Getting Paid
What are your options when someone’s not paying what they owe you?
This can be a huge problem, especially for growing businesses with big corporate clients who pay via invoicing.
You might get excited about onboarding new big companies
But the big hidden problem with big companies is that they’re sometimes super slow at paying big bills.
Why?
Because they can be;
Because what are you going to do? Not work with them?
If this is a problem you’re going through, here are some options:
Payment Terms: Before you sign a contract with these guys, push hard on earlier payment terms. Upfront payment is the least risky for you. Many big companies won’t want to budge on this - you can try a discount for early payment instead.
Leverage: Scope your project and deliverables to leave you with some leverage at the end. Meaning, you retain something valuable to them until final payment, or leave yourself the ability to end their access to it if they don't pay on time.
Be Persistent: Once a bill is due, send regular reminders for any bills coming due or late. Squeaky wheels tend to get the grease here.
Credit Lines/Invoice Factoring: If accepting late payments is just part of doing business for you, it might be a good idea to start looking for credit lines from banks. So long as you are 100% sure your clients pay eventually, this can be a great option for increasing your cash cushion to support a longer wait period.
No matter what you do, don’t ignore this issue and grow without a plan!
Otherwise, you might be growing into bankruptcy.
Enjoyed reading this article? Subscribe to receive more via email here.
Know a Founder or Entrepreneur who'd love this content? Please share it!
