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Getting Paid On Time

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by kmclaurin

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I'm a project manager for a small consulting firm in the Midwest. Our biggest challenge is getting paid for services rendered on a timely basis. It seems most of our clients have a history of paying us 60 to 90 days after being invoiced. We always get paid but rarely on time.

We want to improve our receivables but do not want to strain the relationships we have with our customers. Any ideas?

7 replies

by don christner

We offer a 1% discount if paid within 10 days of the invoice. Some companies will do anything to get a small discount, others wouldn't care if we gave them a 20% discount, they still would pay in 60 days. Those customers get to pay us up front or the price goes up in order to offset the dollars lost. The people that hire you are rarely involved in paying the bills, so there isn't a problem. I read an article that showed what an unpaid invoice is worth over time. It was something like, 80 cents on the dollar after 30 days, 60 cents after 60 days etc. There isn't a perfect answer to this type of problem.

Don

by kurtisaparks

Our company has had very good success by adopting a "before the time" approach. A follow-up call a week to ten days after the invoice has been mailed -- that has a sincerely helpful tone to it, "I'm calling to see if I can be of any help." -- that is conversational and, is full of questions. The longer you wait to make the follow-up call the more touchy the subject may be. And, call every client, every month, without fail...and you will also improve your customer relations.

"Good morning Susan, did you receive our invoice...is everything in order...is there anything else you will need to help in processing our invoice...we are trying to improve our business processes and reduce costs and my part of that is to see what our customers need to improve the payables cycle, does your company shoot for turning payables by the thirty day time window...is there anything we can do to help (mail direct to payables rather than general address, etc.)...I don't want to get in the way so, what kind of follow-up might be helpful?"

by bv2

I don't know if it is applicable in your case, but I had a store manager that sent out a letter to all of our customers explaining "corporate restructuring" and other buzz-phrases as the reason for our new 30 day policy, which could only be extendedfor those that would fill out an invasive financial disclosure form. Most customers didn't want us to know that much about their business, or simply did not want to fill out the form - problem solved.

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