exploring the idea of setting aside funds as a buffer for unpaid invoice cases

Debt Collection & Unpaid Invoices
1

Been thinking about this after getting burned twice this year by clients who just vanished without paying.

Starting to wonder if I should set aside maybe 10-15% of what I earn into an emergency fund for when invoices go unpaid. Has anyone else tried this?

2

Same thing happened to me a few years ago. Two clients ghosted me in one month after I delivered their work.

I set up a separate savings account and throw 12% of every payment in there before I touch anything else.

Picked 12% because my actual bad debt runs about 8-9% yearly. The extra cushion keeps me sane.

I’m way pickier about clients now too. Those red flags I used to ignore? They always bite me later. I’d rather pass on sketchy work than chase people for money.

3

Yeah I just ask for half up front now

4

That percentage sounds right. I keep mine at 15% since bad clients hit in waves.

Treat that money like it’s already spent. Don’t touch it for anything else or you’ll be screwed when you need it.

I also ask for payment terms upfront now instead of hoping people pay on time.

5

Had a guy stiff me for 800 bucks last spring. Now I just price everything higher to cover the losses.

6

Two clients disappearing in one year sucks. Been there.

Emergency fund’s smart. Here’s what I’d do:

  • Track your actual loss rate - keep notes for 6 months to see what percentage you really lose.
  • Start small - 5% beats nothing while you build the habit.
  • Keep it simple - move the money when you get paid, before you spend it.

Hoping clients will pay isn’t a strategy. That buffer lets you focus on work instead of panicking about bills.

Tighten up your client screening too. Those gut feelings about sketchy clients? They’re usually right.