Getting Paid On Time - How To Keep The Relationship & Not Get Screwed

GASP!!!!!

The letter was ominous looking. The contents were even more chilling. With no warning a major client had unceremoniously gone into bankruptcy and we were stuck going to court to attempt to collect our outstanding invoices. What is worse is that loss is my fault. I broke my own rules and did the job on a handshake agreement and now I'm responsible for the consequences.

100% Responsibility

There's a little sign on the wall near my desk that reads 100% Responsible. About 25 years ago I ran across the philosophy from Hyler Bracey at The Atlanta Consulting Group. It's a deceptively simple idea - we are all 100% responsible for our organization's and our personal success and results. What that means is you can't expect your clients or customers to look after the best interests of your business. It's not their jobs … it's your job.

Why Companies Don't Pay Bills On Time

It's easy to imagine a greedy, dollar-driven super villain deliberately plotting to screw over suppliers. It may be a satisfying picture but in the vast majority of cases it isn't true. Things are tough and every company is fighting to stay in business so they build financial stability by getting money from customers sooner, paying bills at the last possible moment and building up cash to earn money from the float. Float is interest, etc. that you earn between receiving money and paying it. Of course there are some other reasons that are less sophisticated. Saying that it isn't easy getting some customers to pay bills on time would be like warning that you might see some tall guys at an NBA game. So what can you do?

Preventing The Problem

The time to worry about being paid is before you do the job. Don't be so eager to get some business in the door that you accept "Stupid Work." Take a moment to check out the company. Ask around, at least do a Google check. If it doesn't feel right, don't do it.

Ask about their payment cycle before you accept the job. Make sure you know the "rules." If the potential client starts to tap-dance it's a red flag.

Have a solid contract or work agreement. Please don't download one or use a generic contract from the office supply store. And don't even attempt to play lawyer and write your own. My attorney explained that he can spot an amateur contract at 50 yards and so can the worst lawyer in the graduating class. Do it right and hire a business attorney.

Put it in the contract. Define the scope of work; the terms of payment and what happens when financial and other contractual obligations are not met. Make the client's payment terms part of the work agreement.

Get money up front. Require a partial payment at the beginning of the project or order. Make sure this covers your key expenses and out-of-pocket expenses. 50% is not too much. If it's a rush job or something unusual ask for 100% up front and bill for overages later.

Have Sign Off sheets for each phase of the project. Ask the client to sign them and make sure they include an authorization for payment. What you are doing is establishing you own paper trail. More about it later.

Invoice immediately. I admit this is one of my biggest failings. I've been known to wait weeks, even months to bill after a job is completed. This is why I have an accountant. Don't wait until the end of the month (an antiquated 20th century idea), prepare the invoice in advance and send it 30 minutes after the job is completed.

Be Easy To Pay. Let them pay by credit card and PayPal ... the idea is to make paying you as convenient and painless as possible.

Don't discount thinking it will encourage quicker payment. They'll just take the 5% anyway. Discounts don't work. Instead of discounts, see the suggestion above.

Collecting

Okay, take a deep breath. What is the client worth today and long term? There are ways to collect without destroying the relationship.

1. Be personal - when the bill is due pick up the phone and call the client. Emails are too impersonal and can be deleted. Often a gentle reminder that the bill is due is all you need. Ask if there are any reasons that the payment is delayed.

2. Be persistent - be prepared to re-bill. You can include copies of the Sign Off sheets showing that the invoices are authorized.

3. Escalate - move up the food chain to Accounts Payable and ask if the invoice has been received and is being processed. Don't be confrontational but be sure to find out when the payment is scheduled. Get a name and an email address to follow-up.

4. Play Hardball - the last resort. Turn off the emotion. Don't threaten anything you are not prepared and capable of carrying out. At this point, the less you say the better. Don't mention legal action and let your attorney send a "get well" letter.

Depending on the size of the invoice and your State laws you are looking at Small Claims Court. If it's above the limit it's a civil suit. In a civil suit the court looks at the preponderance of evidence. That means you have to back up your claim with as much convincing evidence as it takes to prove what you say is true. This is where your paper trail pays off. Those Sign Off sheets are golden.

Gentle Persuasion

Here's my insider tip. If nothing works and you can't afford to sue, report them to Experian, TransUnion and Equifax as a bad debt. It costs less than $100 and corporations are very concerned with their credit ratings. A few years ago a major Fortune 500 company refused to pay a $750.00 invoice. After most of the things I suggested failed I reported them as a bad debt and forgot about it. About 9 months later I received a telephone call from one of top financial executives. The corporation can't have bad debts on their credit report. The bill was paid in a week. Don't be afraid to do the unexpected but don't cross the line. There are clear laws that define what you can and can't do to attempt to collect a debt. In short - be cool.

Getting Paid

An astonishing amount of work is performed with nothing more than a handshake agreement. It works … until it doesn't. Remember you are 100% Responsible for selecting your clients and getting paid. Don't apologize for being professional, having a legal agreement and wanting your money on time. If a client is late give them the benefit of the doubt and negotiate. More often than not the problem isn't the client it's how Accounts Receivable is processing invoices. Make the client your advocate and preserve the relationship. The big idea is to get paid and also get the next job.

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Please Subscribe! There's a new article every week and we are determined to give you valuable information you can use to be successful and make more money. So, go to the Be The First To Know box and just fill it in.

Andy Johnston is an multi-faceted communication professional with deep experience from strategic planning, to messaging, to marketing, to media, to events, to training, to creative direction … and there are several other ”to’s.” Andy is known for his energy, creativity and his unique ability to discover the key results that must be generated – and then to develop ingenious ways to engage and motivate audiences.

Pitch Like Jay Leno - Sell Your Ideas, Messages, Strategic Plans And Corporate Vision

The Perfect Pitch

"You cannot be mad at somebody who makes you laugh - it's as simple as that."

Jay Leno

The band rocks and people are on their feet. Jay Leno walks out and immediately starts shaking hands. He's connecting, interacting and setting the stage for the challenge he faces every show, hundreds of times a year. Even after 18 seasons headlining at NBC he is still doing the same thing you do every day. He's pitching ideas.

I don't care who you are, the president of the United States, CEO of the company, Chief Marketing Officer, director, manager, salesperson, producer or the host of a big-time network talk show - you are constantly having to sell your ideas. You have to get in front of the right people and make sure those people understand you well enough to act decisively.

All You Need Are Great Ideas

"There is no off position on the genius switch."

David Letterman

Coming up with a great idea actually isn't very hard. There are literally millions of fantastic ideas out there every day and tomorrow there will be a new crop. Doing something with the idea is hard … extremely hard. Before you even begin take a moment and inspect your "spark of brilliance." There is no point in trying to propose an idea that's not going to make a significant difference.

When It Works & When It Doesn't

Now imagine that you are a stand-up comedian. It's just you and the audience. You know very quickly if they are buying your ideas because they laugh. Somehow Jay Leno, David Letterman and Conan O'Brien make it seem effortless night after night. Comedy is serious business and each of these "top bananas" knows they have to sell their ideas fast. If you don't see yourself in first few moments of their shows you are gone in the click of a remote.

Two Realities Of Pitching Ideas

Presentations skills won't do it. Videos, PowerPoint, storyboards, gimmicks won't do it. You have to understand the Two Realities Of Ideas. Let me warn you, they are rough on your ego.

Reality #1 - It isn't your idea. Don't even think you own it. You can't sell "your" ideas. Make them the decision-maker's ideas. Focus on results and not on getting the credit. If it works the right people will know who came up with it. If it doesn't work then everyone will know who came up with it.

Reality #2 - Make them feel smart. You'll never sell an idea by making people "wrong." You don't want them to "agree" with you. You want them to realize that your idea "agrees with them." It fits into their way of thinking. You aren't there to impress them with your intelligent. You want them to feel very smart by seeing the value in the idea.

Learn From Leno

Ready to take center stage and become the headliner? It takes material, preparation and performance. Here's how to make it sizzle and not fizzle.

Bring Your "A" Material

They aren't buying you or your idea. They are buying all the things the idea will do for them. So describe it in the simplest terms. They have to understand it, see the value, personalize the value and appreciate the value. They don't need every detail.

Don't fall in love with your ideas or overestimate the benefits. Test the idea before you get there. Every comic tests her or his material before the big show. Don't fall into, "I came up with the idea all they have to do is make it work." It doesn't matter if your presentation and persuasion skills are in the Guinness Book of World Records a well-tested idea trumps you everytime.

Know The Room

Know the decision-makers or your audience. Play to everyone in the room and not just whom you perceive is the top dog. Take the time to explain in their language. If you think you are there to educate you are "shooting above the room."

Rock The House

I realize this may seem a little obvious but know what you are talking about. If the client or decision maker decides that you don't know them, their business or their challenges then the BS meter goes off and you are registering negative trust. Start strong and talk about them.

Don't wait until you start to set the expectations. When the "big three" step out you know what to expect. It's human nature to be uncertain about how to react and the people you are hoping to persuade are no different. Leno, Letterman and O'Brien are masters of setting up an audience. They let them know that it's okay to laugh. When you are selling your idea you want to set up the people on the other side and let them know that it's okay to question, comment, contribute and agree.

Always Leave Them Laughing

End with something memorable, your hook - the biggest "ah-ha" moment. Sum up the need that the idea solves or the opportunity it creates. Pinpoint the main advantages of adopting the idea or the potential loses of not adopting it. And explain why you think the idea should be adopted.

Will you always be a hit? Nope and neither are the "big three." Each one bombed a thousand times. But they can share one more lesson. Not every idea will be valued, believed and adopted. If your idea is rejected you still want to be accepted. That way you can come back again with another exceptional idea that will make a significant idea. Pitching ideas never ends.

"If you work really hard, and you're kind, amazing things will happen."

Conan O'Brien

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From time to time we feature the work of a talented illustrator to help catch your attention and make the point. Pat Bollin is a professional artist in Atlanta, Georgia who is incredibly versatile. From illustration, to caricature, to comics and even sculpture Pat does it all. There's a lot to see at www.patbollin.com. Please check him out.

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Please Subscribe! There's a new article every week and we are determined to give you valuable information you can use to be successful and make more money. So, go to the Be The First To Know box and just fill it in.

Andy Johnston is an multi-faceted communication professional with deep experience from strategic planning, to messaging, to marketing, to media, to events, to training, to creative direction … and there are several other ”to’s.” Andy is known for his energy, creativity and his unique ability to discover the key results that must be generated – and then to develop ingenious ways to engage and motivate audiences.

Sink, Swim or Drown - What's Your Plan B?

Stunned, Dumb & Motionless

It's a short trip from king of the world to the bottom of the sea. Everyone loves the idea of being flexible. Flexibility is an asset (insert bending palm trees, Cirque du Soleil or your favorite analogy) so why do we consider changing a business model or marketing plan a failure?

Hold on, I have a quick nautical illustration. My father is a former British navel officer - 88 years old and still alive and kicking. He once told me that the first people off a sinking ship had the greatest chance of survival. The people who clung to the rail until the last moment almost always drowned. The hardest decision a businessperson has to make is when to go to Plan B.

Markets change, consumers and customers change, competition changes and your own organization changes - but many, many companies have no Plan B!!! Can you afford to be a deer in the headlights?

Corporate Roadkill

Eyes wide, feet frozen to the spot and brain in pause it's almost like playing dead, except you're still standing in traffic and waiting for disaster. Wake up! You don't have the luxury of being inactive or reactive you have to be proactive. Plan A doesn't have to fail to signal that's it is time to jump out of the middle of the road. Sure the current marketing strategy may be working - BUT. It's the "but" that gets you. There is a strong tendency to delay any decision to change because of a secret hope that good things last forever or "it's going to turn around." Once you attain your desired results, once the performance begins to flatten out, when sales momentum begins to slow, at the first sign of weakness - go to Plan B.

But this is where rationalization steps in and people start to line up all those "buts" we talked about. Use your data and metrics and reevaluate. Don't use last year's standards to justify your decisions. Plan B has to be based on a different set of rules and assumptions. Draw the line and stick to it. If the current strategy or plan doesn't generate measurable results or increases in 60 days don't ride down to the bottom. Go to Plan B.

A Backup Plan Is A Sign Of Weakness

I love the John Wayne approach to leadership. Old John is in a foxhole and blew up the bridge behind his squad so they have no choice except to run headlong into enemy fire. You hear him say, "Failure is not an option. Developing a Plan B is just planning to fail so it's do or die and nothing else!" I'm sorry, it makes a great scene in a movie but I don't consider "do or die" a viable business model. I'd appreciate some creative thinking between the two extremes.

Develop it, think it through, budget it and establish a timeline. Put it all in writing and have it ready. The process of finalizing a Plan B gives you alternatives and options. I've actually seen clients like Plan B so much they rethought Plan A. And sadly I've seen more corporate leaders consider having a Plan B as a sign of weakness and indecision that would undermine the organization's determination and focus. That's a great macho move and almost criminal neglect for corporate responsibility and any sort of stewardship for employees and their families.

Always Have A Plan B

“The most successful people are those who are good at Plan B.”

James Yorke

In your personal and professional life your most important challenge is to decide what parts of your initial plan aren't working and then change them. Always have a Plan B that's as well designed as Plan A. And make sure it's ready to go. I hope you picked up on that; the time to develop Plan B is while you are developing your initial plan. Don't wait, don't substitute an outline, notes or rough ideas. You'll only dig yourself in deeper if your backup plan isn't ready when you need it.

How Do You Know When To Go?

1. Are your desired results still valid and attainable?
2. What parts of your current delivery system still work and which ones don't? The deliver system is the process you use to deliver whatever you are selling and the value it provides.
3. How has your customer or client's needs changed? They might not find you valuable anymore.
4. How has your customer or client's buying cycle changed? You may not be easy to buy or work with anymore.
5. Is the market shrinking or disappearing? This might not be the time to aspire to be the dominant player in the facsimile machine market.
6. Has the current strategy or plan generated measurable results or increases in 60 days? If it's flat-line or decreasing - there's a message here.
7. What's the worse that can happen?

What Will We Do If It Doesn't Work?

Have a Plan B to handle the worst. Developing a backup plan that you are confident will work makes it easier to make difficult decisions. At the first indications that the initial plan or strategy isn't working or is weakening - review Plan B. Update the assumptions to current data. Then you have clearer choices.

There Is Not A Step Called "Determine Why Plan A Failed."

Remember action is a critical factor. You have all the time in the world to analyze the failure after you have corrected the situation. Be decisive and act. Waiting until you have lost all your options and opportunities in the name of analysis only puts you back on the deck of the sinking ship.

So don't be a deer in the headlights … on the bow of the Titanic … as a semi-truck barrels down … on a giant iceberg. Okay, okay, what's your Plan B?

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Special Guest Illustrator

From time to time we feature the work of a talented illustrator to help catch your attention and make the point. Randy Albright is a commercial artist, muralist and illustrator in Spokane, Washington. Randy has a way of adding a unique personality to his work and the deer in the headlights are just a small sample. Take a look at www.randyalbright.net to find out more.

Scroll down - there's much more!

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Please Subscribe! There's a new article every week and we are determined to give you valuable information you can use to be successful and make more money. So, go to the Be The First To Know box and just fill it in.

Andy Johnston is an multi-faceted communication professional with deep experience from strategic planning, to messaging, to marketing, to media, to events, to training, to creative direction … and there are several other ”to’s.” Andy is known for his energy, creativity and his unique ability to discover the key results that must be generated – and then to develop ingenious ways to engage and motivate audiences.