How to deal with late paying client who has cash flow problem



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Registration : 27 May 2008
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I've previously posted asking for advice in dealing with a regular client that I invoice monthly and always pays late. In the end I gave up trying to get them to pay on time as they always paid eventually, after some hassling and a week or two overdue.

This time they are a bit later than they usually are, and after some hassling and ignored emails, they have admitted to me that they simply don't have any money at the moment, saying they will pay as soon as possible, hopefully in another week. They told me they aren't in danger of going under but are merely waiting on a few big payments themselves.

I want to ensure I get paid ASAP, because (a) I need the money now, and (b) in the event they do go out of business, I want to have been paid. With this in mind, it seems like a good idea to start threatening late payment fees and/or debt collectors.

On the other hand, I don't want to sour the relationship, as I want their continued business, and am therefore minded to meekly put up with the delay. But if I don't give them much grief about it, they may put me to the back of the queue.

How best to deal with them?

And is it a very bad sign that they have cash flow problems (does it frequently presage bankruptcy) or is it not such a big deal? They are big enough that they must have a turnover of several million so I am surprised they can't pay me the few hundred pounds they owe.

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