Any ideas on slow paying clients?

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Author Message David G. Axt, CDT, CCS, CSI, SCIP Senior Member Username: david_axt Post Number: 2085 Registered: 03-2002 Posted on Tuesday, July 16, 2024 - 01:52 pm:    I have a few architectural clients that are very slow to pay my invoices. I hate having to send out reminders all the time. Any ideas would be welcome. Thanks. David G. Axt, CDT, CCS, CSI, SCIP Specifications Consultant Axt Consulting LLC Matthew Jarsky New member Username: jarsky Post Number: 1 Registered: 05-2022 Posted on Tuesday, July 16, 2024 - 02:06 pm:    As an architect with a small practice, I do my own invoicing and collections. I can offer the following suggestions: 1. Do a "pre-invoice" call where you call your client, tell them you will soon invoice for project XXX for $###, and you are confirming that everything is in order, and they are ready for your invoice. 2. Get a 50 or 75 percent deposit. Or even 100%. 3. Invoice monthly (or even bi-weekly) rather than at milestones. 4. Accept credit card payments. 5. If you have bookkeeper or accountant, have them do most collections. They may have a rapport with your clients' bookkeepers and accountants. I am sure I have forgotten a few. Dave Metzger Senior Member Username: davemetzger Post Number: 831 Registered: 07-2001 Posted on Tuesday, July 16, 2024 - 03:12 pm:    We had one client in particular who was very slow in paying. When he approached us about specifications for another project, we said we'd be happy to work with them again, but we wouldn't start until we had been paid in full for previous work. That worked. ken hercenberg Senior Member Username: khercenberg Post Number: 1636 Registered: 12-2006 Posted on Tuesday, July 16, 2024 - 04:23 pm:    My biggest client when I last worked as a spec consultant (a while ago) stopped paying on time to the point where it became painful. Then they advertised for an in-house Specifier. I took the job as an officer in the company. My first action was to request that they authorize payment to my old company as an act of good faith. Not something I would normally suggest but it worked for me in this instance. David G. Axt, CDT, CCS, CSI, SCIP Senior Member Username: david_axt Post Number: 2086 Registered: 03-2002 Posted on Tuesday, July 16, 2024 - 05:49 pm:    Matthew and Dave, those are good suggestions. Thanks! Ken, what would you have done if the new company did not pay your old company? David G. Axt, CDT, CCS, CSI, SCIP Specifications Consultant Axt Consulting LLC (Unregistered Guest) Unregistered guest Posted From: 24.118.63.166 Posted on Tuesday, July 16, 2024 - 05:49 pm:    I do expect and plan for a certain amount of AR; and I send initial friendly reminders, direct chats, etc. if invoices are not paid in timely manner. But since I'm responsible for the financial health of my company, I also set limits and follow company procedures that I've established - if f I'm unsuccessful at obtaining payment, it may lead to a demand-for-payment, followed by legal action. I've never gotten to the last part, but close to it on a couple of occasions. Matthew Jarsky, architect Junior Member Username: jarsky Post Number: 2 Registered: 05-2022 Posted on Tuesday, July 16, 2024 - 06:33 pm:    Regarding Item 1. in my list of advice, I should have credited it: Patty Huntley formerly of PSMJ (and PMI, think) passed that one along in PSMJ’s “Project Manager Bootcamp” course. ken hercenberg Senior Member Username: khercenberg Post Number: 1637 Registered: 12-2006 Posted on Wednesday, July 17, 2024 - 08:44 am:    Haha. I was lucky David. I had 3 offers at the time so I had a fallback position. Thankfully I made my intentions clear during our interview, including the fact that part of my decision was to be based on my position in the firm and ultimately on my getting paid. I already had a relationship with a collections agency where a friend worked but didn't want to lose a percentage of my billings to them. Worked there 5 years. Didn't take long to figure out that management had no idea what I did or why they needed me. They just knew that they did. Worked with some great people though I did find that being an officer did little to help me get my job done or improve my standing with designers.