Bounced payments have been becoming a real headache for me. It’s frustrating how they always seem to hit when I’m least prepared.
Right now, I’m just absorbing the bank fees and attempting to track down the clients for new payments. There has to be a more effective way to manage this issue.
Been there, it sucks. Here’s what I do now after getting burned:
Stop it before it happens:
When it happens:
Cover yourself:
Make bounced payments their problem, not yours. Don’t eat those fees.
I just charge them the bank fee plus extra for my trouble. Most people pay up quick after that.
Your bank’s collections service handles bounced checks - just ask them about it. Most banks do this if you request it. I started making repeat clients use ACH transfers instead. Takes more setup but way fewer bounced payments. When clients push back on ACH, that’s usually a sign they’re having money problems.
This killed my cash flow twice before I learned my lesson.
I use a three strike rule now. First bounce? They get hit with the bank fee plus $25 processing. Second bounce puts them on cash-only forever. Third bounce and I cut them off completely.
Best thing I did was open a separate account just for incoming payments. Money sits there for 7 business days before I touch it. Everything clears properly that way.
I also run credit checks on anyone wanting net 30 terms. Costs $15 but saves me way more than that in bounced payments. Legit businesses get it, sketchy ones usually vanish.
Keep a blacklist of repeat offenders too. You’d be shocked how many people jump from business to business pulling this crap.
I just ask for cash now. Saves me the headache.
Get payment upfront or at least half - way better than chasing bounced checks later.
I only take cash, bank transfers, or verified payments now after getting burned too many times. Yeah, you’ll lose some clients, but the ones who stick around actually pay.