26 replies to this topic

[OldWelshGuy]

what a Freudian slip! when i was typing the sub header i mistyped 'use' with 'sue' it made me giggle, and threw up another angle.

How do we all get paid?

You have seen the customer, listened to what they want, fought with them over what they should have, and delivered the goods to an emphatic YES from them.

Then the invoice hits their doormat, and you go from' that wonderful person who is doing a brilliant job for our business to- the guy who wants money!

I have always had a motto, ' a sale is a sale when the cheque clears, up until then it is a loan to the customer'

What methods do we all set into motion when debt collecting,?

When does the process start? should debt collection be set out in your order confirmation/contract?

what are your thoughts?

[websage]

I've never had bad experience with cheque clearance. In fact, my only bad experience has been with a small web hosting company which became impossible to get in touch with, but then I switched to another web host and everything was fine.

But if you ever have problems with paying clients and you still have access to their FTP, you can just remind them that nothing on the web is forever

[OldWelshGuy]

websage, it wasn't the possibility of the cheque 'bouncing ' I was talking about, more getting our paws on the cheque in the first place lol

[websage]

Right... So do not release the userID and PW until having received the cheque :-) Or befriend some guys with thick necks :-)

[dragonlady7]

I was going to start a thread about this soon. There were a number of suggestions about this kind of thing in my earlier thread about starting up your own freelance business, and I actually have those all collated and ready to be written into an article. ... Hm. Anyway. I wanted to know what kind of invoices people use, and the like. I figure I have to be really ready to do it, because collecting money is one thing you can't afford to tentatively wing on a temporary basis. No, you have to be all business when it comes to the money.

[SearchRank]

First of all we make sure to outline our expectation in contract form - 30 days net, after that they can expect a 1.5% late charge for each month they are late. If they pay by credit card and do a chargeback, we charge them a $25 fee for that.

For ongoing accounts we either bill their Visa, MC or AMX monthly and if they want to be invoiced, we invoice them every quarter.

If they go delinquent, they get a series of three emails: the first after they are 30 days late, a second at 40 days if there is no response and then at 60 a "we are going to terminate your (whatever we're doing for them)". At 70 they are terminated and then we send a "Request for Payment" letter of which if we do not receive payment within 10 days of that letter, then the attorney sends them a "pay of we'll sue" letter.

Fortunately clients that have gone so far as the lawyer stage have always paid (lawyer's letters are scary). With hosting clients, all you have to do is shut their sites down and they immediately respond. We've never had to sue for payment yet.

That's how we get paid. I think that's what you were asking, right OWG?

[fred]

I think that paiement terms should be clear in the contract or email if you don't have contract.

the thing is you need to record and make sure that your customer understand those terms.

then they can't really contest payment, or give you trouble .

I don't deliver until paid. ( from now on )

[robwatts]

It helps when you have control over their domain and hosting. <insert evil grin>

A good approach is to get a % of the payment upfront. In my experience, reasonable people seldom have a problem with this.

As for those that don't pay a "This web page is currently suspended" message may also assist in obtaining any outstanding balances..

Its seldom worth the bother of chasing the small amounts as it costs money and time to do so

[fred]

I like the

"This web page is currently suspended" message

[robwatts]

Seems these guys do too

http://quark.liquidw...page/index.html

[OldWelshGuy]

Yes, I ALWAYS reply to the question 'how much will it cost' with, 'when are you going to pay', the customer normally asks does that affect the cost?', to this i reply only if you pay it all NOW or within the next 7 days.

I then give them the price, and make it 100% clear that my standard terms are 7 days net of invoice, I follow this with 'is that a problem?' the customer will then say either yes or no, if it is I ask why, they then say, we pay or bills on the 28th of every month blah blah blah. I close them down to the day that they are going to pay the invoice then again make it CLEAR, i will expect that cheque no later than 2 days after this date, I also explain that my standard terms are pre payment and have it built into the terms and conditions that the 'debt will be considered as overdue on the date of the work being completed'

I explain to them that i give a fine service and do everything that we agree on at the time scale to which we agree, and as the most important part of ANY deal is getting paid I make sure we BOTH know where we stand to prevent any misunderstandings later on

I send the invoice out within 48hrs of the order, with the terms agreed on it and a letter confirming everything we discussed and what I am doing and when.

If i do not get paid within the time agreed I wait another 2 working days to allow for the post, then i write a letter explaining that I assume it is an oversight, as we agreed the payment would be here by now, here is a copy of the invoice, please raise and post a cheque TODAY, should this not be possible please notify me of the reason for delay.


I have to say however that in 90% + of cases i get the money without fail and on time, most of it is down to making it clear at the beginning when I expect to get paid.

It is only the big companies that try it on, I simply telephone the guy that placed the order and tell him i want my money as agreed, or I shall have no problem with going straight to litigation for breach of contract and also claiming damages for time spent preparing the documents etc.

Works every time, but as i say I rarely get a problem, and when i do, i look for a client to replace them.

I tell the defaulting company that i have withdrawn their hosting services as per my T&C, and also that i am enforcing my right to ownership of the documents and intellectual copyright and will litigate on any breach of these terms. I then give them the option to purchase the website on disc together with me signing over my copyright and ownership, i stick a few £££s on top of the agreed amount I have only had to go this far with two customers (ex) and they both paid the money.

I was really annoyed with one customer who bounced a cheque on me, i actually telephoned him, told him to go to his website, and put up the 'this site is no longer available' page while he was watching, told him to refresh the page, he went totally into orbit he shouted and swore and called me EVERYTHING, he called me a blackmailing XXXXXXXXXX, it really made my day lol

then he paid

[Searchaware]

I had a rather unfortunate "not getting paid" experience earlier in the year for a good few thousand pounds and as a result took a long hard look at my payment terms.

As we all know a customer who doesn't pay is worse than no customer at all. Now I insist on a minimum 40% upfront on projects over a set threshold and a maximum 30 days credit on any other invoice. I call after 26/27 days to remind the customer of the upcoming payment due date and confirm payment is in hand.

On day 31, I will issue a formal reminder and request that they pay without further delay. If there is still no response to this then on day 38 I will send a final reminder and warning of recover action. If the payment doesn't arrive by day 45 then I proceed straight to a formal collection process (either with a credit control company or a small claim if it is a large enough invoice).

I have definitely lost a few "customers" who felt this approach was heavy-handed - but if they are not prepared to pay within 30 days then I would question their value as a customer.

OWG - do you refer to the Late Payment Regulations on your UK invoices? I have been doing this for a few months which gives me a legal right to collect interest and a collection fee if customers don't pay by the due date. This measure, plus my caring collection process , has really improved my debtor management.

Simon

[OldWelshGuy]

Yes searchaware i do refer to the late payment terms, that was why i was smiling when i was typing thet the worse offenders for late payments were IM experience government agencies, the very agencies who put this legislation into place to protect us small business people.

But as i run my business ona friendly wavelength i do not mind losing people who give me bad vibes, let them tell their friends and associates not to deal with me, if they associate with these types, then chances are that they would treat me the same.

when we had a bigger business i actually had a customer ring me up to complain that one of my girls had been 'hassling him constantly' regarding a debt, he asked if i could put a stop to it, I said yeh no worries mate, send me a cheque, and i can gusrantee that no one will call you again

He didnt advertise with us after that, but he did pay the bill.

[OldWelshGuy]

--- JOKE----

mammy mammy there's a man at the door with a bill,

dont be silly darling its probably a duck with a hat on

[robwatts]

Has anyone a virtual rotten tomato?