We have full-time staff allocated to this challenge, and still have clients that will pay us late. This is a fact of life in business.
One of the most surprising things I found when I started working in B2B is the percentage of clients who simply don't pay their bills.
Like tptacek said, I think that's just the way it is and, at least at a certain scale, the only reasonable approach to hire people to do collections.
What scale of company was this?!?
The worst was when I worked for a mom & pop consulting shop. The clients were mostly other local business owners and getting them to pay on time was a serious problem. Law firms were the worst. I assume because threatening them with a lawsuit didn't carry much weight.
People love getting a bargain. Some financial departments are setup so that they will always take the cheapest option.
Make the cheapest option the one that gets you paid up front. Made my life much simpler.
You also get some of the advantages - to channel patio11 for a moment - of "charge more". Your base day rate - the one that anchors your true value - is the "expensive" one that factors in the cost of late payment to you.
In some types of business, putting late terms in contracts and hassling customers for payments is normal.
In other types, quietly putting up with late payment is normal. In those cases, as a vendor, you factor the likelihood of late payment into the price. For repeat customers, it turns into a game of tit-for-tat. For one-offs, it's harder.
The most quixotic thing is, engineering expenses are scrutinized heavily. I literally can't get basic equipment needed, yet we have 100's of unnecessary managers flying all over the world on lavish expense accounts.
Why did I become an engineer again?