RE: Contractors: Run Credit Checks for Questionable Customers?

[david -dot- locke -at- amd -dot- com]

Sure run a credit check if you are a 1099 or DBA organization. But, if you
are a body shop contractor, you will get paid even if you have to file a
payday law application and let the Labor Department pay you out of the
unemployment taxes they collected. 

I know that I didn't check out an ISP that we used. They went bankrupt. We
couldn't ftp our server until another company took over operations of the
ISPs facilities. We were dead for about six weeks. 

When you go to court for non-payment on your receivables, turn it into an
injunction related to your copyright. If they can't ship, you will get paid.
Even a work-for-hire provision can't be enforced if you haven't been paid.
As for cash flow try to always have two or more customers at a time. 

I've seen consulting companies die when a customer paid late. These people
had multiple contracts and underwent constant growth. Like a shark, they
died when they couldn't keep growing. Avoid this by socking money away.
Managing your cash flow is job one right before job two making your
schedule.

David


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