My client's cashflow position has got worse, one client seems to be folding and the diretcors are asking me to go into the overdraft on order to pay the remainder of their salaries for this month.
What do you do? I can see they have these problems, should I keep working and hoping they pull through, stop and tell them I'm not doing any more, ask to be paid weekly?
I've been doing their books for about 5 months. I'm paid up to date as in I invoice at the end of the month, ask for payment within 30 days and usually get it about 2 weeks after that. So my May invoice has just been paid but not my June invoice, don't expect that for about another 4 weeks.
But, of course, I can see how things are going, and that's not too well.
Protect yourself. You are not a charity. If they go bang in 2 months owing you even more money, you will be so mad with yourself.
You've got to be honest, make it known that you're not doubting their integrity, but you are in a privileged position and know the score. If you are prepared to continue giving them credit, then at least make sure you've only got one invoice outstanding.
The story so far - I invoice 1st to the last day of the month. My terms are pay within 30 days, my client never does, usually about 2 weeks after that, but this hasn't been a problem until recently. At the moment I am just about due to be paid my June invoice. July's was raised on 31st it's due, but not over-due, if that makes sense.
My client is still having cash flow issues and has not indicated to me that they have any ideas how to rectify this, except start to pay creditors, excluding me, later and later. So, whereas I am just about to be paid my June fees, other creditors should only just be getting paid for May.
I wasn't confident enough to just come out and ask for my fees to paid more promptly so at the end of July I emailed them a statement as well as a copy of my July invoice, asking for payment of all invoices, previously I would just have asked for payment of my June invoice. On Friday just gone I prepared a payments list for the coming week and asked them to approve the payments on it (I make the payments), I included both my June and July invoices, hoping they might just say yes go ahead and pay, instead they are asking, with a smiley face, why I have included my July invoice for payment.
The directors and other employees are all, being paid on time. So they get paid mid month, for, I think the month, so in effect some of it is payment in advance. Now, I know I am not an employee, I wish I'd taken them up on the offer, and I don't have the same rights to payment, and I did offer the 30 days, but things have changed since I took on the client, they now have what appear to me to be fairly serious cash flow issues. It has been indicated that the most important people to pay are the employees and myself. Although, it seems, only my overdue invoice is important each month, not the most recent one. ALso, sorry to o on, they have taken on another 'self employed' admin person. This person invoices weekly and gets paid weekly, so they are being paid for the first week of August now whereas I would have to wait until mid October to paid my August fees!!!!!
Humph!I feel quite angry now I've put it like that. I just wondered if anyone knows what a firm would do in this situation, where you do regular work for a client, suddenly you can see they have problems, would it be mentioned and perhaps invoice weekly, or ignored, I mean, they haven't missed a payment yet, but I don't want to get into the situation where they do go under and I'm left with a month's invoice unpaid, plus all the work to that date. I mean, at the moment, I have June and July invoices unpaid, June to be paid this week, but I've also done two week of work in August.
Maybe I should say, ok pay me now for June, but I want July's paid on 1st September, not mid September after their salaries, if there's enough left over.
Really sorry to bring this up again, but I've gone in before with heavy feet and lost everything, although that was to do with a horse not a client, so not really relevent, and now I'm waffling.
I was in a similar, but not identical, situation recently. A long standing client went to the wall. I can't say I ever really gave any thought to not being paid though. I invoice with 7 day terms and chase payments religiously to the extent I send reminders at 5 or 6 days after invoicing (a day or two before payment). Why not tell the client that due to your own cash flow situation terms are changing for all clients from 30 days to 7 days.
There is always a chance you will lose a client when you change how you deal with them. Your decision has to be whether its worth the risk. With my situation I was right not to worry as when my client finally went into liquidation I was one of the people he made sure were paid first.
I'm meant to be working now, but can't stop worrying about what to do.
They are my only client! But enough to keep me busy.
I'm thinking I might leave it at 30 days, but then say I want paying on 30 days, no more waiting two more weeks. Work will stop until I get paid - but the only person that will really cause problems for is me - because I'll have two weeks work to catch up on when they finally get round to paying me!!!!! Getting hysterial now!!
It seems to me that you have explained things to us, you should now tell your client the same thing.
You are in a position to know their cashflow problem, and have concerns
Although you are not an employee, the fee is your income, and you rely on it
Others are getting paid on time, or early. Yours are getting later, and not within your agreement. As they have broken the terms, you can ask to be paid on invoice
It is not an easy situation but you need to let them know, in a diplomatic way. Otherwise the only one to lose out will be you.
The worry is stopping you from working and for this reason alone, I suggest one way of empowering yourself is to begin looking for other clients. Getting a client, would of course, be wonderful, but even in the looking (advert - card in window - web site) may help you approach them in a calm and thoughtful way.
Best wishes with this, and in the meantime you might just drop the '30 days' altogether from the invoice.
In response to my client's question - why have I asked for payment of my most recent invoice (with the simley face - always a smiley face) - I just said that my invoices are generally being paid at least 2 weeks over the 30 days and I would like to get up to date, simple as that, I didn't want to get into details unless they queried it further.
Now, if I get paid regularly once a month I get paid halfway through my 30 days, not halfway through the second lot of 30 days.
