Industry Research

August LCT Top Story: Getting Paid

Posted on August 3, 2009 by LCT Staff - Also by this author

Everyone is wondering the same thing: Who is holding all the money? Whether you believe it is Bill Gates, affiliates farming jobs to you, or the Federal Reserve, everyone is asking, where is all the money? 

With corporate clients and affiliate networks stretching you out, and even friends who farm work between companies, it seems that no one is paying their bills on time. While one company might be collecting for a ride today, it is farming the order out and keeping the cash in favor of paying later.


Why is this happening? Because cash flow has become the name of the game for survival in the worst recession since the Great Depression. Companies need cash coming in the door every day to meet such basic expenses as payroll, insurance, fuel, rent, or mortgage payments. Because no one seems certain when their clients or affiliates are going to pay anymore, it is not surprising that companies are looking for others to do the work today in hopes of a payment down the road. Most operators figure some money is better than no money even if you have to wait 90 days to be paid for the work. The fact is doing so is slowly killing many operators who simply can’t wait to get paid and end up slipping under while waiting for late payments.


There is always a fear in calling upon someone that owes you money. That simple phone call asking for money may sour the client to a point that the client may not use you again because you have shaken them down and placed them in the embarrassing position of committing to a payment timeline.

It is simply a risk you must take because without the money you can’t pay your own bills. And let’s face it, we simply cannot and should not work for free. As unpleasant as it may be, when clients don’t pay their bills, you must at least attempt to collect. Whether it is a regular client or an affiliate client, all services rendered must be collected and how you go about collecting it may differ. You may have to walk on eggs shells — or break some eggs, depending on the situation — to get your money, but you must make the effort. This begins with having established terms with the client from the inception of the business relationship. Terms must be defined as Net-10 days, Net-30 days, or whatever arrangement you make, but there must be some agreement of time frame to be paid. Once the terms of the agreement are broken, you are completely justified in contacting the client to demand payment.


Certainly collecting from an affiliate puts you in an awkward position. It is a lot like calling upon a family relative and asking to borrow money. No one likes to do it, but it simply must be done. Many of the big networks ask for and expect Net 60.

This allows them to bill their client for the work done, receive payment, and send you the money for your service. When collecting from affiliates, a common statement is that money has not been collected. This should be an irrelevant issue. You can’t call the phone company, the power company, or your fuel supplier and tell them you can’t pay your bill because your client has not paid you. The bottom line is, they placed the order, you delivered the service, and now you need to be paid.

One way to guarantee payment is to require a “backup credit card” and have a specific arrangement that if any invoice becomes older than the terms agreed upon, the credit card is charged. A written agreement should be signed at the time you begin conducting business. It avoids all phone calls and collection efforts and should be considered “standard policy.” This is the best way to make sure that you are not left holding the bag.

Another way to collect from an affiliate may be considered controversial but it is certainly fair. Most affiliates will gladly accept work from another affiliate and believe that such a relationship is reciprocal. If someone owes you money and is not paying it, you can farm out one of your jobs to them and let them do the work. Once the work has been completed, the other company will send you the invoice. Simply deduct that from what you are owed and pocket the money your client paid you. No one likes this but what is good for the goose is certainly good for the gander.

In the event you do not have any clients that can be served by the affiliate and you have exhausted all efforts to get paid for work done, you can always demand payment in full for the next job given to you and payment of all past due debt before delivering further service. If such a demand is met with disdain, just remember that you weren’t getting paid for the work anyway, so if the affiliate never gives you another job it is really a blessing.


There are many clients who simply can’t pay today such as large corporations who pay through a corporate office or state agencies that require a purchase order. For those entities, you must invoice in order to maintain the account. However, many other companies and individuals want the ability to just call in an order and have it billed to them. The best way to handle these types of clients is to ask them to place a credit card on file so that all charges will be billed to their credit card and you get paid today.

For those that desire to be billed, always ask for a credit card to back up the account with the agreement that the card will be billed if the account becomes delinquent.

Another method of immediate payment is to work through companies such as CitiBank or Capital One that can create a major credit card such as MasterCard or Visa with your company logo.

The client then can use this corporate branded card for purchases with your company or any other merchant who accepts the card. You get immediate payment with the regular credit card charges deducted and the client pays the credit card company instead of you. The credit card company handles the application, the approval, and collections while you collect money for every ride as it occurs by billing it to the branded credit card.


The most important aspect of a relationship is communication. No one likes to be left in the dark wondering when they will be paid. Pick up the phone and call your vendors to explain your situation. Work out a payment arrangement of some type. A small amount paid each month is better than no money paid at all. Work out a payment plan that works for both of you. If trade is an option, offer it. You can often settle debts for pennies on the dollar by offering to trade services with vendors you cannot pay. The important thing is to communicate your situation and your intentions with vendors to preserve the relationship. Most vendors will be delighted that you called to discuss the situation rather than avoid it.

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