Clients Slow in Paying Invoices, Yet Want Quick Turnarounds

Why is it that even the "best" clients delay paying freelance or consultant invoices at the last minute?

Bear in mind that many clients pay their bills promptly and on time. But more often than not, they pay the bill well beyond the agreed upon due date.

Since day one, my agreements with clients require payment based on a schedule with 1/3 to 1/2 due upon acceptance of the agreement and follow up payments due upon the completion of certain milestones. But almost all of my clients agree to payment due upon receipt.

In spite of these signed agreements, however, many clients will not pay until 30 or 60 days after receipt.

Unlike most large businesses, freelancers live off of cash flow paying rent, food and other essentials based upon when they receive client payment.

So when clients delay payments, it is equivalent to an employer that decides to pay a given employee's next pay check when they are good and ready. Fortunately, most state laws require that payroll payments be made twice a month for FTEs and weekly for hourly depending upon the situation.

How would our clients feel if their employer decided to delay their next paycheck for two, three or even eight weeks? They would probably quit. Yet those same individuals think nothing of delaying payment to contract workers like freelance copywriters, artists or independent consultants.

This attitude infuriates many of us in this business.

These clients want prompt response, great work under stressful time constraints and full adherence of any agreements. Yet they think nothing of breaking their agreements in paying us on a timely basis.

Why do business people treat their suppliers like this? When is it OK to expect great service without reciprocal treatment when it comes to paying the bill?

Have you experienced this? How do you view this situation? Is there a solution?

Posted on July 14, 2008 and filed under Consulting, General.