The Back Up Plan When Payments are Slow or Non-existent

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There have been times I have breathed a sigh of relief to say hello to Monday. Why? Because if you run a business you know as well as I do that some days, weeks, months can be tough. Monday's always seem like a new beginning for me. 
One week one of our big clients was days late paying on a 45 day net payment. Our clients privacy is paramount so I will not ever  share their identity. That late payment really put a dent in planning. The wheels kept turning but it was really tight.
That client has paid late often. Once they started to pay late it become difficult for them to get back on track.

Here is the Back Up Plan I Came Up With

• The first thing I did was update my return and late payment policies. I had them in place but I improved the wording and added them to all my invoices and other billing platforms.
  

Note: The key is to stick to them once they are in place. If you change them for one person and then not for another, it can damage your business reputation.

• The client that was late provided a large part of my revenue. It was scary to think that I may have to let them go. I had to decide if the late payments were due to  issues that would even further delay or terminate payment. I contacted a account specialist at the company and told them my concerns. They reassured me that it was due to contract issues with their vendors. With that in mind I sent the company an email stating that I would stop providing service  after payment was 5 days late and not continue until the bill and late fee were paid in full. Working at a lose is not running a smart business.  I compared other late payment policies by various companies and they varied greatly.
  

Note: It is up to you to figure out the maximum you could afford to lose if the client did not pay at all. If you can not afford to do the work at all without payment then don't. You make the rules unless you are under contract that specifies otherwise.

• The one thing I did not have was a line of business credit. I am shopping around for a good business credit card and/or a bank line of credit. This will be my back up capitol until my business has more saved to work with. If anyone has any suggestions please let me know.

How do you make it through the slow money times with your business and your life? What are your back up plans? Please share them in the comments and help other readers weather the storm.

Karen, The Delivery Diva

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