Like kewms, I am a writer (and photojournalist), and a great deal of the work I do is for magazines and newspapers. When their payment terms are "we pay when the article is published, 5 or 6 months from now" (two magazines I've worked for, and the norm in that industry) or "we send the invoice to the head office in Montana, and they pay it when and how they pay stuff" (one of my newspaper clients), I have little ability to influence that.
When the nature of your business is such that you can't bill Net 10, two survival strategies help even out the cash flow:
- Take on a variety of work. As has been pointed out, quick projects with short turn-around times will help even out the cash flow in between the larger, slower-paying clients.
- Take on a consistent stream of new projects. If you have a new project going every month or every week, you start to get consistent money coming in every month. Sure, it takes a while to "ladder up" your A/R so that you have money coming in at the same rate new work is going out, but consistent new A/R helps a lot when your clients take a while to cut loose a check.
Another option, now that I think about it, is diversifying what you do, so that you get a range of clients. For example, the bulk of my work (or, at least, the portion of my work that's not wrapped up in the software company I'm trying to phase out of) is writing and photojournalism. But, since those clients often take a while to pay, I also do some portrait and commercial photography work. Those clients might not be as plentiful as they would be if that were my only focus, but the COD income from the portraits helps even out the other income. Multiple streams of income can equal more consistent income, if the streams don't conflict with one another.