We used to do as Charlie suggested and offer an early payment discount.
Many customers ignored it (OK) Some knew they forfeited it by paying after
the discount period. And the troublesome took the discount anyway even
though they were paying 90+ days late. "It's on your invoice that I can
take 10% off! and you never defined 10% 10 net 30." (In other words they
could decode the 10% but not the net 30. Like that's believable...." But
invariably those were the customers who claimed that you hadn't sent a
bill, didn't detail something properly, it got lost, etc etc, "can you
please send another copy?". Then you would RUNQRY on the open payables file
and there the suckers were, 'On Hold'. Then call them back and explain what
you do for a living and they still don't get it. Tel them you actually work
on the computer where A/P runs - they don't get it. Give them dates and
times of who put them on hold in the computer and your exact outstanding
balance and..... OK NOW they get it! So for those customers we changed
terms to flat net 10. And put them last in line for resource allocation.
- Larry
Larry Bolhuis IBM Certified Advanced Technical Expert:
Vice President System i Solutions
Arbor Solutions, Inc. IBM Certified Systems Expert:
1345 Monroe NW Suite 259 System i Technical Design and Implementation
V6R1
Grand Rapids, MI 49505
(616) 451-2500
(616) 451-2571 - Fax
(616) 260-4746 - Cell
(Embedded image moved to file: pic10723.gif)
If you can read this, thank a teacher....and since it's in English, thank
a soldier.
"Charlie
Massoglia"
<cmassoglia@voyag To
er.net> "'Consulting on the iSeries /
Sent by: AS400'" <consult400@xxxxxxxxxxxx>
consult400-bounce cc
s@xxxxxxxxxxxx
Subject
Re: [Consult400] working with IT
06/17/2009 12:21 Services firms
AM
Please respond to
Consulting on the
iSeries / AS400
<consult400@midra
nge.com>
Offering an early payment discount is the best way I have found to insure
clients pay on time. Determine what you need to bill and add $5. Then
offer a $5/hour discount for payments with xx days.
I rarely had problems with prompt payment for many, many years. However,
almost all of the clients for whom I worked were quite ethical.
Thanks.
-----Original Message-----
From: consult400-bounces@xxxxxxxxxxxx
[mailto:consult400-bounces@xxxxxxxxxxxx] On Behalf Of Steven Keil
Sent: Sunday, 14 June, 2009 15:55
To: Consulting on the iSeries / AS400
Subject: Re: [Consult400] working with IT Services firms
My former career involved administering Accounts Receivable at IBM for
may years and I had some big accounts. I carried this into my
business when I went solo. The biggest blessing of the experience was
learning the skill of speaking openly about about money. As a result,
collections are part of my normal part of my business.
You don't say if this is a sub job or direct for them. If you are a
sub contractor, don't involve the client unless it's critical (greater
than 90 days or they may go out of business). This is between you and
the contracting firm.
First thought: It's owed. It's in the contract. No apology, you are
just reminding them of the agreement they signed. Approach it from
this fact.
Second thought: You've allowed a precedent to develop. You will need
to think ahead and plan a meeting to remind them of your terms and
what will happen if they continue to ignore them. If you tell them
consequences and don't follow through, you will be ignored in the
future. (The only way to change a habit is to be up front about it.
My experience tends to tells me it will take about 90 days to change
their habits/process.)
You don't need to be loud about this, just persistent and follow up
the day after terms are not met (example- call on the 31st day if no
check in that days mail.)
Here is an example of how I handle local accounts:
On the 31st or whatever day, call. I offer to drive by and pick it
up, since it should be ready. Make friends while you are there or on
the phone. AP people are used to getting negative calls. Be
friendly, but firm. (I've even brought them a small gift for the dept
like a small box of chocolates or something small). It must be
sincere- You don't use people and it need not be a confrontation.
Once you have a relationship, you may find your invoice rises to the
top of the pile to be paid or you have a friendly face to speak to
next time it's delayed.
Just a few thoughts.
Steve
On Sun, Jun 14, 2009 at 2:54 PM, Jim Franz<franz400@xxxxxxxxxxxx> wrote:
How does one deal with the large IT Services firms when they become very
delinquent in paying invoices?
For many years I've only dealt direct with a customer.
Now working for a large firm. on 1099, have a contract (their contract)
for payment xx days after billing, regardless of whether they have been
paid by end customer. But they are regularly 30 days beyond that.
I send reminders, called, and occassionally get a check, but never catch
up.
Do I tell the customer?
Does it take having a lawyer?
In 25 years I've never walked out on a customer's project.
jim
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--
Steven Keil
Aaron & Hur, Inc. 614-877-6900 www.aaronhur.com
--
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