When Clients Take a Long Time To Pay

If you’re a business owner or independent contractor, you’ve probably dealt with clients who fail to remunerate you in a timely manner. It can be awkward.

Of course, you’d like your late-paying client to expedite the payment you’ve earned. On the other hand, you don’t want to alienate someone who might otherwise have been inclined to retain your services again in the future, and perhaps tell h/er friends and associates how exemplary your work was.

How can you encourage clients to make timelier payments without sounding overly pushy, souring a professional relationship, and potentially undermining your reputation?

Agree in advance on a payments system that is convenient for the client.

You’ll probably find that different clients have their own preferences with respect to payment methods. Some may favour writing cheques, others may be more comfortable with PayPal, bank transfers, credit card, or even in-person cash transactions.

Set up accounts with multiple secure payment processing services and through your bank. If the client can choose among several payment options, s/he is likely to find one that is convenient for h/er.

Expect to receive payments late, and plan ahead.

As a general rule, you shouldn’t depend on timely payments from invoiced clients. Instead, try to keep a fairly robust cash reserve on hand to cover your own short- and medium-term expenses.

Although you want to encourage all clients to pay on time, realistically you’ll almost certainly encounter laggards here and there. One way to compensate for this is to request payment on a date well in advance of the time when you actually need the money—if possible, leave a margin of at least ten days.

Remember: you’re unlikely to suffer significantly negative consequences from being paid earlier than you expected.

Be clear and specific about when you expect to be compensated.

“Payment on this invoice is due within 20 days” as opposed to “Payment due upon receipt.” (In the latter case, your client could invoke the phony excuse that s/he received your invoice late.)

The clearer and more comprehensible the instructions, the less of an excuse the client has for failing to follow them.

Consider an early-bird discount.

No one enjoys wasting money, and by offering your client a slight discount for early payment, you introduce a direct economic incentive in favour of timelier compensation. Even a discount of one or two percent can provide your client sufficient impetus to get the ball rolling sooner.

Alternatively, you could institute a penalty of one or two percent for late payment.

Send cordial reminders.

If a week or more has passed since the deadline you originally established for payment, it’s reasonable to send the lagging client a gentle reminder, indicating that you would appreciate being compensated for your work as soon as reasonably possible.

Withholding of services is a drastic, but sometimes necessary, step.

You won’t need to resort to withholding services in the vast majority of cases. However, you may encounter a handful of situations in your career where there is simply no reasonable alternative. Your client has failed to pay up despite numerous polite reminders, and you need to draw a line in the sand. 

Your skills have value in the marketplace, you can’t afford to work for free, and you don’t want to garner a reputation for being overly lax on clients who refuse to keep their end of the bargain.

Dealing With an Unproductive Colleague

Among the most common complaints that employees of large organizations and co-founders of businesses express, involve a colleague or associate who doesn’t seem to pull h/er own weight.

This situation can become especially awkward if the aggrieved party and the espied slacker share equal authority within an organization. The reason for this is straightforward: bosses have the authority to keep under-performers in line, and to dismiss them if the problem persists. But staff members and associates who occupy the same position in the organizational hierarchy as an alleged slacker don’t have this luxury, and face a multifaceted dilemma.

Is it better to confront the offending party, or try to ignore the issue? Face to face, or by reporting the problem to superiors or other colleagues? What about the risk of being labeled a tattle-tale, the potential strain on interpersonal relationships, or even the prospect of retaliation? What if it becomes one person’s word against another’s?

How does the perceived slacker’s underperformance affect you?

The answer to this question will determine whether it’s worth your time and energy to actively address the problem.

If the behaviour of the alleged slacker affects your work and professional relationships very little, or not at all, then you’re better off minding your own business. On the other hand, if your ability to complete job tasks and/or your rapport with colleagues and superiors suffers due to an unproductive colleague, then you have a legitimate concern and should take action.

Once you resolve to act, your first step (barring extraordinary circumstances) should be to address the matter directly with the perceived slacker.

Start by favouring diplomacy over confrontation.

Even if you suspect your colleague’s lack of productivity owes to laziness, don’t assume that. Your colleague may be experiencing a legitimate mental health issue, may be distracted by difficult conditions in h/er personal life that are beyond h/er control, or may have an easily resoluble gap in h/er skill set that is slowing h/er down.

 

Instead of adopting a confrontational tone, try approaching the issue tactfully at first—e.g. “Is everything OK? I’ve noticed that you seem less engaged with this task than you normally are.” Then ask if there’s anything you can do to help. The “slacker” may call your attention to a factor you hadn’t considered that changes your perception of the problem. Be prepared to afford h/er the benefit of the doubt.

This exchange also gives you an opportunity to clarify exactly what you expect from your underperforming colleague, and ensure that you’re both on the same page.

Use impersonal, non-accusatory language, and cite specific examples.

Outward hostility on your part can cause your interlocutor to shut down or become defensive; you’ll effectively sabotage the conversation right at the outset. Pay close attention to the language and tone you use.

Instead of leading with “When you do (or fail to do) X, it makes me Y,” go with something like “Last week, this (specific event) happened, and consequently I had to remain at work late in order to complete some unfinished tasks. That experience was frustrating and unpleasant for me.”

Don’t make the conversation any more personal than it needs to be. Ultimately, the issue is not your colleague’s personality or character; it is h/er behaviour, which consists of identifiable actions and omissions. Keep a documentary record of these, and of your own efforts to improve the situation, so you can be accountable and transparent.

Don’t involve your boss or higher authorities unless you have to.

The capacity to deal with relatively minor, day-to-day differences of opinion in a constructive manner is a valuable skill. If you are an employee or middle-manager, don’t involve higher-ups in a “slacker” case unless you believe the problem is too serious for you to solve on your own.

Addressing a colleague’s underperformance directly with that person has two big advantages over reporting to higher authorities right away: 1) it is friendlier and more conducive to an amicable working relationship moving forward; 2) it shows that you are prepared to take initiative and demonstrate leadership in dealing with interpersonal conflict at work.

If you and the “slacker” are joint founders of a business, it is even more essential for you to confront the issue head-on rather than let it fester.

Best Practices For Firing Someone

It’s a conversation almost no one enjoys having: a member of your staff has fallen short of

expectations, and you’ve decided to let that person go.

With notable exceptions—including a certain U.S. presidential candidate and former reality TV star—many employers favour a gentle, tactful approach to firing. After all, people rarely enjoy being bearers of bad news, especially the kind that can dramatically alter an individual’s life. Nonetheless, clarity and assertiveness are crucial when it comes to firing. No wonder some companies prefer to rely on independent HR consultancies for “termination assistance”!

Be fair and transparent, and maintain a documentary record.

For both legal and ethical reasons, you should establish consistent ground rules for every person you hire, including your organization’s termination policy. If you are having difficulty with an employee, raise the issues you’ve identified in one of h/er regular performance reviews, or arrange a meeting to discuss the matter. Keep a detailed documentary record at every stage of the process. If you see no improvement in the employee’s performance over time, then dismissal may become necessary.

Double-check with the HR department (if you have one).

HR can help provide information about extenuating circumstances the employee faces, or any other relevant details that could influence both your decision and the timing. An HR professional can also provide general support, and be present in the room during The Talk. (If nothing else, it sometimes helps to have company and moral support on such a weighty occasion.)

Once you’ve made a final decision, don’t delay.

It may be that you’re indecisive about firing someone, and you’d like to give that employee an opportunity to redeem h/erself. But once you’ve reached a final decision to dismiss a member of your workforce, and you know deep down that you won’t change your mind, avoid the temptation to dither. The longer a person who isn’t up to the job stays with your organization, the more harm s/he may do, and the more extra work s/he will probably generate for your other staff.

Identify a confidential venue for the conversation (like a conference room or private office), and then get on with it.

Get right to the point.

When everyone (you, the employee, and the HR professional) is seated and paying attention, announce your decision up front, followed by your reasons. You can soften the blow slightly by formulating the statement like so: “I’m afraid I have some bad news: we’ve decided to let you go, because...”

At this point, it’s possible that the employee may attempt to bargain, or become combative. You can express regret about the situation, but avoid the temptation to become defensive, hesitate, or engage in a verbal joust. You’ve made this decision because you believe it’s in the best interests of your business, and it’s final.

Address any technical questions the ex-employee has.

There may be concerns around severance, unused vacation days, or other matters you hadn’t considered yet.

Be kind. If you believe the ex-employee’s potential lies elsewhere, offer to help.

For long-term employees in particular, being fired is a traumatic experience: it can damage their self-confidence, entail the severing of personal and professional relationships, and result in loss of income and abandonment of plans. It is appropriate to show compassion for people facing such circumstances, especially when you are the proximate agent thereof.

Sometimes a staff member who shows talent and potential in certain areas just isn’t the right fit for the position s/he occupies at your business. If you simply can’t find a place for that employee in your organization, you can still offer to ask around or provide a reference.

Parting on amicable terms isn’t always a realistic possibility, but it certainly makes for more pleasant professional relationships down the road.