You’re not a bank. You can’t grow a healthy bookkeeping business allowing clients to pay you when they like.

I’ve lost count of the number of bookkeepers I have spoken to who allow their clients to pay them when they like. And unfortunately some don’t pay at all before they go into liquidation. A mistake I made several times. Sometimes we are own worst enemy though. I spoke to a bookkeeper this week who has allowed her client to rack up a ,000 debt to her! It was a rescue, they are nice people and they were desperate to get on top of their situation. She got caught up in the whole thing because she connected with their mission and wanted to help. Besides, she’s a nice person and didn’t want to seem to be money-hungry. So she made sure everyone else was paid and allowed her bills to accumulate.

It’s interesting how we often create meanings which aren’t the truth. We sometimes associate asking to get paid for work that we’ve done as “money-hungry” and if we do insist, it’s our fault that the client is struggling financially. The reality is that everyone expects to get paid after they’ve done a job. Do you think your client would work for nothing?  And if your client is struggling financially it’s not because of your bookkeeping bill. If anything, for the first time they are getting reliable information which will give them the opportunity to make the necessary changes to turn their business around. Heaven forbid if you actually ask to get paid in advance for rescues!

There’s two ways you can learn – the hard way or the easy way. You can wait until someone doesn’t pay you and then insist that you get paid upfront for rescues or you can learn from people who have already made the same mistakes. Does that make you money-hungry? No. It demonstrates that you respect yourself and your time. If you don’t do that how do you expect your clients to?

Love to hear your thoughts.

8 Responses to You’re not a bank. You can’t grow a healthy bookkeeping business allowing clients to pay you when they like.

  1. All too true Debbie. In a past life while working for a client on contract I became their largest creditor when the cash flow became very tight over an extended period. It all worked out in the end but it got fairly stressful as time went on.

    I fully support the concept of up-front payment for “rescue jobs”. If the client has let their processing get to this point then they cannot have any clear idea of the financial health of their business.

    In the case of regular practice work each bookkeeper needs to consider and set their own credit policy then act on it whenever a client falls behind with their payments. We’re not only bookkeepers but business managers as well and that means that sometimes we have to do those tasks that we’d rather not do – like chase clients for overdue payments.

  2. Having learnt the hard way also, I now bill a block of hours in advance for rescues, i am paid upfront and no-one with a rescue has queried that at all. They are usually keen to have work done and having paid are then pleased with the end result.

  3. Thank you so much for these wise words. It is nice to know that there are others who have had the same issues as me.

  4. Having heard you mention this before Debbie I took matters this financial year to really bumb my prices up and then offer 10% discount for payment within 14 days (which are my terms). I also have a standard letter that gets sent out to clients should their account go over 45 days. The times I have sent the gentle reminder all payments have been made within a couple of days with many appologies.

    I have found the above had really helped my cash flow and for those that do not pay on time well at least I am getting paid extra for waiting.

  5. Many thanks for this wisdom Deb. I am taking that wisdom with great delight – thanks for learning the lesson for me – much appreciated!!

  6. Good advice Debbie and I too have learnt the hard way. I have also had clients who have seen my fees as the reason for their worsening financial position (as they are just a small business) but they have chosen to ignore the advice/assistance given. My worst bad debt was incurred by a real estate agent who always had ‘a settlement’ next week and could pay – only consolation is he also shafted his wife and daughter who had put money into the business – I had little chance.
    You comment on becoming caught up in the client’s mission of recovery. That is when they come to us! Our sales territory is rural area where we know our clients (and their clients) socially as well as professionally – not as easy to draw the line as in a metropolitan area – I am not making excuses just offering another point of view on becoming too involved.

  7. Unfortunately, I too have been caught out by a client owing me payment for months of work and believing their story that it will all work out and I will be paid, but that never happened. It is a really good policy to have rescue jobs paid upfront and one I have now put into place. In the past I have had many bad paying clients and it is true what you say Debbie, you need to value yourself or others will not. But as they say ‘A mistake is worth making if you learn from it’. And it is nice to know you are not alone.

  8. Totally agree with your comments Debbie. I have all rescue work paid up front in 10hr lots. This removes any stress from myself and ensures that I can pay my outgoings. All duties are clearly stated in engagement letters, with amendments made as they become necessary. The client relationship begins from a position of respect and clarity.
    It’s important that we value our time, expertise and investment we have made in our own education. This is infectious, synchromatic and flows onto our team and those we do business with. Anyone who wants to “cut through” your clear guidelines and map out their own form of chaos then “dump” it on you is not worth it!