Long time to collect fees
Long time to collect fees
(OP)
I am an electrical/mechanical design engineer in TN, just starting my own firm. So far, so good - my accounts receivable keep growing, but converting receivables to cash is becomming a problem. A few of my clients, God bless 'em, pay by the 10th, but most are over 90 days past due. Is this typical in the design business? Or am I not being aggressive enough in collecting.





RE: Long time to collect fees
I've heard this too many times: "I can't pay you until I get paid by MY customer." Then you'd better go see your banker.
A few options:
Down payments.
Progress payments.
Retainer.
Timed software licenses that don't get renewed unless payments are made.
Schmoozing the client well ahead of payment time to establish a relationship of "need to pay this guy".
Send Guido and Rocky over to visit your client.
TygerDawg
Blue Technik LLC
Virtuoso Robotics Engineering
www.bluetechnik.com
RE: Long time to collect fees
I also do not release any final stamped calculations or drawings until the bill is brought up to date.
I also go by another motto here... "Piss poor prior planning on your part does not constitute an emergency on mine".
No more Mr. Nice Guy here...
Mike McCann
MMC Engineering
RE: Long time to collect fees
Jim
RE: Long time to collect fees
I do get in the habit of sending my customers monthly statements - even if paid up - unless there has been no activity in like 60 days or more. It reminds them I am still there or that they have an aging account (especially when it shows up in the 90 day box).
Before I send a statement out showing a 60 day outstanding balance, I call the client to see how things are going, to see if they need anything, ask for feedback on the project, and the ask them if they knew the invoice had not been paid. A lot of the time, the person I work with was not aware it was not paid and takes care of it.
I guess I have been lucky to not have to chase a client for 180 days but I did have one (architect) who was waiting to get paid and I did have to wait like 120 days. But as long as their story stays consistant and appears honest with me, I'll work with them.
I do budget about 10% of my billings as uncollectable so I do not have to count on these to pay the bills. If I get the 10%, bonus for me.
Don Phillips
http://worthingtonengineering.com