Comments on: When to get tough with a deadbeat client http://smallbusiness.blogs.cnnmoney.cnn.com/2009/01/22/when-to-get-tough-with-a-deadbeat-client/ Editors from FSB magazine answer your pressing small-business questions. Tue, 15 Dec 2009 12:52:55 +0000 http://wordpress.com/ hourly 1 By: Bruce S. Boston mass. http://smallbusiness.blogs.cnnmoney.cnn.com/2009/01/22/when-to-get-tough-with-a-deadbeat-client/#comment-1612 Bruce S. Boston mass. Fri, 20 Mar 2009 00:15:24 +0000 http://askfsb.blogs.fsb.cnn.com/?p=902#comment-1612 Costs of collections exceeds profits. No bank or business needs that. Troublesome clients use factoring. Get other business. Gettting less headaches. Costs of collections exceeds profits.
No bank or business needs that.
Troublesome clients use factoring.
Get other business.
Gettting less headaches.

]]> By: Harris Brown, New York http://smallbusiness.blogs.cnnmoney.cnn.com/2009/01/22/when-to-get-tough-with-a-deadbeat-client/#comment-1504 Harris Brown, New York Thu, 12 Feb 2009 13:32:00 +0000 http://askfsb.blogs.fsb.cnn.com/?p=902#comment-1504 Get the money upfront if you can especially in a design business. We always ask for the credit card and charge before we start any project. If a project is less than $1,000 we charge up front. We do media buys and we charge the credit card or get checks up front these days everyone is short for cash and you are not a bank tell like it is who needs the stress of collection and a bad client. Let them walk another client will come along. Tell them do you work for free. Clients who look for a bargain will give you a hard time. We have clients you spend thousands and don't complain about giving a check or credit card upfront as long as the work gets done. Thanks http://www.hfbadvertising.com Get the money upfront if you can especially in a design business. We always ask for the credit card and charge before we start any project. If a project is less than $1,000 we charge up front. We do media buys and we charge the credit card or get checks up front these days everyone is short for cash and you are not a bank tell like it is who needs the stress of collection and a bad client. Let them walk another client will come along.

Tell them do you work for free. Clients who look for a bargain will give you a hard time. We have clients you spend thousands and don't complain about giving a check or credit card upfront as long as the work gets done.

Thanks http://www.hfbadvertising.com

]]> By: Bob - Boise, ID http://smallbusiness.blogs.cnnmoney.cnn.com/2009/01/22/when-to-get-tough-with-a-deadbeat-client/#comment-1472 Bob - Boise, ID Tue, 03 Feb 2009 21:49:36 +0000 http://askfsb.blogs.fsb.cnn.com/?p=902#comment-1472 One thing that it is very hard to convince small business owners of is that losing deadbeat customers is actually a good thing. If you you have people going out over 100 days, you need to put them on cash or credit card terms only. Eventually what will invariably happen is that these types of customers will file for bankruptcy or just disappear. If that happens, you've not only lost your profit but your cost of your goods and services as well. One large account that does this can wipe out months of profit in a small operation. It's a tough choice, but unless you are a bank or loan company, those bills need to be collected. In one of my companies that does onsite computer service, years ago we finally had to put almost all of our clients on credit card or check upon work completion. We got tired of billing companies then 2 months later arguing with people over how much was owed - they always wanted to negotiate. We figured if they didn't have the money to pay us at the time of service, they wouldn't have it a month later, so we went cash up front. One final thing - if you lose a customer because you won't give them extended credit terms, it most likely isn't a customer worth having in the first place. One thing that it is very hard to convince small business owners of is that losing deadbeat customers is actually a good thing. If you you have people going out over 100 days, you need to put them on cash or credit card terms only.

Eventually what will invariably happen is that these types of customers will file for bankruptcy or just disappear. If that happens, you've not only lost your profit but your cost of your goods and services as well. One large account that does this can wipe out months of profit in a small operation.

It's a tough choice, but unless you are a bank or loan company, those bills need to be collected.

In one of my companies that does onsite computer service, years ago we finally had to put almost all of our clients on credit card or check upon work completion. We got tired of billing companies then 2 months later arguing with people over how much was owed – they always wanted to negotiate. We figured if they didn't have the money to pay us at the time of service, they wouldn't have it a month later, so we went cash up front.

One final thing – if you lose a customer because you won't give them extended credit terms, it most likely isn't a customer worth having in the first place.

]]> By: William Eisenhauer, Tigard, OR http://smallbusiness.blogs.cnnmoney.cnn.com/2009/01/22/when-to-get-tough-with-a-deadbeat-client/#comment-1453 William Eisenhauer, Tigard, OR Mon, 26 Jan 2009 20:52:00 +0000 http://askfsb.blogs.fsb.cnn.com/?p=902#comment-1453 Give them an incnetive to do so. I always set up the intial contract so that if they pay within 30 days they get a "discount" of 20%. After 30 days, they owe the whole thing, I have never had a client yet go 30 days, in fact they call around day 25 to confirm I got the check. I did the same with with a home rental I had, if they paid rent prior to the the 1st they got an immediate $100 cash back, not $100 off..but handed them a $100 bill as soon as their check cleared. Never once had a late rent check. Works like a charm. Give them an incnetive to do so. I always set up the intial contract so that if they pay within 30 days they get a "discount" of 20%. After 30 days, they owe the whole thing, I have never had a client yet go 30 days, in fact they call around day 25 to confirm I got the check.

I did the same with with a home rental I had, if they paid rent prior to the the 1st they got an immediate $100 cash back, not $100 off..but handed them a $100 bill as soon as their check cleared. Never once had a late rent check.

Works like a charm.

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