I always negotiate net 15 and usually am paid by 10-15 days.
Ask HN: What is the typical time your contracting invoices are paid?
11–20 of 24 posts
Re: Ask HN: What is the typical time your contracting invoices are paid?
#12I have found people typically have a certain way of paying. Some companies pay late on principal, some pay early on principal, some pay late due to dysfunction or cash problems, some pay on time on principal. Over time I think you learn to set prices accordingly, offer small discounts for timely payment, and big discounts for prepayment.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#13I use net 30 terms. Average time between invoice delivery to invoice deposit in my bank account appears to be approximately 2 weeks, depending on whether they decide to pay by snail mail or ACH transfer.
I've never had a client be late with payment. I wouldn't say I get "nervous" if they don't pay within 2 weeks, but given that I'm spoiled by the average I've experienced, it would probably prompt my attention if they'd not at least started the process within that time frame.
From what I can tell most of the companies I work with appear to be eager to get the invoice process over and done with.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#14I get paid in 30 or 60 days usually.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#15I contract direct. I allow 30 day net terms with a 25% discount for paying within 15 days. All my clients have opted to save $50hr instead of borrowing my money for a month.
Much larger discount for early payment than I've heard of. At this large of discount doesn't it sound like the original rate is just obviously marked up to account for this offer? Related, but wouldn't this lose potential clients that think the rate is too high, unless/until you quickly explain there's a discount for early payment or without their being confident that they will always be able to take you up on that o…
Maybe the rate is marked up but I'll be damned if that's not a great cheap tactic to really incentivize people to pay on time.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#16When I can, they are paid before I send them because I stipulate a retainer in the contract and further stipulate that the retainer is to be applied against final invoice. Likewise, my default terms include payment is due upon receipt and failure to pay is grounds for stopping work. The only one that really matters is the retainer, because that's the one about who owes who what and it means I owe work instead of the…
>It prevents clients from using me as a bank.
Not clear what you mean by this, please explain.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#17When I can, they are paid before I send them because I stipulate a retainer in the contract and further stipulate that the retainer is to be applied against final invoice. Likewise, my default terms include payment is due upon receipt and failure to pay is grounds for stopping work. The only one that really matters is the retainer, because that's the one about who owes who what and it means I owe work instead of the…
>It prevents clients from using me as a bank. Not clear what you mean by this, please explain.
A company can go to a bank and ask for a few thousand dollars to be repaid in 30, 60, or ninety days. The bank will charge fees in return for the providing the money. That is the bank's business and how it turns a profit.
On the other hand, there are no fees if the company does not pay me for 30, 60 or ninety days and so it is economically rational for a company to improve cash flow by not paying me rather than using a bank. Worse, collecting delayed payment takes my time and energy and does not produce additional profit for me. Just additional work. Even worse, holding my payment creates cash flow problems for me that provide the company leverage to renegotiate for pennies on the dollar.
At worst, I have learned in one of the harder ways that I don't want to loan money in the form of delayed payment to businesses with cash flow problems. A company that cannot write me a check before the project starts does not have sufficient funds to complete the project. Better I forego fantasy profits and play the odds.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#18Earlier quoted context omitted.
>It prevents clients from using me as a bank. Not clear what you mean by this, please explain.
A company can go to a bank and ask for a few thousand dollars to be repaid in 30, 60, or ninety days. The bank will charge fees in return for the providing the money. That is the bank's business and how it turns a profit. On the other hand, there are no fees if the company does not pay me for 30, 60 or ninety days and so it is economically rational for a company to improve cash flow by not paying me rather than using…
I get it now, was not clear earlier because the fees are not present in your case, so the analogy did not seem exact, though I did think about it before asking. Thanks for the detailed answer. Makes good sense. I've had a few cases like that too, as a consultant, and have learned from them.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#19I've worked in several places as a contractor in London and it was pretty normal to get paid 1 month after you invoice.
Now that I run a company about 50% of my customers wait 1 month before paying and about 50% pay immediately. The ones that pay immediately are always much better clients as a whole and this is a good indicator of their general business health.
Re: Ask HN: What is the typical time your contracting invoices are paid?
#20I contract direct. I allow 30 day net terms with a 25% discount for paying within 15 days. All my clients have opted to save $50hr instead of borrowing my money for a month.
Much larger discount for early payment than I've heard of. At this large of discount doesn't it sound like the original rate is just obviously marked up to account for this offer? Related, but wouldn't this lose potential clients that think the rate is too high, unless/until you quickly explain there's a discount for early payment or without their being confident that they will always be able to take you up on that o…
Yes, it is a much larger discount than normal. In reality it is a disguised punishment for paying late but cauched in nicer terms. The bill paying arm of a companyee prefers to effectively borrow money from people they owe for 30 days. It isn't because they can't pay promptly. The $50hr difference changes that calculus for them. I did have a client that couldn't get its act together and pay promptly and I was actually happy to get paid late - at the higher rate.
As for the rate, I'm a software developer with a skill set that, while not in high demand, is rare enough to let me charge $20 more than I was being billed out at 10 years ago (of which I would get half).
As far a losing clients based on the rate: It hasn't happened yet but if it did, that would be a good thing. A client who can't appreciate/profit from the value I bring to the table is a client I don't want. I just don't want to work for a client I can't make happy. That just doesn't do anyone any good and since my reputation is livelihood, I actually can't afford to make unhappy customers.