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How do YOU handle it?

by shadow92
5 replies
Late Payments - Missed Payments.

In 2014 my #1 complaint was late payments. All payments were eventually made but I'm bringing the hammer down in 2015.

I had over $80,000 in late funds last year. That's ridiculous.

Currently I'm using credit cards, that is soon changing to check draft printing to avoid the large merchant fees.

The problem is that sometimes the funds are not available. If they're not, it kicks back and declines the charge. There have been many times where it has taken several weeks to get a charge to go through. I'm tired of this.

My question is, does check draft deposit do the same thing? If the funds are unavailable won't the check draft bounce? Or will it take the total and subtract it from the account, leaving the account at a negative balance?

Even with ACH transfers the same thing can happen. Yet on my personal bank accounts, if I don't have money in the account, It doesn't decline the charge, it charges it and I get the negative balance on my end.

We do have a $25 late charge but it doesn't do much at all. If anything it only causes more problems. They end up getting mad and calling to try to drop the late charge.

So how do we do this so we can expect our money?
What do you guys do?

(ps: don't tell me to use paypal)
#handle
  • Profile picture of the author DABK
    Don['t use paypal.

    Get paid upfront as much as possible.

    Get richer or better organized clients.

    Send reminders a weak ahead. Hey, your payment is coming due in x days.

    You'll have to make it sound businesslike. Maybe, you'll send them the report of what you've done the current month and have the reminder in the report.

    First client I ever had (was for SEO), didn't pay the third month. I stopped working. He got upset, told me I should have reminded him the payment was coming due. He had money every time on time after that. But it was not pleasant. I should have reminded him, it was in my interest to have done so.

    Now, I embed reminders in activity reports, and it's helped a lot.


    Originally Posted by shadow92 View Post

    Late Payments - Missed Payments.

    In 2014 my #1 complaint was late payments. All payments were eventually made but I'm bringing the hammer down in 2015.

    I had over $80,000 in late funds last year. That's ridiculous.

    Currently I'm using credit cards, that is soon changing to check draft printing to avoid the large merchant fees.

    The problem is that sometimes the funds are not available. If they're not, it kicks back and declines the charge. There have been many times where it has taken several weeks to get a charge to go through. I'm tired of this.

    My question is, does check draft deposit do the same thing? If the funds are unavailable won't the check draft bounce? Or will it take the total and subtract it from the account, leaving the account at a negative balance?

    Even with ACH transfers the same thing can happen. Yet on my personal bank accounts, if I don't have money in the account, It doesn't decline the charge, it charges it and I get the negative balance on my end.

    We do have a $25 late charge but it doesn't do much at all. If anything it only causes more problems. They end up getting mad and calling to try to drop the late charge.

    So how do we do this so we can expect our money?
    What do you guys do?

    (ps: don't tell me to use paypal)
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  • Profile picture of the author Jason Kanigan
    Best payment methods are bank wire transfer or a check.

    They can't chargeback those.

    Get paid 100% up front and don't start the work until you receive it.

    Behave differently at your peril.
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  • Profile picture of the author iAmNameLess
    I assume you're talking about recurring payments and their balance doesn't cover it so it shows up as declined, is that right?

    When dealing with checks and printing out the checks and depositing on the due date each month, chances are you will still get the money. It's illegal for them to bounce a check, and most banks will transfer the money anyway.

    With the amount of credit card fraud and risk of identity theft, banks change the cards often. They don't change checking accounts very often at all.
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    • Profile picture of the author savidge4
      I think steps are in order here. the check print method is going to help your payment process considerably. On its own it self cycles 2x before it gets kicked out. Depending on the state your company is in ( and this could be Corp structure and not physical ), there may be a "bounced check" department.

      I know personally that in SC if I pass a check off to said department and payment is not made through them in 30 days, they simply revoke the check writers drivers license ( regardless of state by the way ). Needless to say that process has to only be seen once, and it is amazing how prompt payment becomes after that!

      Personally I have gone the next step in payment and use ACH. Life is then even easier. you send a bill ( automated I might add ), point a link to a payment page, the client clicks to pay. done and over. - much like any of your utility bills I am sure. No payment and a polite reminder is sent ( again automatic )

      At this point, I really don't deal with this aspect of my business much any more, thats what accountants are for. As non outsource minded I am on MANY things, this is simply worth the expense.
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  • Profile picture of the author Skystar
    .
    If they just won't pay and it's over about $3,000 I get a 'representative' from
    Craigslist to stop by 'request' payment.
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