26 replies to this topic

[Searchaware]

Yep I guess you learn with experience - it's usually the hard way but then you don't tend to forget

[BrianR]

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.

Yes OWG, in my experience, you are absolutely right.

The only exception is the crooks who intend to defraud you from the outset. Two of my experiences with this type of defaulter are as follows:

1. After telling a defaulter that I was coming over to his offices today to collect my overdue payment, I have literally sat in their reception and told each and every visitor exactly why I was there. Word soon got to the MD - and the cheque was in my hand within 10 minutes.

2. I had a solicitor (yes, you read that right!) default on us for £3K+. That really got me riled! This was the only time we went to court over a payment default, and I'm really chuffed to say that we won!

Business crooks come in all shapes and sizes and, alas, it's not always possible to sniff them out at the outset of a project.

BrianR

[Jill]

IMO, nobody should ever do work without at least having some money up front.

I like half payment up front for big jobs and I simply put all their work aside until the payment arrives.

For many of my current services it's full payment in advance.

I have never had a problem with non-payment since once of my very first client's stiffed me. (A guy from a church no less!) Learned a valuable lesson from that stinker. Get the payment first. Do the job second.



Jill

[bwelford]

I think it's a question of mutual respect and fair practices. If a customer jumps on his or her high horse and doesn't want to accept the terms, then politely say good-bye.

[SearchRank]

For SEO campaigns and the set up fee that is charged (not ongoing monthly stuff) we require payment in full before any work is done. There have been a couple of instances where we have broken the set up fee into payments but that was only with large reputable companies that possibly had a specific "per month" marketing budget that they were limited to. Otherwise, they pay in full before anything is done.

On web development - 50% down, 50% on completion or on very large high dollar projects - 50% down, 25% at halfway mark and final 25% at completion.

[samt]

OK now finally here's something I have good experience in. I've been handling collections for our company for almost 7 years now. Most of what we sell is actual goods, but we also do a lot of labor. I have a really comprehensive set of procedures starting from the first proposal of a deal, all the way to collecting after the fact from difficult customers. I'm not a big article writer, but I'd be happy to lay it all out if anyone's interested. But basically....

1. If you're not getting payment in full up front, take a quick credit application. Check their payment habits on other open accounts and verify basic bank info. This is really easily done with a few quick faxes. It's important to check BOTH trade references and bank references. Trade references can be good even when not deserved, because a lot of companies give their best affiliates for these, but the banks will never lie (although if a bank refuses simple information, like NSF activity, that's a big red flag).

2. Always ask for a personal guarantee. Some people will refuse to give one, but many will go ahead and sign. If you have a personal guarantee, and the company defaults on the bill, you then have the additional resource of pursuing the guarantor for payment. Make sure the guarantee is well-written and very comprehensive (for example, the guarantee I use even stipulates that, no matter where the transaction was done, any and all litigation will be in our county, at our option).

3. Implement a series of calls or emails for late-payers. Be really nice the first time, say something like 'you may not have received our bill'...

4. Use collection services before it gets nasty if you're not getting results. There are a lot of collection agencies (email me if you want some names) who will send a demand letter for free, in hopes of getting your business if it goes farther. There are even more who will send a series of letters for a minimal fee (about $15). These may be exactly the same as the letters you'd send yourself, but being from a collection agency has a lot more sway. Dun & Bradstreet is my favorite one, if the company is listed. They'll send a three-letter series for I think about $20, but there's an added benefit. D&B will immediately change a company's rating when any collection service is ordered against them.

I could probably come up with a lot more, but these are the basic important things. Good luck!

[BrianR]

Thanks, samt - sounds good - it's good to get a set of procedures from someone who has a lot of experience in this area.

BrianR

[anthonyparsons.com]

I can only say that even as a trusting Australian that I am, when money comes into the play, it is always money up front, then work delivered.

I give them the total price first, then how much they require to deposit to get them "x" far. Once that is reached, deposit again, etc. I go out of my way to ensure that progressive results are given to clients, this in turn instills confidence and trust in their purchase; as such the rest of the money comes easily.

[toprank]

Pay to play is definitley the best policy. For projects under a specified amount, we require 100% of first month fees to start. Other wise, 50% up front and 50% after the initial submissions are completed.

For ongoing fees under $1k we typically require a CC from the client.

The only issues we've ever had is with very large companies with policies of paying 30-45 days out. In those few cases we simply invoice early and it works just fine.

[sheriw]

Collections is one of the things I hate most, but it becomes necessary at times. I agree with the other posts: I always get a 50% deposit up front BEFORE starting projects, and have a signed contract in hand.
It gets a bit stickier if I've never met the person in person, since I work via the Internet many times, and have clients all over. I have only been seriously stiffed twice. After emailed invoices, phone calls, etc. I then notified the FBI fraud department, since this person had contracted via the Internet for my services, the product was delivered, and I never received payment.
I had proof, etc. including our emails, the original documentation. I had emailed this person the previous day letting them know I would do this. They can shut a web site down for you in cases like this.
They must have contacted this person, because the next day I got my payment!
Again, this is an extreme measure, and I used it only after trying every other reasonable method of being paid.

[DianeV]

Whoa, I didn't know about the FBI fraud department. That's good data.

That said, we ask for 50% to start, 25% after the design layout is approved, and 25% when the site is finished and approved but prior to launch. At any rate, this has worked well for us.

I think we may switch to second-50% due when design is approved because from that point to site completion (adding content, tweaking everything, optimization) is a lot of work and I'd rather take additional up-the-road "hassles" (like the one last payment) out of the way.

[guidaro]

Hi all, I've working these days with www.first-zone.com and some of my friends, now we're getting paid and all of us receive checks with out funds, wen we went to bank (by the way I live in Argentina) employee rejects payments.
So, first-zone webpage don't have a telephone number, mail address, only a feedback with no answer.
Has any one the same experience with this people?