
Iāve spent a good chunk of this week chasing late payments.
Iāve written before about the emotional toll asking for money takes on you, but thatās at the best of times. Talking about money in the middle of a global crisis is something else entirely. I nearly cried this week when I entered into a protracted conversation with a client about outstanding payments. But! I did have the conversation and the result was a (partially) paid invoice.
Here are some thoughts on how to chase a late payment right now.
Get ahead of the problem
I already live by the mantra of chasing payment as soon as it becomes late, not just when I need it. The current situation has shown me just how important that mindset is because every underpaid invoice I have is now a potential debt I may never recover. Iām not letting anything slide right now because if a business that owes me money goes under, itās going to take my paycheque with it. Under normal circumstances, I do my bookkeeping once a week but now Iām doing it every day. Iām in my bank account and tracking payments every single morning and chasing clients regularly. Itās exhausting but necessary.
Make a corona cashflow tracker
Iāve started a dedicated corona finances spreadsheet to track my money right now. I use Wave Apps to do my invoicing and expenses but Iām finding itās not giving me enough information about the real-time state of my finances. In my spreadsheet, I have a tab for each month in which I record the invoices due and the status of them in one column. Then in the next column, I have all my outgoings for that month. I did some formula wizardry that tells me whether thereās enough coming in to cover what needs to go out. Iām also recording the money Iāve lost in this spreadsheet. I have a tab detailing the work thatās been cancelled or put on hold and how much money Iāve lost as a result. It might not be pretty but at least it will give you the full picture of whatās actually happening to your money right now.
Show empathy
Itās soul-destroying to check your bank account each morning only to see that invoice still hasnāt been paid. As tempting as it might be to go guns-blazing to a client about your late payments, try to approach the issue with as much empathy as you can muster. Every single person has been affected by this virus in some way and no one is operating as usual. Try to get the client to explain to you why a payment is late. If itās a cashflow issue on their end, is there a compromise you can come to? Remember thereās a human at the other end of that accounts@company.com email address.
Know your rights
Some clients will always be weasels. Assess whether the person youāre dealing with canāt pay you because their business is genuinely suffering or if theyāre actually just being jerks. The pandemic doesnāt mean we now live in a lawless society; know what your payment rights are and exercise them if you have to.
Pick your battles
All of my invoices are late at this point. Some are for thousands of pounds, others are for hundreds. Under normal circumstances, I would be issuing late payment fees left, right and centre, but Iām choosing to waive those fees right now. Iām going after the big invoices first because the amounts of money on the line are significant; if I donāt have the energy left to chase the smallest sums, I may well just prioritise my mental wellbeing and write them off. Everyone has a different battle to face right now, pick the ones you have the strength to fight.
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