Late Payments!?

nitim

I'm thinking about asking for my invoices to be paid upfront into an escrow account.

I spend so much time chasing late payments, I'm hoping this will make things easier for me (and reduce my costs!).

I realize that clients would probably prefer to keep their money in their accounts as long as possible so it can work them.

Do you think that, if I offered a discount (greater than a bank's interest rate) on the invoice, that escrow would be an appealing option?

webservicescoach

Getting prepaid is one of the great secrets to longevity in business. I'm not convinced you need to even use the escrow account....unless you're talking more than about $2,000. Anything under that should be prepaid. If you phrase it right in your sales process that you "just like to get the money part out of the way so we can focus on the project" people will agree with you. It's all about the approach.

Room2Grow

Hello nitim.

Your business structure and decision on whether or not to lend credit is something that every business decides on. Credit is easier to lend if your services are high in demand. In short if you choose to lend credit, you need to establish what type of credit and have the terms in writing. It can vary from Net 30/60/90 to payment plans and promissory notes. Always document the agreement up front and have a plan if a customer or client doesn't pay (and stick to it). Lending credit can attract many new customers because of convenience ,but comes with risks.

The main reason credit will not be paid is due to the person lending credit putting their priorities over your bill.

If you do all this and still come across issues then I would suggest seeking professional services.

My experience: Collection Agency Exec.

(If you have specific questions on collections or building a process send me a pm)