Career Opportunities

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On Your Own: Part 4

© Douglas E. Welch 1997

To paraphrase a ?robber baron? from earlier this century, ?Money is just a way of keeping score.? This might be true, but to most of us it is also the way to keep food on the table. Just like the other business skills mentioned last week, anyone starting a new consulting business must understand the importance of billing and collections.
Collections rates #1 as both the most important and least favorite parts of running your own consulting business. If you fail to understand this, it will not be long before you are back working for someone else.
Hopefully your clients will be the type who pay on time, but there are a few ways to make payment easier for both them and you.

Get the check!
One of the easiest ways to insure that you get paid is to let clients know you expect payment at each work session. Having the check in your hand as you walk out the door completes the transaction while you are still face-to-face with the client. It doesn?t require that you go hunting for the person if they don?t respond to your invoice.
Inform each new client of this policy when you are setting up the original appointment so there are no surprises when you finish your work with them. It also pays to remind your regular clients of this policy on occasion.
Carry pre-printed, blank invoices with you to each call in case a client requires an invoice for payment. You can then quickly hand write the invoice, make a copy and receive your check. Give your clients every opportunity to easily pay you.

If you work for clients whose business practices cannot adapt to the method above then you will have to invoice them and wait for your payment to arrive in the mail. Smaller companies will often pay on receipt, but larger companies will often stretch your payment out to the somewhat acceptable limit of 30 days.
It is important that you develop a system to track invoices and remind you when they are overdue. Never let an invoice languish or you may find that the company has lost track of your invoice and will require you to submit another. Follow up on any late invoices with a gentle phone call. Normally this will trigger a payment from all but the most recalcitrant companies.
You will also need to build this payment ?float? into your financial plans. You don?t want to be caught with no money in your account and many outstanding invoices. Try to spread your cash flow over your entire business year by watching your invoicing and collections.

Never perform additional work when there is an outstanding, overdue invoice. You are in a position of power when a company needs your skills. Demand payment on these outstanding invoices first.
If you find clients don?t pay on time, don?t hesitate to break your relationship with them. Freedom to chose your clients is one of the benefits that come from working for yourself.

Douglas E. Welch is a freelance writer and computer consultant in Van Nuys, California. Readers can discuss career issues with other readers by joining the Career Opportunities Discussion on Douglas' web page at:

He can reached via email at