Speaking from experience, Net 10 is totally unrealistic, unless you're working for one of those contracting, body shops...in which case, you're really just an employee of the body shop. Also, ProTip: the bigger the company, like say fortune 500, if you're truly freelancing/building your own business, hired directly, it's very common to get paid Net 90 (quarterly).
Edit: I should add, that if you're doing freelance for a small/start-up-ish/mom-and-pop company, it might be beneficial to get some form of retainer to do some work if you can negotiate that. Or, just stay away from this type of work all together if you can, as this is where I found most billing issues/collections in the past.
I'd also add, that I probably wouldn't hire a freelancer with a blog article like this on their site. It shows a lot of immaturity, lack of business acumen, and experience. Maybe things are different in Australia?
That was my immediate response - that 10% per week screams petulant and immature.
Yes, people paying late is bad, but it's also part of dealing with many large organisations. In cases I've seen the accounting department don't care what the local manager might have negotiated or even what the contract says, they'll pay when their (the accounting department) policy says they'll pay. They know that most people aren't going to risk their relationship with the company by charging interest or take legal action over what are relatively small amounts (next to the legal fees).
>> That was my immediate response - that 10% per week screams petulant and immature.
Totally agree that it screams of inexperience, and it's obvious that person lives hand-to-mouth. I pay my bills on time, and I would never hire that guy.
I always tell people starting contracting that they need about 3 months of "salary" in the bank, and a main portion of that is for cash flow coverage - in other words, the time it takes to collect on an invoice.
Having that 3 month float in the bank prevents you from taking every gig that comes your way. If, say, you're charging $100 an hour, don't take on customers who aren't used to paying that type of rate. The local business owner who is paying his staff minimum wage has little appreciation for the work you do. Chances are extremely good that he/she's going to nickel and dime you at every turn.
I've never not been paid for any contract work and haven't been negatively impacted by slow accounting (payment) policies because I always make sure I have enough of a float that allows me to choose my customers very carefully and not worry about the occasional late payment. I invoice net 30 and on longer projects, have a simple condition that I will stop work when an invoice is 60 days overdue.
If you really want to encourage early payment, then implement something like a 2/10 net 30, which is a 2% discount if the invoice is paid within 10 days.
Most larger corporations of a certain size would probably switch their agencies / suppliers / manufacturers over such a late fee construct. They'd laugh in his face and walk off. "Ah you have a problem doing business with us? We know 100 other companies that would LOVE to do business with us".
It's not unusual for larger companies to call for a 10% reduction after a couple of years. "Considering the size of our mandate, our generous contracts in the past, we think it would be appropriate for you to lower your prices in the future. By the way, last weekend I was at this cocktail party and my wife introduced me to John Lasseter. Doesn't he run ACME CORP, one of your competitors? Pretty funny guy that John... And smart!!!"
Of course you should never allow a business relationship to grow to a size where its rupture might impair the health of your company, but seriously, this isn't always possible.
Edit: I should add, that if you're doing freelance for a small/start-up-ish/mom-and-pop company, it might be beneficial to get some form of retainer to do some work if you can negotiate that. Or, just stay away from this type of work all together if you can, as this is where I found most billing issues/collections in the past.