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How do you deal with invoicing?
adamnichols45




msg:3637778
 4:41 pm on Apr 29, 2008 (gmt 0)

I have had a new idea for an aspect of my business which would include invoicing new customers.

But where do I stand if say after 14 days the invoice remains unpaid?

 

dbdev




msg:3637795
 4:57 pm on Apr 29, 2008 (gmt 0)

i've got a 100+ post thread out there titled "website complete client doesn't want to pay".

what to do when a client doesn't pay?

1. stop all work immediately
2. if they have a site up that you host - take it down and put up a temp page that says "client failed to pay invoice" or something like that...
3. send a second notice, then final, then send them to collections
4. try to figure out why they won't pay (are they satisfied with what you developed for them?) and talk to them about it.

My *new* policy is 50% up front.

adamnichols45




msg:3637812
 5:12 pm on Apr 29, 2008 (gmt 0)

This is slightly different in that we are not actually providing a service but a product.

Think wholesale.

vincevincevince




msg:3638202
 4:45 am on Apr 30, 2008 (gmt 0)

If the terms of the invoice state 14 days and it is not paid within that time, then you need to start debt recovery. This varies according to where you live.

In the UK, you should now send your client a notice informing them that their invoice is overdue asking them to pay immediately. You should state that you will use the court service to obtain the money owed if it is not forthcoming.

You then follow up with another invoice, typically another invoice period later, which includes interest and debt recovery fees. In the UK these are provided for by law (at preset rates) unless otherwise specified in your invoice or contract. Always mark these repeated invoices for immediate payment, overdue.

Whilst you use other solutions to get your money, always keep sending revised invoices at your regular invoicing interval, with increased interest and recovery charges as permitted.

Once the first repeated invoice and notice has been ignored, then start a money claim through the small claims court. This is generally inexpensive, and legal fees are low as you (at least in the UK) have to represent yourself. If the person who owes you money fails to turn up, then you automatically win. The losing party pays the court costs.

Finally, speak to a lawyer about declaring the other party bankrupt should they fail to be able to pay you.

LifeinAsia




msg:3638683
 3:51 pm on Apr 30, 2008 (gmt 0)

What kinds of customers are these- are they businesses or individuals? Extending credit to "new" customers is definitely a risky proposition. Assume a certain percent will never be collectable and build that into your markup (the actual percentage will vary according to industry and types of products). Also factor in the amount of extra time and expenses from you (or your staff) having to spend sending invoices, following up on the invoices, and chasing after the customers who pay late or never.

adamnichols45




msg:3638693
 4:10 pm on Apr 30, 2008 (gmt 0)

The customers are businesses - who have physical b&m shops.

The typical invoice will be around 100. No upfront payment.

BlueSquares




msg:3638997
 9:47 pm on Apr 30, 2008 (gmt 0)

I don't do anything without a 50% up front retainer. And if they're skittish about it, I drop them asap. Any client that complains about an upfront payment is someone that will most likely be problematic.

As for invoicing, I use Freshbooks.

Save the website removal for last. You don't need negative publicity. Finding out reasons for non-payment first is critical.

Just please make sure your contract says you can pull the site down for non-payment. Create solid development milestones and get sign-offs on them.

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