The check is in the mail. Yeah right!

I’m sure I’m not alone when I say that outstanding invoices are one of the most frustrating aspects of owning your own business. Most of you in practice for yourselves can speak volumes on the frustration of weeks dragging on to months and repeated promises that the proverbial “check is in the mail.”

We’ve all been there.

In fact, this weekend, during a conversation with my long-time landscaper, he complained that one of my neighbors hasn’t paid him in nearly two years. TWO YEARS. My first question to him was why does he continue to service her lawn? I can safely say that after six months I would have cut my losses (pardon the bad pun) and try and recover what I could in small claims court.

But I digress.

I’m sure you’ve all encountered clients that are shall we say, a bit sluggish in opening their checkbooks. The alligator arms-deep pockets image will fit nicely here. For example, many CPA firms that I’ve spoken to will not send a client’s 1040 until they receive full payment. If they don’t then by law the preparer is required to return all documentation to a deadbeat client and wish them best of luck in completing it.

My preparer fortunately is a bit more liberal – his annual request is “pay me when you can.” Which I always do and have done for 27 years.

As you can imagine, we’ve encountered a number of the above-referenced situations. Sometimes, we’ve even been forced to take legal action. I have subsequently proposed to management that for those clients with, shall we say, sketchy payment reputation, we request a hefty amount upfront which would be credited toward any merger we help facilitate.

Then, there is always the situation when a client disputes the fee. That’s a primary reason we require them to sign an engagement letter which spells out in detail what they owe us should we successfully help them.

You would be amazed, or perhaps you wouldn’t how many claim after the fact “they don’t remember signing it” or that it was signed by a now-retired partner and that a new management team is now in place and therefore is not applicable. So, they suggest “renegotiating.”

Sorry, that’s not going to happen.

But no matter how many times it happens, you never quite get comfortable during the overdue collection process.

Those are the times when you contemplate the collection process ala Tony Soprano.