its best if you get on first name terms with whoever deals with the accounts and get to know them better, that way when you put your reminder call in they are more likely to act upon it.

Im currently chasing up all my overdue money before xmas break and i have 1 left thats being a pain

CKhalvashi

tco03 wrote: »

i feel your pain lol

My main culprits are also my best customers though and you have to complain as nicely as possible.

Obviously dont let anyone take the mickey and run up a large tab

I find its best if you get on first name terms with whoever deals with the accounts and get to know them better, that way when you put your reminder call in they are more likely to act upon it.

Im currently chasing up all my overdue money before xmas break and i have 1 left thats being a pain

Most of ours is %age work, which means I always seem to owe several others money for each contract (!)

Our Private work policy (however refusing to do any as we’re so busy) is 50% on booking, 50% on the day, or full amount if under £1000, if this helps. We’re legally b2b for private work, then b2c for corporate work.

CANZON

Great, just got a letter today from the accounts dept of one company, saying they won't pay any invoice unless it includes an purchase order number.

I didn't get one and am chasing it down now.

But they've sat on my invoice for 6 weeks before contacting me about it...

patman99

Then when they finally give you a P/O number, send them the invoice again and add 2 months interest at the maximum allowable % rate.
The trouble with big businesses is that they like to mess small businesses around by not paying them on time because the little guy is to soft.
Toughen-up and send them a final demand. Point-out that YOU require payment within YOUR terms, not theirs.
If you are in the sort of industry where you know most of your competitors, then there is no reason why you can't all share-round a list of bad payers. When they find that no-one will quote for the work, they will soon learn.

moneypooh

Never be afraid to chase payment and chase it hard. You have completed the work and should expect them to do theirs by paying on your terms. I always send reminders before the invoice is due, and then weekly repeating terms and putting companies 'on stop' to get invoices paid if they persist. At 60 days they get a solicitors letter, and this works well .
We still get the business as we supply high quality goods at the best price, our customers want this so they pay, and re-order.
There is no such thing as a good debt, poor payers need to be sorted. I appreciate your position, but having been there many years ago, being bold is far more respected than being pushed around.

CANZON

Thanks guys. As I was considering using the threat of late-payment charges and interest to motivate them to pay up prior to this letter, I think now I'll be chasing them on it.

They've left sending the letter until after my 30 days for payment ran out. They had my email account for quicker correspondence (especially given the timing) but chose to use a letter. And I had an agreement with their staff for this work.

If they have certain rules about purchase order numbers being needed for services purchased, they should really make sure their staff know this. It isn't my fault if they haven't worked with their non-accounts departments to make that standard. I don't see why they think they can penalise me financially for what is a flaw in their business, not mine. That's just stupid.