http://www.networknetwork.net/wp-content/uploads/2016/03/networknetwork_logo.gif 0 0 dbresler http://www.networknetwork.net/wp-content/uploads/2016/03/networknetwork_logo.gif dbresler2015-03-02 19:47:272015-03-02 19:48:34Dealing With Client Who Are Always in Arrears
How do you deal with a client who is always in arrears? (Summarized from a recent Around the Horn round-table segment.)
Most of us, if we have been in business for any length of time have had to deal with this problem. You have a client, maybe even a large client, that is always an account receivable. Sean O’Rourke, founder of Syzygy3, an IT Consultancy, suggests that the first thing you do is change the terms. If they are net 30, make them net 10. And, if that doesn’t work, turn off the tap. Why should you be your client’s bank?Conversely, Fred Cannone, of Telehouse USA believes that this is a consistent condition of being in business. Just go with the flow.
Josh Kaston, who runs operations for FA Processing, a Merchant Services Company, suggests that they be converted to Credit Card payments. That way one can be paid on demand. Adam Russ, a litigation partner in the Law Firm of Wasser and Russ offers a discount for payment within 30 days as an incentive for prompt payment.
Paul Pagano of Milberg factors suggest that clients who are poor payers may not be worth the hassle. And, Fred Gasior, the founder of Team Relocation Management, a commercial move consultant, will bill in advance, to be paid by the move date, if the client is known to be a problem payer.
Carl Bulgini has, in the past, told slow payers that they will now be services by a junior member of the team. “Sorry, the associate will now be your attorney.” And, as an extension of this concept, you may either institute a retainer agreement or increase an existing retainer to cover any experienced shortfall or late payment.
But, the consensus is, slow payers are not good clients.