I was checking my bank account over the weekend and saw that one of my clients had bounced a check. Nothing like seeing a chargeback on your bank account to make you feel…concerned. Luckily, this client is a trusted client that I have worked with for about two years. She apologized and explained that a check had been mistakenly written out of the payroll account, and that I should be fine to resubmit now. This is an understandable mistake — even I mix up my accounts on occasion! — and it got me thinking about how having a home business can make you more vulnerable to these types of mistakes.

Problems of client bounced checks

Obviously, the first problem is that money you expected to be there, isn’t. But if you are counting on that money, and it is suddenly no longer there, you might overdraw your account, incurring fees. Additionally, in many cases, you have already done the work for the client, so you’re out your time. Not to mention if you’ve been doing work since that you don’t get paid for. I’m glad that none of these things ended up being a problem for me.

Protecting yourself against client bounced checks

It is important to realize that this could happen to you. Here are some things you can do to protect yourself from situations in which client bounced checks might be very harmful:

* Make sure you have a cushion in your bank account to avoid charges in the event that you overdraw.

* Check your bank account regularly online in order to keep up to date. Often it’s way too late when the statement comes.

* For large projects, ask for some of the money up front. Divide payments into thirds: First bit due at the beginning, second bit due halfway through and third bit due upon completion. Chances are that the first check will clear. And you can stop work if the second check bounces.

Have you ever had issues with client bounced checks?