TiedemanLLC
01-31-2012, 03:41 PM
Imagine you have a dog, that has been with you since the beginning. You are nice with the dog, play with, and let it go out to run. It seems like more and more that you let it outside the dog takes longer to return to the house. You are tired of the dog running off over and over again. You have had enough. Finally, one day you let the dog out of the house, but the dog doesn't realize you have installed an electric fence. He starts to run off again, and then "ZAP!!!!". He runs into the electric fence that he was never used to. He was used to running freely, and doing whatever he wanted to and coming back to the house whenever he felt like it....until today. You finally put your foot down, and decided to restore some decipline.
So what does a dog have to do with business? Well, I finally put my foot down with a client of mine (has been a client going on about 12 years) in regards to his choice of when to pay his invoice.
This client has been around since the beginning, and is a full service client. Lately though he seems like he has been taking advantage of our long standing relationship and my lenient payment terms with him.
Before we get into any more detail, I will spell out the payment terms. All invoices are due within 21 days. If the payment has not been received on the due date a phone call, email, or past due notice is sent to the client. If still no payment is received after 7 days past the due date, a late fee is charged, and we can shut down all service until paid in full. It's in our contract, and spells it out exactly on the invoice. After 60 days we send it to collections.
Now back to the client...the last three years it has been horrible with the amount of times he has been late. He is normally 3 days to one week past due, all the time. Last year we actually got into a yelling match because he said we "keep on dropping the ball with snow plowing" in which my reply was "if you want to talk about dropping the ball, how about you never paying your bill on time"
The last few months I have to send him reminders of his invoice due date is upcoming. It's like I have to babysit him. I have never charged him a late fee or ever stop service with him. I feel like he knows I value him as a client, so he has been taking advantage of me. With it being a start of a new year, we have started to get firm in holding our clients to these late fees and stop in services.
So of course his invoice was due on the 22nd of this month. I send out an email on the 19th informing him that his invoice was coming up due. Didn't hear anything or receive a payment. Then the 23rd rolled around (since the 22nd fell on a Sunday I would wait until the Monday), didn't hear anything and no check in the mail.
This is where it gets interesting. I head up north to do some snow mobiling and we received a 3 inch snow storm on the 30th back at the business location. I left my wife in charge of the office, in which she called up the subs to fill in for me since I was 4 hrs away snow mobiling. She informed the subs "do not do Mr. Smith's (named changed)" Later in the evening when I call up my wife to check up on the snow situation she informs me that she tells the subs not to do his snow plowing. Which I was perfectly happy with, and I told her she did the right thing.
I get back home, and decide to call up the client the next day
"Mr. Smith, your payment is 9 days past due, and I would like to do your snow removal today for you but until you pay your bill I won't do it. We are cracking down on clients that are late paying their bills by stopping service until paid in full."
"Is that why my snow hasn't been done yet, because I haven't paid my bill? We have had a long standing relationship, and you pull this. This really p*sses my off!" Mr. Smith says.
"Mr. Smith, I have sent you notices warning you about the bill upcoming, and also after the due date. I am babysitting you enough, that we are done doing this anymore. If you don't pay your bill, then services will be stopped"
The phone conversation basically ended, and that was that.
But the lesson is, don't let your dog run off too far. Maintain order, rules, and discipline. Because if you don't, one day you you will have to install an electric fence, and he will get a "ZAP!" that he never expected.
So what does a dog have to do with business? Well, I finally put my foot down with a client of mine (has been a client going on about 12 years) in regards to his choice of when to pay his invoice.
This client has been around since the beginning, and is a full service client. Lately though he seems like he has been taking advantage of our long standing relationship and my lenient payment terms with him.
Before we get into any more detail, I will spell out the payment terms. All invoices are due within 21 days. If the payment has not been received on the due date a phone call, email, or past due notice is sent to the client. If still no payment is received after 7 days past the due date, a late fee is charged, and we can shut down all service until paid in full. It's in our contract, and spells it out exactly on the invoice. After 60 days we send it to collections.
Now back to the client...the last three years it has been horrible with the amount of times he has been late. He is normally 3 days to one week past due, all the time. Last year we actually got into a yelling match because he said we "keep on dropping the ball with snow plowing" in which my reply was "if you want to talk about dropping the ball, how about you never paying your bill on time"
The last few months I have to send him reminders of his invoice due date is upcoming. It's like I have to babysit him. I have never charged him a late fee or ever stop service with him. I feel like he knows I value him as a client, so he has been taking advantage of me. With it being a start of a new year, we have started to get firm in holding our clients to these late fees and stop in services.
So of course his invoice was due on the 22nd of this month. I send out an email on the 19th informing him that his invoice was coming up due. Didn't hear anything or receive a payment. Then the 23rd rolled around (since the 22nd fell on a Sunday I would wait until the Monday), didn't hear anything and no check in the mail.
This is where it gets interesting. I head up north to do some snow mobiling and we received a 3 inch snow storm on the 30th back at the business location. I left my wife in charge of the office, in which she called up the subs to fill in for me since I was 4 hrs away snow mobiling. She informed the subs "do not do Mr. Smith's (named changed)" Later in the evening when I call up my wife to check up on the snow situation she informs me that she tells the subs not to do his snow plowing. Which I was perfectly happy with, and I told her she did the right thing.
I get back home, and decide to call up the client the next day
"Mr. Smith, your payment is 9 days past due, and I would like to do your snow removal today for you but until you pay your bill I won't do it. We are cracking down on clients that are late paying their bills by stopping service until paid in full."
"Is that why my snow hasn't been done yet, because I haven't paid my bill? We have had a long standing relationship, and you pull this. This really p*sses my off!" Mr. Smith says.
"Mr. Smith, I have sent you notices warning you about the bill upcoming, and also after the due date. I am babysitting you enough, that we are done doing this anymore. If you don't pay your bill, then services will be stopped"
The phone conversation basically ended, and that was that.
But the lesson is, don't let your dog run off too far. Maintain order, rules, and discipline. Because if you don't, one day you you will have to install an electric fence, and he will get a "ZAP!" that he never expected.