It weeded out a few clients pretty quickly, because some clients really took offence to it. It was a learning process and I really just had to go in the deep end and find out where we stood in the market to see what our relationship was like.
That’s right. I needed a marketing point. Some of our larger clients said they couldn’t accommodate for seven days, and they asked for thirty. We just dealt with them and got some concrete terms in place.
We brought all the existing clients together, set a standard and then set a precedent for it all.
It’s been a challenge for me as a business owner, because many of these clients were the results of my personal relationships with the owners. So it was hard to talk about outstanding debts, but I formulated this process where I would just template email reminders. After you reach 30 days, you get this reminder that the invoice is overdue and then we have a record of what’s been transacted.
The other benefit of this was that I can see at any point where a client is at. So I can select which clients haven’t paid via a template and so on. I can find out about our relationship with any particular client at any time.
For a new business, there’s always fear about speaking on money and payment and those sorts of things. But you need to be able to set a process in place.
You just need to minimise your risk by putting a proper procedure in place. Set the ground rules with the client, get a process, and then you don’t need to pressure them after you’ve set those rules. People don’t respond well to threats, but if you keep the communication up, things will work.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
