Making Customers Pay

(Forbes) — Fire a Warning Shot:  Your contracts and invoices likely include language saying that past-due payments will accrue interest at some rate. If you’re like me, you’d rather work with your customers than play shylock, but at some point enough is enough. If six months go by and a customer still hasn’t paid, include with your next bill a letter reminding him that he agreed to the interest charges but that in good faith you haven’t enforced them. Then calculate the total interest thus far and say you will charge all of it unless payment arrives within two weeks. My firm has done this a half-dozen times, and it always works. One client, who owed about $15,000, stopped by and handed me 12 checks, each for $1,000, to be cashed the first day of each month in the coming year. Now, there is no assurance that the checks will be good, but at least he is making an honest attempt to pay me.

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