Dealing with late payments is a struggle that really impacts my cash flow. I found requiring a deposit upfront helps, but some clients still push the limits.
I’ve also had to get serious about following up if they go quiet. What practices have you implemented that actually help with this issue?
Net 15 is reasonable. Any longer and it feels like you are giving them a loan. I add a service fee after 30 days past due. Clients wake up when they see extra charges. Make sure you get everything in writing before you start the work. Once they sign the terms, you have proof to back you up if they delay payments.
I’ve gotten pickier about clients. Red flags:
For cash flow, I:
That separate account saved my ass when two clients paid late in the same month. I could still cover rent without freaking out.
Being upfront about money weeds out problem clients fast. If they get weird about payment terms, I know everything I need to know.
I get half up front or I don’t start.
Payment terms? Discuss them upfront, not after they’ve agreed to hire you. I made that mistake once.
I now explain my standard terms in the first meeting. Need more than 30 days to pay? That’s 2% extra. Amazing how quickly they find the money.
Good clients who pay on time get 5% off their next project. Way cheaper than chasing payments, plus it keeps them loyal.
Send invoices the day you finish. Wait weeks and they’ll forget why they owe you anything.
I switched to weekly invoicing from monthly - game changer. Smaller amounts get paid way faster and I spot issues right away.
I also track who pays on time vs. who drags their feet. Good clients get first dibs on my schedule. Slow payers? They wait for whatever’s left.
Cash only for small jobs. Bigger ones get half up front, rest when done. No exceptions.