Slow Paying Customer Policy

[paul bruesch]

Terry,

It could be that there are two primary reasons why they like you and
continue to use you... (a) you do good work in a timely fashion... and (b)
you "let" them take a really long time to pay.

Do you know anything about their operation? Are they consistently running in
the red? Do they do a lot of spec work that sits on their floor for months
after they complete a rebuild?

I think that with their history, they should not be surprised if you ask for
payment in full with the order... or half with the order and balance BEFORE
shipping product.  Tell them what you've just told us.  If they're
reasonable people, they'll understand. Perhaps they'll offer a reasonable
explanation and suggest a reasonable payment option. If they're not, they
may look elsewhere for their boards, but you've indicated that you might not
care. Who needs a headache like that, anyhow??

Paul Bruesch
Stillwater, MN

On 6/4/07, Farrell <mfarrel2 at tampabay.rr.com> wrote:
>
>  I'm looking for some opinions on setting a policy for a slow paying
> customer. A company I have been building soundboards for several years now
> has consistently been a slow payer. The last invoice they paid up was for
> $3,500 - it was finally paid this February - they got their soundboards in
> May of last year - eight full months to pay. And it was like pulling teeth.
> I currently have an unpaid invoice for them - I have sent three copies of
> the invoice - the last one with a very personal note in red ink - emailed
> and phoned them. They owe me $1,500 - they got their soundboard panels last
> October.
>
> My policy has always been to take a soundboard order, build and ship it,
> and then bill. Everyone I deal with pays promptly (thank you guys!) - except
> this particular crew.
>
> I love building soundboards for anyone. But I gotta get paid! I received
> another order from this same company for more soundboards. I definitely need
> to have all previous invoices paid up before I start on their new order - I
> know that. I know many folks who do this type of work will ask for 50% up
> front and the balance upon completion.
>
> I have always been very timely with constructing and shipping their orders
> - even on short notice. I'm thinking that because of their demonstrated
> reluctance to pay their bills, it would be reasonable and really the only
> sensible policy to ask for payment in full with shipment of soundboards
> within two weeks of receipt of payment in full.
>
> I hate to have to play hardball - and I know I might even loose this
> customer because of it - but if I don't get paid, what good where they
> anyway? I have little doubt that I have wasted enough time over the past few
> years to have built a soundboard for someone else in the time I have spent
> tracking down these slow payers.
>
> I'm a one-man-show. I have no administrative help. I'm reasonably
> efficient building soundboards and related things. I'm very inefficient at
> administrative tasks. I probably spend ten times the amount of time doing
> administrative things that someone more efficient at those tasks could be. I
> just don't have time to spend being a bill collector.
>
> Any opinions on a fair, efficient and productive policy for this client?
>
> Terry Farrell
> Farrell Piano
>
> www.farrellpiano.com
> terry at farrellpiano.com
>
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