How to spot the signs of a client becoming a debtor.

What I noticed over the years of working with hundreds of companies when helping them collect their defaulted client invoices was a common pattern that I detected in the communications with their client.

The thing I noticed was a consistent pattern of inconsistencies! This is one of the first signs of a client who is either in financial trouble or has decided not to pay you; goalpost shifting, failure to keep to agreed to payment dates and broken promises.

Please check out this brief snippet from our weekly podcast where we discuss this very point;

My recommendation especially to earlier stage companies who are relying on each invoice as oxygen to keep them on their path to financial stability, is to always make sure that your late payment penalties in your agreement are sound and that your agreement can be legally enforced in a jurisdiction that is practical, affordable and effective.

A fantastic tool that I can recommend for small businesses who are chasing invoices and want to avoid being paid late is to try using Chaser. It connects to Sage, Xero and Quickbooks and automates the sending of any invoice that you create using pre-set strategies and communication processes that you have set.

The other thing that companies can do to debunk any companies saying they "can't afford to pay" or "about to go bust" is to use Linkedin to see how active they are on their company page. IE: If they are hiring, then that's hardly the actions of a company in financial trouble.

As an "out of the box thinker" I really love that quote from Albert Einstein "the definition of insanity is doing the same thing over again and expecting a different outcome". And what I mean by that is constantly update and change your strategy of how you are getting paid.

If you haven't reviewed your Late Payment clause in your Client Agreement then do so now. And if you need our Late Payment Best Practices PDF, then do let me know and I can email it over.

Additionally, don't hesitate to reach out to our friendly, knowledgable team to discuss any late payment issue, we're here to help.