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Guest Just My Type

Advice Needed on Client Payment

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Guest Just My Type

Hi, everyone. I have a question to see how you all would handle this scenario:

 

I have a long-term client who was my very first client when I started 4 years ago. We have a wonderful relationship and he is a very good client. There is one problem, though - he is slow pay. I invoice him every two weeks and he takes 3 - 4 weeks to pay and I end up reminding him once or twice.

 

I now have a retainer program after checking a bunch of your wonderful websites out. I am going to try to phase him into one of my retainer plans. Do you think this will eliminate the problem? Are there any other suggestions?

 

Thank you!

 

Leslie

www.justmytype-kc.com

 

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My opinion... late payers are part of running a business. Everyone I know has at least one. I've managed to cut that down by getting them to authorize me to bill their card on the first of the month :) I use QuickBooks Merchant Services - LOVE it. So much less work for me!

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Guest The Edge VA

I have a new client who paid me through PayPal right away after we spoke on the phone in her initial consultation. I hadn't even invoiced her yet! Then at the end of her retainer (15th June) I invoiced her and expected another PayPal payment. Nothing came through, I tried emailing her and heard nothing either. [i recently handed one of my clients over to collections for non-payment so this is currently a sore topic for me and I am very, very careful now.]

 

I finally heard from her on Friday last week (22nd) to tell me she had sent a check and she then gave me a long list of tasks. I wrote back and told her that I wished to clarify my payment terms which are due on invoice. Checks, (by prior arrangement), need to reach me within 5 working days of invoice. I would be very happy to carry on with her projects and start working on her list just as soon as her payment arrived. Today is the 28th and I still haven't received the check, so I haven't started on her work.

 

The way I see it is this, I will accept the risk of 5 days of working without payment if the client wants to send a check (+ the time it takes for the check to clear), and 5 business days is a reasonable amount of time for a check to reach me from anywhere in this country. After that I stop working until payment arrives, this affects the client directly and I am hoping that it will ensure timely payment. I was upfront and very clear with her when I explained that I hold these hours for her and may have to turn others away, so if her payment doesn't reach me in time, she may lose her slot.

 

Maybe I am too harsh?

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Guest

I had the same issues with a client, (that I eventually let go). I did about 3-4 PowerPoint projects for her,over about a 2 month period. I even came to her office for a full day to work together, all before being paid a dime. I kept emailing her about it, then she balked at the bill and wanted some sort of discount. Boy, did I learn the hard way. I eventually got paid...and with a big chip on her shoulder.

 

Once I realized she had no respect for me or my business, I let her go. So, Ros, NO! You're not being too harsh, you're too good to put up with that!

 

I like Candy's idea about getting the person on retainer, and having the money be paid upfront. Having been with them for 4 years, they must be happy with you, so I would give it a try.

 

Good Luck~

 

Laura

Edited by dreamhomeva

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Guest Just My Type

I see that so many of you have retainer plans and that seems such a good way to go. Is SOP to have a signed contract and receive payment at the point after a verbal agreement?

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Guest The Edge VA

I can't speak for how everyone else does it. But I send an invoice for the first month's retainer with the contract. When payment is made and the contract is signed and returned then the 10/20/30 hours begin. 30 days later (my retainers don't all run on a calendar month) they receive an invoice for the following month and so on.

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Guest Just My Type

And then do you just bill hourly for any hours over the retainer that you've worked?

 

I can't speak for how everyone else does it. But I send an invoice for the first month's retainer with the contract. When payment is made and the contract is signed and returned then the 10/20/30 hours begin. 30 days later (my retainers don't all run on a calendar month) they receive an invoice for the following month and so on.

 

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Guest The Edge VA

Yes. Let's say that in January my 10 hour retainer client paid up front and we began working, by the end of January she has used 12 hours. When I invoice her for February's retainer I add 2 hours overage for January to the invoice.

 

What I have been doing is just billing them the same retainer hourly rate for over time, but I know that most others bill their hourly rate for overage. I have sent out notice to my clients and this change will take effect in August. (I could slap myself for not doing this sooner.)

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Hi Leslie,

 

You've received some great advice on retainer plans. Hopefully your client will be receptive to this idea! :)

 

I work mostly with project clients, so I start all my new clients with a one-month trial, and I charge a deposit up front. The client's initial hours are applied toward the deposit, and after that I bill on a weekly basis for the prior week's hours. If the client has a large project that needs to be done in a short amount of time, I have the option of charging a 50% deposit based on the project estimate.

 

This probably won't work with your current client, but you might consider doing something like this for new project clients.

 

Hope this helps! :)

 

Angela

 

 

 

 

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As I've said on here before... I know I only cut checks once a week or once every other week. I don't whip out a check each time an invoice comes in (geez, I'd go NUTS). So, if you only allow 5 days (enough time for them write the check and mail it) that's a little difficult, right? I mean, if you send the bill on Monday, they cut checks on Friday... you see where I'm going right?

 

The bottom line is that it depends on what YOU want to do. I don't really worry about it until we reach 30-45 days. -- BUT I pay my subs within 1-15 days, as a rule.

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Guest The Edge VA

I know it's inconvenient -- I still worry about it -- but I feel like it has to be done.

 

With clients I have worked with for a while I am more relaxed about it, some still only pay 10-15 days later and one often goes over 30 days on payment for her projects, but I have worked with them for a while, the trust is there and I am not so worried about it, (even though I really would prefer to be paid sooner).

 

The way I see it, it's one check every thirty days. My client knows that it is coming, I update her on her hours right through the month and it was in the contract that she signed and agreed to at the beginning.

Edited by The Edge VA

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You are absolutely right, Ros... and you have to remember too that I cut a lot of my own checks for the client to sign *laugh* so I know "Oh, I'll pay myself next week since they don't have anything else to go out". For those that still handwrite checks, I guess I have just become more relaxed as time goes by. I'm not really aggressive with it, but I'm pretty picky about who I work with in general anymore, so... perhaps I've weeded out the really bad payers, eh? ;)

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What I have been doing is just billing them the same retainer hourly rate for over time, but I know that most others bill their hourly rate for overage.

 

I have to say that I can't see the point in doing this. In my opinion you want to encourage overages, not discourage them so that a 10 hour client eventually becomes a 15 hour client. If I am being charged a higher hourly rate because I went over, I'd be sure not to go over next month.

 

I'm really careful with making sure my clients know how many hours we've used and on what and how much time is left in the month.

 

As for the original question, I too have a client that continually pays late. He's a sweetheart and I wouldn't dump him for anything. He pays, but there's always a drama behind it being late.

 

I realized recently that for all future clients (at least until I'm full enough to pay my bills) I am putting them on an automatic payment system sort of like Candy said. I have bills to pay and I need to know I have X amount of dollars coming in and when.

 

 

 

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What I have been doing is just billing them the same retainer hourly rate for over time, but I know that most others bill their hourly rate for overage.[/quote]

I have to say that I can't see the point in doing this. In my opinion you want to encourage overages, not discourage them so that a 10 hour client eventually becomes a 15 hour client. If I am being charged a higher hourly rate because I went over, I'd be sure not to go over next month.

 

I was wondering the same thing when I saw a previous post about charging their full rate. Can someone explain their thoughts about charging their full rate after the retainer hours have been used?

 

Thanks,

Judy

 

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Switching your client to a retainer may not eliminate the problem. Just make it clear to him that no work will be completed until you receive your retainer. I have had clients send me work and the work just sat in a file until the checked was received. Believe me...when they are in a hurry to receive work, they will be in a hurry to send a payment. Maybe the problem is that he just is not a check writing person...suggest PayPal to him.

 

Good luck!!

 

Kim

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