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.
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).