How long do you give clients to pay? When I set up my consulting contracts, I specify that payment is due at key milestones. I take a certain amount upfront and, depending on the size of the contract, I invoice about every two weeks or at key delivery points. However, I don’t give clients 30 or 60 or 90 days to pay…unless they’re prestigious "brand name" clients, such as a Fortune 100 technology firm that told me, up front, that they’d take net 90 days to pay.
But, for the most part, I expect clients to pay right away. I will delay further work if payment is late. And I charge interests rates that compete with any department store credit card. I also take up to 50 percent as a deposit on my consulting fees.
As a result, most of my clients pay me within a week or two. One of my clients often pays the entire amount before we even start the project.
I’m not a bank. I avoid extending credit to customers. Besides, when I’m firm about my rates and payment terms, I signal that I’m running a business.
How long do you give clients to pay?