Enterprising Women Vol 10, No 2, 2009

B Y N I NA L . KAU FMAN I n today’s turbulent economy, a slow- paying client can generate more anxiety and frustration for your company than a no-paying client. At least with a no-pay, you know what you need to do (sue) and the steps you need to take. Not that you look forward to it, of course, but at least you know—and that certainly can bring some relief. A slow-paying client is like a fickle lover: first prepared to abide by his (or her) com- mitments to you; then dashing your hopes by standing you up for your romantic ren- dezvous. Did you do something to upset him? Does he want to see you again? Does he intend to leave you? When he needed you, he called every day; now that you need him for something, he can’t be reached. You want to believe the excuses he gives you, but should you? Because we don’t know (and he’s certainly not being communica- tive), we can be thrown into a state of panic from the uncertainty. Steps to Minimizing Your Slow-Paying Client List Thankfully, clients differ from lovers in one significant way: you can put your foot down and set your ground rules for working with you from the outset. By fol- lowing these seven preventive steps, you can minimize the receivables from slow- payers: 1. START WITH A WRITTEN AGREEMENT Have a written contract with your cli- ents that spells out what you will do for them, how much you expect to get paid, and when. Include a “stop work” clause if you provide services or ship products on an ongoing basis. Better yet, include penalties for lateness. Your clients should know up front that you will charge inter- est and/or late fees if they don’t pay on time. Yes, times are tough, but it’s not your responsibility to provide them with interest-free loans. 2. SEND INVOICES RIGHT AWAY Invoices get paid more timely when the value of the work you’ve done is fresh in your client’s mind. Not six months later when you’re a distant memory. In some situations, you may want to send your invoice at the beginning of the month (in advance of providing services), rather than after you’ve done the work or shipped the product. 3. IMPLEMENT AN “UPCOMING REMINDER” SYSTEM Companies used to follow up with cli- ents at 30 days, 60 days, and 90 days. In this economy, don’t wait. You can call or send a friendly reminder at Day 15, thanking them for their business and checking on their satisfaction with your product or service. Ask if you can expect payment by the due date. Let them know you’ll be in touch if you haven’t heard from them on Day 30 – and don’t just say it. Do it. 4. TACKLE RECEIVABLES IMMEDI- ATELY ONCE THE DEADLINE HAS PASSED Once clients have passed your dead- line without payment, give them a call within 48 hours to one week. The more (and sooner) you’re in front of clients to get paid, the less they can ignore you. 5. ENLIST HELP FROM OTHERS Paradoxically, money can be one of the most uncomfortable subjects for entre- preneurs (especially women business owners) to discuss with their clients. If this is not your strong suit, have an assis- tant or other friend/relative who can act in a professional manner make the calls for you. With greater emotional distance, they will have greater ease confronting this potentially awkward situation. Legal 50 enterprising Women 7

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