Week 218: The Rift

| Hans Gerwitz

We recently received payment for a couple of overdue invoices. Our established clients are invoiced after the work is complete, and this one insists on a due date of at least 2 months out. Because they outsource accounting in a rather haphazard fashion, it’s not uncommon for them to pay a bit late. In this unusually bad case, 12 weeks late.

The two relevant projects represented two full months of our full capacity, and between the first week of work and payment, 6 months passed. During those 6 months, very few other invoices are even due, so we glided along with a negative cash flow, watching our reserves dwindle.

It requires substantial financial runway for a small agency to float across such a large rift. I know of several that can not afford it, and so won’t work with such lumbering giants to whom these invoices are minor concerns.

This mismatch of scale denies many clients access to a lot of talented agencies and freelancers, which goes unnoticed in their efforts to engage more nimble, innovative partners.