If you operate as I used to operate - do the work, send the invoice - you can wait up to 90 days to be paid while your client merrily makes use of the product or training at your expense.
Canadian banks used to take five WEEKS to clear a US cheque. Add five weeks to 90 days and you've got a banker.
I do not operate a bank
I do not lend money (except to friends).
But when a client hangs on to what is rightfully mine, they have turned me into a bank, against my wishes.
What's the answer?
Operate in several different manners:
(1) Insist on a 50% deposit up front. That 50% should cover all your expenses and a bit more. If you have to walk away from the second 50%, you've still come out ahead of the game. A bronze instead of a Gold, but a medal none the less.
(2) Raise your rates for those clients. Ask for their payment schedules BEFORE submitting the proposal. Prime lending rate seems to be about 4.5%, so let's say 5%. Raise your rates 5% and incorporate that into your proposal. Yes, I know it's only for ¼ of a year, not a whole year, but you have to factor in your time as a book-keeper doing these extra calculations etc.
(3) Tie your Lifetime-Technical-Support into the payment. For me the Lifetime-Technical-Support accompanies every service, product or training that comes from me, but it doesn't kick in until the final payment is made and the cheque has cleared. Now you're still perturbed about waiting 90 days, but you need not invest any more time until the $5,000 is safely in the vault. And let your client know that just as they have their business practices carved in stone, so too do you.
Cheryl Scoffield : "Get a bank draft if the client is US based. Depending on how I am billing, contract employee or consulting, I get paid in advance 2 weeks to 1 month until the contract end date. The Monday morning the bank draft fails to hit my account is the Monday I take the dog for a walk!
"Money paid through a bank draft can not be clawed back. Cheques can bounce or a stop payment can be issued after you deposit. That means, if it is a large cheque, your bank account will be FROZEN!! ... all cheques start bouncing! Like your mother said, play safe. Get paid in advance."