4 ms·

> Try to focus on the kinds of customers you won't ask for down-payments and up-fronts --- the kinds of customers who will routinely delay a full quarter or two

by 8note 4y ago

> Try to focus on the kinds of customers you won't ask for down-payments and up-fronts --- the kinds of customers who will routinely delay a full quarter or two on payables, and you'll put up with it, because they're paying for several people's salaries, and the people you work with there don't control the accounts payable people to begin with. Can't you just volunteer for these companies instead? If the need free work so they can get their employees to do something useful and pay for it, and you want them paying their employees instead of you as a contractor, you can be straight up about giving away your labour, instead of pretending that they're going to pay you as your customer If you're giving stuff for free on purpose, just give it away for free

tptacek 4y ago
I don't follow. The companies I'm describing are likely to be your most lucrative clients.
- 8note 4y ago
  Looking in from geophysics, 3/4 lucrative customers for the 1 non-paying is not sustainable. If you're looking for customers that don't intend to pay, is it 1/5 that end up paying well? 1/100? 9/10?
  - tptacek 4y ago
    I don't know who the "non-paying" customers are. Don't do business with companies that might not pay.
    - chaosite 4y ago
      When you say "delay on payables", do you mean not paying you for agreed-upon already-completed work, or do you mean not giving you new work right now?
      - tptacek 4y ago
        I mean that some of your most lucrative clients will take forever to pay out invoices.
        Lutger 4y ago
        This is often deliberate. Postponing payment of invoices means you have at any given time a larger warchest to invest and gain an edge, or conversely have to pay more interest. CFOs often set a target and push back on swift payments. Some companies even risk lawsuits to be able to not pay the bill just yet, though it obviously depends on context what you can get away with and what harms your reputation too much.
        ensemblehq 4y ago
        This is just how large enterprises work. Nothing deliberate. They operate in longer cycles.
      - WastingMyTime89 4y ago
        To give you an extreme example, I have worked as part of a team of consultants for various state owned companies in the past four years. They take up to six months to clear your payment but I have never ever seen them not pay and once you are in both the bureaucracy and the environment are so complex that given onboarding costs you get a steady amount of work for years.
  - JamesBarney 4y ago
    He's saying large companies that have money will pay you even if it's late. If you're doing work for Johnson and Johnson they are going to pay you. If you're doing work for John the attorney they might. So look for work for Johnson and Johnson.
csomar 4y ago
You don’t get it. Some companies (bigger ones) have their accounting department operating independently from their development/IT department. This is not the case for small businesses which the OP is softly suggesting not to work with. Clients with such departments will pay if your invoice is approved. The payment process is disconnected from the team you’ll be working with. It also happens that the team you work with will not care with the costs since it’s not coming out of pocket directly. The finance team, which will pay you, has no idea what you are doing exactly except that you are authorized for the payment. The process is slow, so bear with it and price for the delay of the funds. But if you are a regular, it’s a constant flow. Small businesses where the decisions making, IT and payment (ie: director of tech is also the CEO, is also paying out of pocket) will scrutinize much more on payments, and also miss a payment if they can (a surprising amount of people will try to do this).
- michaelt 4y ago
  > The process is slow, so bear with it and price for the delay of the funds. Every large company actually has two parallel ways of paying. There's a main procedure which is extremely slow, because getting a 6 month interest-free loan from your suppliers is free capital, and maybe the supplier will forget and you won't need to pay at all which is free cash, and to access these benefits all you need is a smaller accounts payable department. They will be overjoyed to not pay you because you didn't submit form AB-1234 confirming that you have a policy on modern slavery. And they absolutely will not chase you for that form. Then there's a parallel procedure, where your contact asks their boss's boss's boss's boss and the bill gets paid by credit card within the hour. Having a reasonable amount of flexibility is fine - but at any time that friendly, helpful, trustworthy contact you're working with could change jobs, the project could be cancelled, or the project could end successfully and all your contacts get reassigned. You don't need to extend so much credit that you'd be put in a difficult financial situation were they not to pay - if the client has reached their credit limit, and they are late on payments they're contractually obligated to make, you just need to get your contact to trigger the fast procedure instead of the slow one.
  - csomar 4y ago

by 8note 4y ago

tptacek 4y ago

I don't follow. The companies I'm describing are likely to be your most lucrative clients.

8note 4y ago
Looking in from geophysics, 3/4 lucrative customers for the 1 non-paying is not sustainable. If you're looking for customers that don't intend to pay, is it 1/5 that end up paying well? 1/100? 9/10?
- tptacek 4y ago
  I don't know who the "non-paying" customers are. Don't do business with companies that might not pay.
  - chaosite 4y ago
    When you say "delay on payables", do you mean not paying you for agreed-upon already-completed work, or do you mean not giving you new work right now?
    - tptacek 4y ago
      I mean that some of your most lucrative clients will take forever to pay out invoices.
      - Lutger 4y ago
        This is often deliberate. Postponing payment of invoices means you have at any given time a larger warchest to invest and gain an edge, or conversely have to pay more interest. CFOs often set a target and push back on swift payments. Some companies even risk lawsuits to be able to not pay the bill just yet, though it obviously depends on context what you can get away with and what harms your reputation too much.
        ensemblehq 4y ago
        This is just how large enterprises work. Nothing deliberate. They operate in longer cycles.
    - WastingMyTime89 4y ago
      To give you an extreme example, I have worked as part of a team of consultants for various state owned companies in the past four years. They take up to six months to clear your payment but I have never ever seen them not pay and once you are in both the bureaucracy and the environment are so complex that given onboarding costs you get a steady amount of work for years.
- JamesBarney 4y ago
  He's saying large companies that have money will pay you even if it's late. If you're doing work for Johnson and Johnson they are going to pay you. If you're doing work for John the attorney they might. So look for work for Johnson and Johnson.

csomar 4y ago

You don’t get it. Some companies (bigger ones) have their accounting department operating independently from their development/IT department. This is not the case for small businesses which the OP is softly suggesting not to work with. Clients with such departments will pay if your invoice is approved. The payment process is disconnected from the team you’ll be working with. It also happens that the team you work with will not care with the costs since it’s not coming out of pocket directly. The finance team, which will pay you, has no idea what you are doing exactly except that you are authorized for the payment. The process is slow, so bear with it and price for the delay of the funds. But if you are a regular, it’s a constant flow. Small businesses where the decisions making, IT and payment (ie: director of tech is also the CEO, is also paying out of pocket) will scrutinize much more on payments, and also miss a payment if they can (a surprising amount of people will try to do this).

michaelt 4y ago
> The process is slow, so bear with it and price for the delay of the funds. Every large company actually has two parallel ways of paying. There's a main procedure which is extremely slow, because getting a 6 month interest-free loan from your suppliers is free capital, and maybe the supplier will forget and you won't need to pay at all which is free cash, and to access these benefits all you need is a smaller accounts payable department. They will be overjoyed to not pay you because you didn't submit form AB-1234 confirming that you have a policy on modern slavery. And they absolutely will not chase you for that form. Then there's a parallel procedure, where your contact asks their boss's boss's boss's boss and the bill gets paid by credit card within the hour. Having a reasonable amount of flexibility is fine - but at any time that friendly, helpful, trustworthy contact you're working with could change jobs, the project could be cancelled, or the project could end successfully and all your contacts get reassigned. You don't need to extend so much credit that you'd be put in a difficult financial situation were they not to pay - if the client has reached their credit limit, and they are late on payments they're contractually obligated to make, you just need to get your contact to trigger the fast procedure instead of the slow one.
- csomar 4y ago