Small Business Owners I need your help! please read...

[OrByte]

OK I have a problem at my business, first off I have been self employed for almost a year now and in a couple of months I plan on pulling out my first business loan and start hiring employees. But I have one problem, I CAN'T GET MY CLIENTS TO PAY ME@!!!

I work for several finance institutions in California, I skip trace for auto financers and banks. Me and a partner are quite good and we have satisfied all our customers. But when it comes to invoicing our clients we just dont get paid, our checks are either LATE or short the amount in which we are owed. For example we get paid a standard amount per find for our companies. Once an account is resolved we bill it. One of our clients only cuts us a check once a month so the invoices accumulate on someones desk over there in San Diego. Well, we expected a check to be cut to us this past month for over 3K from this particular client and we only got $475!!! and this is the 4 month in a row something like that has happened. They are behind about 7K. I have another client behind about 4K and yet another behind about 1K.

How do I fix this? I need to not give them any excuse to say they lost invoices or something, I kept pretty good books so I plan on faxing over a cummulative invoice and then raising hell about it.

What kind of invoicing system have you implemented that is most effective? again I bill upon resolution of the file, should I start billing cumulative at the end of the month? should I do both? I don't have contracts with any of my current clients but I will have contracts with my biggest client (Chase Manhattan) starting next month and with WFNB by the end of the year....and I want to make sure I have a solid system in place for them.

anyway I can provide more info if needed.

oh and btw- are there any popular communities for small business owners online that I can check out? share with me people!!

thanks.

 

[ddwbi0]

When you get a new client i assume you both sign a contract for services correct? There should be some sort of "payment due within" or credit terms in there. If it says net30 then they have 30days. If you dont have anything in there, they could take however long as they want.

 

[PlatinumGold]

collecting is always difficult.

try to work by getting retainers up front. that will help you a lot.

what ever they are invoiced and they don't pay are considered by the IRS to be Income, let them know this and have your cpa file the appropriate paperwork to file with the irs, don't file it, but show your client the paperwork.

 

[CPA]

I'm not sure how big the companies are that you deal with, but most mid to large size companies pay N30 - N45. If it gets much longer than that, you should be sending a statement or collection notice. You may want to look at hiring a collection company to help also, if you don't have the staff. You should also contact the person who signed the contract and remind them what you have done for his company, what your terms are and what his company is behind in amount of payment. As a last resort you may need to start taking them to court, but that's a last option.

 

[kranky]

What action do you currently take when they don't pay on time?
Are you sending statements that show how much is over 30 days, over 60 days, over 90 days, etc.?
Do you have any ideas about why you aren't being paid promptly (promptly = 45 days or less)?