When you're growing a business, a late-paying client can be frustrating. You have to dedicate time and resources to figure out what happened and why. You have to pull yourself together enough to have a conversation about money - something that's not easy for many people. The most important thing to remember is that your business fulfilled its part of the deal, and now your client owes your business.
When dealing with late-paying business clients, remember that it's not personal.
Separating Business from Personal
One of the first recommended practices when starting a business and organizing accounting is to separate business expenses from personal expenses. When you do this at the beginning, it's easier to measure the success of your business and where you're spending too much money. Although the business may be your idea, your "baby", this separation is necessary and important for many reasons.
Do As the Professionals Do
Your clients chose the goods or services you offer because they needed them for their business. You're offering a professional resource to another business to help them succeed. That means you're also getting an agreement or contract signed. You're setting expectations and payment terms. You're creating a scope of what you'll provide. And you're invoicing per the terms of the agreement and the scope of work that you've provided.
See also: What to Include on B2B Invoices So Clients Pay On Time
Following Up is Expected
Since you are a professional offering a professional resource, it's expected that you're going to follow up on an unpaid invoice. In many cases, your client hasn't paid their invoice for a number of reasons. They may have overlooked it. They may have sent payment through the mail that hasn't been received yet. They may be unsure of when payment is due or have questions to address with you. If you've built a good relationship with your client, it's not their intention to get your work for free. A follow-up is necessary and expected.
Asking for Help is Okay Too
If you absolutely don't have the time or confidence to inquire about an overdue invoice, asking for help is perfectly okay too. Whether you hire a bookkeeping service to handle everything or you decide to get a professional accounts receivable service to collect on your behalf, you have assistance that you can turn to.
When the business idea comes from you, the work is performed by you, and you're the one sending out the invoices to be paid, it's normal that it feels personal to you. The good news is that what you're feeling doesn't have to stop your business from seeing a positive cash flow.
