One good rule of business that I’ve learned over the years is that you should take good care of your hard-earned money. Your clients won’t have more confidence in your services if you allow them to pay you only when you remind them of it. And in these times of economic uncertainty, I’ve decided to become even more proactive in this field.
For one good reason: we self-employed workers cannot count on State leniency (unless of course you’re prepared to go and plead your case, box of tissues in hand; but you need to be in a real pickle to do that, or to have a talent for bursting into tears at the right time: that can work if you’re female and the employee is male, I don’t know of other combinations that work). But in France, in the normal course of affairs, whether you are paying income tax, VAT, retirement, sickness and welfare contributions, business tax, local rates, miss a payment by 1 day, and you get a 10% fine. Been there, done that. So I know. Unless you are one of those businesses that you hear about on TV or the radio, that are allowed to owe the State huge amounts of money. I don’t envy them, but there sure is a double standard.
But now comes a time to be extra-cautious. I have a very simple Excel spreadsheet where I keep track of the bills I issue, and I’ve decided to go one step further. Outstanding bills are now highlighted in bright red, to remind me to send e-mail reminders on Monday, the first day of the month. And another one soon after, if they don’t respond with a definite date of payment.
Bills that are due some time in December are now highlighted in yellow. Some of them will get paid on the dot, because these clients have systems in place, and they pay on the day that they promised to pay. So I’m not really worried about these.
Client solvency is going to take on a lot of importance in the coming months. I don’t use credit, and if I do have to use my personal credit cards to fund some of my business, the interest doesn’t get expensed. I pay that out of my personal pocket, not out of my business.
So being a little more pushy may sound reckless. It isn’t. I can tell a prospective bad client miles away. For that reason, I suffered only 2 bad debts in the course of 30 years. One I didn’t see coming, because I trusted the person at the head of the business. This proves that I was wrong, because I never collected my money (the State, again, has priority over all the other creditors). The other debt was fixed through a simple and inexpensive first-level court procedure. Of course, I’m not counting delayed payments, some of which were due to red tape. One accountant had a really nice excuse, he had got married. I don’t know if he spent all those weeks honeymooning, but I duly congratulated him and asked for the payment, and got it promptly.
If my clients expect me to turn up and perform at their conferences, or to deliver a translation on the day that we agreed upon (set most of the time to accommodate their needs), they must be expected to pay on time, not lose my bills, not tell me lies.
If there can be no trust between us, we can’t do any business. It’s a simple as that.
But I’m always on the lookout for new ideas and strategies. Do you have systems in place to cope with this in the coming months?