|Clients: what to do when they refuse to pay?|
Suggested courses of action in dealing with non payment.
A few weeks ago I took on a job and then when it came time to collect payment, the client refused to answer my email. After a second email and a call to their business I finally got an email back from the client. Basically they are saying they will pay "eventually" which in my mind equates to never.
As I have everything in email from my correspondence with the client, there are no doubts about
1) Work was contracted.
2) There was an agreement.
3) Payment was agreed upon at a price to the mutual satisfaction of both parties before the work began.
4) Payment terms were also agreed upon, along with a due date for such payment, which has now passed.
Now, I've come up with a few courses of action on my own:
- Report them to the bbb.
- Send another email saying that I'm getting an attorney..
- Remind them that this will make it very hard for them to convince any web developer to work with them in the future, because of the bad publicity that will ensue from this mess
- Tell them it's not right to refuse to pay because karma will get them
- Send them a bunch of flowers with a card that says "Please pay me"
- drop the whole thing
Of course, given the amount of knowledge my fellow webmasters have here at WebmasterWorld, I thought you all might be able to give me some better and or novel ways to approach and deal with this situation. Thanks.
jeremy, if you have a contract, and you have done the work and all your asking for is the agreed amount. payment on job done, then
If you are in the UK, you can threaten them with the law, if they don't succomb to that, then go through to the small claims court, i think it costs £8, usually at this point they are more than willing to pay !
If your not in the UK, there must be a similar action that you can take, with the same results.
Boy, I hate when that happens!
I would forget e-mail. It is really easy to get nasty in e-mail without really realizing it and as much as it might annoy you to not do that, you are in the position of trying to get what you want - so getting into an e-mail shouting match won't do you any good.
Call the client - make sure you are talking to the decision maker - and just say "I have a bill that was due XX date. When can I come pick up my check?" Don't say ANYTHING else - although the pause that follows can be VERY awkward.
The client will do one of two things - stutter and stammer and say "we'll cut you a check". If that happens, say, "I'll be in your neighborhood on Wednesday. Why don't I just stop by and pick it up?" Don't accept some vague "We'll get a check to you later."
Option two is the client tells you to go jump. If that happens, hire a friend who is an attorney to send a demand letter - but realize that if the client is really trying to stiff you, it will be very difficult to collect. Unless the amounts involved are very large, filing suit is really not worth the trouble. The true deadbeat client knows this.
My best advice - don't get too emotional about it. Put the client on the spot, try to get your money - but don't obsess, don't spend hours writing nasty e-mails, don't waste billable time fretting about it (all of which I have done when in your position :)) It isn't personal, and when you let it become personal (which I have done) you lose.
If reasonable efforts to collect don't work, chalk it up to experience (always work from an advance) and spend the time you might otherwise spend harassing these jerks looking for new business. It will pay much better in the long run.
Actually, the Better Business Bureau only involves itself in consumer complaints against businesses. Yours is a business-to-business matter, so they wouldn't relay the complaint (which is really all they do anyway).
I always use a 40-20-40 rule. I get 40% upfront nonrefundable. Then half way they can pay 10% get out and take what I have, or pay 20% and proceed. If I don't get my final forty I deliver nothing. In the us for jobs under $10,000 there is really nothing you can do for dead beats except mark their credit (like a $1000 fee a year to have this ability)or small claims. If I get 60% then usually for me there was no real risk. They don't get squat. At least 10% of the people who walk through the door have no intentions of paying. I weed most of them out with a nonrefundable 40% deposit upfront. No work is done until payment clears.
Showing up at their doorstep always shakes them up a bit. I am a big guy. People always tell me they are glad I am not mad at them. I use to have a few bouncer jobs. I am a pretty good web developer but I am an excellent collector ;)
Late/delayed payments really hurt.
I would get the client on the phone (it may take several tries), explain that you sent a bill on such and such a date and what your terms are and gently point out that they are xx days late in payment. Then ask what the status of the payment is. I find that I get a lot better results in actually talking with the client versus contacting them via e-mail.
Your client may have run into cash flow problems and is too embarassed by it to tell you. If you think that that is the case, offer to work with them on setting up a payment plan. I've had this happen with a couple of clients and by arranging a payment plan, I at least get paid and still keep a good relationship with the clients.
|I use to have a few bouncer jobs. I am a pretty good web developer but I am an excellent collector |
Maybe you should post that in the Commercial Exchange! ;)
In the U.S. you do have a remedy for amounts generally under $2500. It's called Small Claims court, and you can do it yourself. Don't be afraid. It's easy. If you present signed contracts, the judge won't even need more than a short narration of what they are looking at to find in your favor.
Afterward, barring an appeal, the judgement becomes final. You send them a demand letter for payment. If they don't, here comes the good part: You send the Sherrifs Deputy to go to their business and literally shake down their pockets, safe,cash register and bank accounts.
I've won hundreds of cases in the course of employment a couple years ago.
There's a couple details I left out but my wife needs a ride to work right now and I gotta go.
Have to agree, I enjoy "just stopping by". I'm pretty big too, and it truly helps. Sometimes if you stop by and just pretend you were expecting to pick up the check it gets the right person's attention. It's not worth getting feisty, because as everyone said, those who want to stiff you will. I'm out $3000 right now that I am going to have to take to small claims-- the bill's nearing the one year anniversary of being due. I'll bet I spent twice as much time worrying about how to get the money as I did actually working on the project.
|I'll bet I spent twice as much time worrying about how to get the money as I did actually working on the project. |
My experience as well - that's why my advice is to spend the time and energy looking for new business - not chasing deadbeats. :)