Cashflow: Calculated Risk
When you run your own business or freelance, the single biggest frustration is not getting paid. It’s nice to think that most of the job of running a design studio consists of actual design, but the unfortunate reality is that a considerable amount of time ends up being spent chasing invoices.
To make this worse, if you aren’t being paid, then you can’t pay the people *you* owe money to, so you are passing the pressure on to other businesses.
There is no magic solution to this. Small retailers will pay you up front for your goods, at least for the first order, and will generally stick to 30 days terms with a little polite chasing, but many big retailers will force long credit terms onto you, throw in compulsory discounts (and this is after you have already been talked into a price reduction) and then force you to haunt them relentlessly for weeks after the invoice due date for payment.
My feeling now is that if you cannot afford to NOT be paid for an order from a new customer, you should refuse it unless the retailer gives you a deposit sufficient to cover your costs. If they say no, then you should walk away, no matter how much it hurts.
The first thing that springs to mind nowadays when a retailer is stalling over an invoice, big or small, is that it might be for a reason – they might be going under, in which case you will never be paid at all. So next time you are lucky enough to get a flatteringly large order from a new customer who won’t pay up front, ask yourself if you can afford the risk.