Late Paying Clients

implementing a early / late payment dicounts.

[dizzynutter]

Hi,

I do a lot of work for a regular client, but they never pay on time. On invoices I send out to clients it clearly states that all payments should be paid within 30 days of the invoice, which is more than fair. After countless reminder calls, emails and resending of invoices to the account dept and even the managing director I'm still waiting for payment nearly three months on from issuing the original invoice.

I don't want to lose this client but I’m really miffed, so I'm considering of implementing a discount / penalty system based on a percentage for early/on time or those late payers.

I'm sure I’m not the only one who has this problem so any suggestions would be great. Just for legal and contractual reference I'm a UK freelance web designer.

Thanks,
Greg

[sonjay]

I've got my own first-ever late-paying client to deal with. I've decided that any future work for him will require an upfront payment of my estimated cost to complete the project. No pay, no play.

And of course, no further work for him, period, until he pays what he already owes.

Fortunately, he's a small-time client with small-time projects, so if he objects to that new policy and walks it won't bother me. I'm not sure how I would handle it if he were one of my bigger clients. But, it seems that my bigger clients have a tendency to pay on time, anyway. It's the small-timers who seem to think that payment due-dates are suggestions only. If they run their business they way they pay their invoices, that's probably why they're still small-timers!

As for avoiding late payments in the first place, there are things you can do to discourage them: Be professional and timely in your invoicing, make it clear that you're a business and that you expect timely payment, penalties for late payments, etc. etc. But there's probably no magic bullet to ward them off altogether. Heck, even the IRS (our tax collection agency here in the US) gets late payments!

[etechsupport]

If that customer is regular irregular in payment,I think you should charge penalty for late payment, I found few companies charge 21% PA after due date for late payment. However you should mention it clearly in your TOS before charging penalty.

[mcjohnson]

I have a similar situation with a very oddball client (never should have taken the job to begin with) who paid me 50% upfront to get the work started, and then the excuses began (in addition to monumental scope creep) about the second half.

"things aren't going very well, my merchant gateway is killing me with fees, it's christmas, can I pay you $200 now and have you hold the check until Tuesday, etc."

THEN she emails today wondering if I will reconfigure her merchant gateway because she's switching credit card companies. So, I told her that I could not in good consciience do additional work for her and pile fees on top of fees that she herself has already indicated she can't pay. Born at night, yes...but not last night.

So I tolder her that with a certified check for the balance of her account and another certified check for $400 as a retainer for the future work, I would do it. Otherwise, I told her, no work will be done all your account is paid in full.

Then again, this is my nightmare client that I have a million funny-if-it-werent-so-sad stories about. She's actually a crazy person. I'm sure we all have one in the portfolio.

Good luck,