PostHeaderIcon The perils of running your own business

I have spent the last 3 days totally emerged in MYOB. I’ve been trying to get all of my FY 07/08 accounts up to date and finalised so that I can pass them on to our accountant, all so that she can tell me how much money I owe the tax man. What a rewarding few days this has been!

One thing that has come out of it though, is that I’ve found a couple of unpaid accounts which have slipped through the cracks. They are only fairly recently overdue, so obviously I’ve followed them up, but this is probably the worst, and most frustrating thing, about running your own business. Chasing debtors…

A few years ago, we made the fatal mistake of mixing business with pleasure, and we took on a friend as a client. We had a good working relationship for about 2 years, but then things started to go sour when our bills were ignored, and always put to the bottom of the pile, on the assumption that because we were friends, we could wait, and we’d understand. Well, 12 month of chasing, and qute a few thousand dollars later, we certainly didn’t understand, and we’re certainly no longer friends! I’m happy to say that we did recover most of the debt, but there is a small amount that we’ve had to write off, and seeing this appear in MYOB this week reminded me of the whole episode.

I have another client that, for all intents & purposes, is the ‘perfect’ client. Except that so far, I haven’t been paid. And I’m not talking nickles & dimes either, it’s a significant amount of money (and face it, for us small business operators, any amount is a significant amount!). I’m getting promises that the money will be in the bank “soon”, but I can’t find “soon” on my calendar, so I really don’t know when to expect this payment. And what makes it worse is that I have to pay subcontractors from this payment. Now, they have done the work, in good faith, so why should they wait for payment? Fact is, they won’t wait, I’ll pay them regardless of whether the client pays, as it’s my client, and not their problem. But it astonishes me that, time and time again, large companies think that they can take the ‘little guy’ for granted, and just not pay their bills.

There are so many benefits to running your own business. Flexibility, freedom, financial independence, work/life balance to name just a few. But there are definite perils. And unfortunately, chasing payments is one of them. It’s not something that would put me off doing what I’m doing, but it’s certainly something that I am going to keep a closer eye on now, and try to manage more effectively. And to my client that hasn’t paid yet – don’t ask me to do any more work until you show me the money!

Till next time,

Lia…

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