I have a customer that's getting slower and slower to pay. The customer used to pay in 14 days, then 21. Now at day 21 they make me 'request payment' and it takes another 3-4 days for the funds to come in. Should I separate myself from them? It's not a big part of my income but I'm wondering if they're in financial trouble and I may not get paid one day.
What you are seeing is a pattern for a business that is experiencing a cash flow issue and ultimately will go out of business as suppliers will move them to prepayment or COD.
One solution to protect your business is to accept a credit card for payment of the invoice within 7 days and let them manage their cash flow challenges behind the scenes with their issuing bank.
The other option is to offer prepayment and if they are not in position for that then I would no longer sell product/services.
Sometimes it takes one supplier to force the inevetible, but you have to protect your business and resources as well.
Answered 7 years ago
Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.
Already a member? Sign in