In 12 years I have had 3 clients go bankrupt on me and as a contractor you are simply an unsecured creditor. Good luck getting anything. I explored invoice factoring but the companies who do that want 3-5% which over the years is quite a lot of money.
I also learned that the net payment terms on my contracts with clients were as meaningful as toilet paper. Getting paid in 30 days was surprising, 60-90 was more the norm.
Ultimately I just started changing the terms with new clients - telling them that we could work on a typical net 30 arrangement at a top tier rate or I would give them a discount to buy hours ahead of time in 100 hour blocks and I would burn down against this. Most heard 'discount' and nothing else mattered. It is difficult to change a client to this model but if you can start a relationship from this perspective things get much easier.
> Getting paid in 30 days was surprising, 60-90 was more the norm.
I've seen this before on HN. It's frustrating that it still happens. Obviously, if they can delay paying you to 60 or 90 days (but still get paid themselves at 30 days) they make money, but it's sleazy. Perhaps people should start naming and shaming companies who do that?
Slow-paying clients are pretty much a universal constant of business. I have the good fortune to be billing a large bureaucracy with weekly payment cycle, so they do in fact pay within 30 days. All I had to do was spend 2 months on paperwork and a thousand bucks on insurance :)
For small businesses, putting off payments to suppliers can be the difference between making payroll and going bankrupt. You can hardly blame them.
I make a point to pay as soon as possible, on the theory that this will improve the service I'm getting from other professionals ("Let's do Jacques's file first, he always pays promptly and we need the cash").
That's a benefit of working with the government, too - the payments are predictable.
Also, the 60 to 90 day payments are typical for companies that like to keep things "lean" ... they want to generate revenue before they pay. Dell was known for this with their hardware purchasing - they would maintain a negative cash conversion cycle because they could sell a computer before its components were even paid for.
I wouldn't name and shame them. Then any company seeing you do that would be fearful if they're late on a payment they'll be embarrassed publicly. If they pay you in 90 days I don't think it's too sleazy. My condo board used to prioritize bills by late fees (or lack thereof). Just the way it is.
