Hi,

I was wondering how much time you should give a client to pay for work done? I see a lot of people give 30 days but since everything is done online, shouldn't it be a little sooner than that? I am going to make sure every client sends an approval via email when the work is done but I want to include on my website that payment should be made either immediately after approval or 7 days, 14 days, etc... Help!

Trish

I expect payment more quickly as well but I don't charge fees or start sending demanding letters until after 30 days. This thread has a lot of info about late payment policies.

Can I just say how impressed I am with myself right now for properly linking to that old thread??? Cool!

I put on the invoice that payment is "due upon receipt", then I'll send a reminder statement after the first or 2nd week. I don't charge late fees until after 30 days. Luckily most of my clients pay immediately. I have one that always slow pays and I usually have to charge him a late fee, but he always pays eventually. Since I know this about him I make him pay a deposit every time, usually I only charge a deposit for new clients.

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Rebecka Melson ~ Virtual Business Services

Originally Posted by SupportMyOffice

Can I just say how impressed I am with myself right now for properly linking to that old thread??? Cool!

I'm impressed too After my own heart...

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To answer the original question - you have to decide what works for you as a small business - how long can you wait for payment before your overhead and operating costs start to become a burden.
And, less scientific but still important to consider is: how long can you wait for payment before you start getting nervous or anxious about the funds.

I originally billed my clients on net 5 (gave them five days to pay - invoices going out every two weeks) until one of them asked if we could arrange an extended term.
She'd been in business a LOT longer than I had so I asked her what was customary and she said either net 14 or net 30 (big corporations operate on net 60 or 90!). I opted for net 14 and have stuck with it ever since because it provides a nice regular flow of income, doesn't stress my clients out, and I don't ever feel like I'm 'waiting' to be compensated.

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That's great advice Tess! Thanks so much, it helps a lot!

Hey Trish,

I agree with what Tess said. It's mostly what you can handle. At the same time, it may also depend on who you work with. If you are working with a corporate company, they may have a standard waiting period for invoices because they have to process them. For a sole proprietor, it's a little easier to send it earlier.

I work with Coaches who all work from home or a small office that's just them. They sign a contract with me that states they will make payment within 5 days or I may hold their work. After 10 days, I may hold work and they will be charged a late fee. After 30 days, I definitely hold work and they still owe that late fee. That's when I send the first snail mail reminder that is registered mail.

It's a tight plan, but it keeps people paying me within 14 days, which is when (for MY budget) I need to get paid. I use Freshbooks (http://www.freshbooks.com) for invoicing and I can have 3 reminder e-mails go out after my invoice. I take FULL advantage of that!

Create a great day!
Kristen

I guess you really need to have a policy in place and make sure your clients understand that policy and be firm at keeping that policy. I understand there will be exceptions when it comes to larger companies, I used to work for a large company in Toronto and payments always had to be processed through another department before the invoices got paid. Thanks for the link to Freshbooks! I'll definitely use it!

My terms (net 14) and late payment policy are on *every* invoice I send out. So there's never any question

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How many demand letters would be appropriate. One maybe a week after payment is due or two, the first being two weeks after the payment is due and the second 30 days after payment is due?