One of the first clients I had in my recruitment business purchased $2,500 in services from us each week for ‘temporary staff’.
Our terms for temporary staff (temps) were 7 days.
Each Friday, we paid the temporary staff working on-site with our clients, we then emailed our invoices out to our clients.
We expected the client to understand that we had already paid their ‘temps’ wages, and we expected our clients to pay by the following Friday but our client’s payment cycle was set up to play suppliers monthly.
Does that sound familiar?
By the time our client paid us $2,500 for the first-week temp wages, the temp had already worked four more weeks and we’d sent out four more weekly invoices.
Our client actually owed us $12,500.
That’s super scary if you multiply that over twenty or fifty customers… minimum $250,000
Ouch! As a start-up, I couldn’t possibly afford for clients to pay like that. I couldn’t afford to have unpaid invoices.
I needed those funds to pay my staff, suppliers, and myself. And I also knew that it is scary and dangerous to carry a lot of overdue debt.
I remembered a quote from my first business coach, Michael Sheargold:
‘If you want something, ask, and keep asking until you get what you want…’
So, in a friendly, customer service way, we explained our situation to our clients…
… we asked, ‘what is it we both need to do so you can pay our invoices each week?’
That sentence worked like magic. We got paid weekly from then on.
There’s much to be said for simply asking.
What do you need to ask your clients, so they pay your invoices on time?