Turning Down Work in a Down Economy

When I go to the local mechanic to have my Jeep worked on, he charges me 72 dollars per hour and expects payment at the time services are rendered. When I get sick and go to the doctor, they to expect payment at the time services are rendered. Why then, in the world of web design, do many companies insist on paying you 30 days after the work is completed? I know, I know. Most accounts payable departments work on that schedule and that’s just how they do things. Deal with it. Well, I generally don’t.

One of my old bosses taught me a lesson that another business leader in the same field agreed with. Not all money is good money, and sometimes you have to refuse work because you know the client would be more of a pain than they are worth. Maybe it’s not the client themselves, maybe it’s just that they don’t agree to your terms. Maybe, that’s enough.

Recently I was contacted to do project for a large company where I used to work full-time. When the opportunity came up, I was their first choice. The project would have been easy for me, but it required that I buy some new software and take a week of my time to have meetings with the company and actually do the work. Their policy is to only pay after the work is completed and then on a 30 day billing cycle. My general policy is to receive an initial deposit to cover costs, and the remainder of payment to be collected upon project completion.

I agreed to similar (net 30) terms for a different project earlier this year. Upon completion, I billed the client and waited 30 days. After 30 days, I called the client, and re-billed them. They were slow payers, and it ended up taking almost 4 months for me to collect my money. I don’t like waiting. Especially when it comes to money!

I hate to turn down any work, especially when it comes from a large, well established local corporation. But I have been raked over the coals enough times to know to stick to my guns. I have a waiting list of projects, and each client has paid or will pay me a deposit before any work is actually started.

I think my policies are simple and fair. But am I wrong? Should I bite the bullet and get used to doing work in advance?

I am a bit conflicted about my recent decision to turn that work down. Now, someone else is going to do the project.

Feel free to comment on this post and offer me some advice.

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Tagged as: business, recession