Wednesday, 1 May 2013

Chasing money costs time.

Today I had to call a client who had not paid me for work I did on the 21st of March.  I'd made an enquiry two weeks ago as I don't like to let these things drag on too long.

It goes like this: I always speak to the person with whom I already have contact.  They are embarrassed, complain about "the finance department" and then promise to follow up with them and let me know the outcome.  They then send me an email saying "it's underway".  No specific timeframe is ever mentioned.

I wait for two weeks and when no payment is received I email my contact asking for details of the contact person in the finance department.

That's what I did today.  I called the finance department while I had a spare twelve minutes between trams.

Barbara was pleasant but didn't let me complete a single sentence.  I had to repeat my name three times as she located me on the system.  Then she made this pronouncement: "Yes, you'll be paid on Friday.  The payment isn't overdue.  Every organisation has a 30 day payment policy and we moved you up to 14 day payment terms."

I thanked her from confirming that I would soon be paid, but she was working off some whacky calendar.  Apart from the face that the dates didn't add up, I asked her why her organisation thinks it's okay to just ignore MY payment terms of 7 days without a word.

"Well it's such a little amount of money and this is what every organisation does.  We pay tens of thousands of dollars in invoices each month."

I sat at the tram stop wondering what that had to do with me.  And I wondered about how the finance department of an organisation with a strong set of values thinks it's okay to be so arrogant.

Obviously I need to change my practises and have an explicit conversation about payment terms.  As a freelancer, I can't afford to provide my services and then wait for weeks, sometimes months, to receive my payment.  When you're running your own business, it's not possible to be coy about money.  You've got to be clear, specific and say what you need.

Here's to the money being in the bank, rather than the cheque being in the mail!

1 comment:

  1. I agree - be upfront. Some companies do operate on a 30 day cycle, so you have to be ok with that if you want to accept work from them.

    A lot of business say 7 days in order they get paid in 14 or 30, and only start chasing it up at that point, and so on.

    Better to be clear on expectations at the start, that way there's no confusion later. And get it in writing!