Can stupid invoicing lose a client?
The simple answer is yes and here’s why
A client of mine has appointed a new CEO. My client is in good financial shape and does not at present use financing but they have some large corporate clients who are sluggish payers. Nothing new there of course
Most of their work is short term projects which have to be completed at various stages before payments are made. Nothing unusual about that
My client was frustrated with one particular client who habitually paid 120 days rather than 30 and the CEO thought he had a solution
He would bill the whole project upfront without any prior agreement with their client. And then demand payment
Naturally enough the cash conscious corporation receives the invoice and of course it generates questions, disputes and consequently frustration with the time wasted by this entirely unnecessary dispute. You can imagine the whole issue going from pillar to post and annoying everyone concerned.
Debtors simply do not pay upfront for projects unless they are in a firm agreement to do so. Is that difficult to understand?
Also an upfront payment is a credit risk for the debtor. Anyone signing it off is taking a financial and possible career risk too
The supposedly experienced CEO (check the CV is my advice..) has created three issues
- He’s created unnecessary work for the client
- An impression has been generated of a needy cash flow issue
- He’s treated the client like they are idiots
Will they lose this business? I have no idea but its fair to say that they have not made retention easier
Will my client lose their CEO?
I think they should
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