Payment Issues

talk to them.

Debt recovery is the final solution after every avenue!

sometimes u have to be upfront and maybe even slightly agressive - not my normal approach, but in a situation like this they need to know that you're not a pushover, as a lot of companies will pay the people putting on the most pressure first (I hate this phrase) in the current financial climate!

Most people don't understand that although there have been no material costs to the designer, many hours of hard work and blood, sweat and yup tears have gone into the work you have produced.

Just let them know that you need them to pay asap!
 
RussellHall said:
Timely post Greg, had a call today and they went into depth into their current situation. They are owed nearly £500K from their major end client and have had to lay off staff in the short term till it's paid, and they can pay their suppliers. I do feel for them but wish they could have been upfront about the situation earlier rather than ignoring my emails.

Still, doesn't change the fact that my payment is their responsibility so I'm sticking to my guns and crossing fingers it's sorted soon.



OUCH!!!!! No company owed THAT much money can survive, unless they have a huge reserve to sustain it. They are vunerable to administration, and the signs look bad for them and for you. I personally don't think you will get paid, full stop. Your ammount due will be small compared to others. They will have to be paying a VAT bill this month, if they are owed £500k that in itself is a £50,000 VAT liability. It looks bleak mate. I would mentally write it off, If it all goes tits up, you'll never see anything. Too many other people ahead of you - VAT, TAX, Bank, Loans Administrator, then a host of suppliers. I'd look to see how you can survive and move forward without those funds......a harsh lesson learned. Hope I'm wrong though......
 
Most people don't understand that although there have been no material costs to the designer, many hours of hard work and blood, sweat and yup tears have gone into the work you have produced.
Yep agree, time is money, so regardless of material costs the time spent is time lost if payment doesn't come through and leaves a rather big whole in my finances (Not helped by another payment gap due to xmas).

It looks bleak mate. I would mentally write it off, If it all goes tits up, you'll never see anything.
I kind of have, it all depends if the end client pays up and I have no control over that. Going to bust a gut in Jan to get as much in as poss to try and fill the finance gap. 99 Designs here I come! (I'm joking I'm not that desperate)
 
Russell I am so sorry mate! :-( I hope it works out for you!

I am owed €2400 from one of my major clients and they are nearing 120 days on some invoices! Quite soon they might owe me enough to start some sort of debt collection proceedings!

As Berry says, cashflow is so important... and I have rent to pay dammit!
 
Hi Russell,

Bummer situation. I have a clients who's policy is not to pay until you chase, I agree that cash is the key.

I've not done this before, and I don't know if this will help, but you can factor your invoices, where you raise an invoice through a factor company, you get paid and the factor company takes over retrieval of the money.. they take a percentage of your invoice, but at least you get paid.


Hope it pans out ok.

Luke.
 
Unfortunetley, while the factor company will pay you on invoice( for a percentage) and they will seek payement - the Debt is still yours if the client still doesn't pay the factoring company. The factor company can retrieve the money back of you! Also you have to factor all your work to make it viable for factoring companies.
 
Once you've set a precedent for being a 'pushover' with a client, especially a 'big' client who gives you plenty of work and knows you are a one man band, it will be difficult to turn things around and get them to respect you enough to pay promptly. If you give them an inch when you first start doing business, they'll take a mile by degrees, giving you more and more work that you can't refuse and paying for it as and when they feel like it. They feel like you need them so have no respect for your cashflow. Thing is, they probably also realise that you are doing good work at a decent price but they'll still do the bare minimum they have to to keep you; paying eventually and being all matey matey with you.

You have to be clear at the outset that late payment isn't what you are used to or will tolerate. Not in a mercenary way, but in the ts and cs. 50% is the way I've been doing it for quite a while. It may put of some clients, but eventually you'll build a base of clients who all pay well. To my mind three good paying clients is better than four late payers - your own stress level is a factor that shouldn't be taken lightly.

At least if you know when the money is coming in you can budget properly and sleep at night.

Although what I used to do when my nice but late paying clients took an age to cough up is just imagine I was saving up and they were my piggy bank! It got me through.

Hope it works out for you.
 
I'm fairly simple with my clients but I've also been fairly lucky with mine too (no more than 7 days late payment a couple of times :() They get 30 days to pay me, if its not paid by the due date I'm on the phone asking why I haven't been paid, I give them the option of a bacs transfer then and there type affair (nicely of course). I also ask for cheques to arrive 5 days prior to due date to allow for them to clear, I do have to make a special journey for cheques after all.

I've also said in conversations that I would rather be told that a payment is going to be a couple of days late so that I know to cover any bills etc than just not get paid, I'm far more likely to be understanding if I have someone explain the situation earlier rather than me having to chase it up. It's even more annoying when the client knows theres going to be a delay on paying due to them needing to invoice themselves.

Having said that I'm also a bit different with how I charge, the first few times the client get an initial charge and then if they're good with paying I normally just invoice the whole thing at the end (very little overheads such as printing etc for my work). If they're late paying they lose any of the 'trust' benefits they've gained.
 
Old discussion but just thought I'd give an update. Had my final payment of money owed by the client this week, was all due for October last year but better late then never. I'm still getting calls from printers who haven't been paid a penny so I'm feeling quite lucky as I'd kind of written off the chances of this coming through.

Lesson learned going forward 50% upfront, no excuses, end of.
 
I get 50% and I just had a client pay 50% with no probs. I think if they want you then they will pay 50%.
 
It's also good for the client to have less to pay on completion, I'm sure there must be some psychological thing when paying the final payment that they only have half left...

(Obviously theres the opposite situation at the beginning but like tom said, if they want you...)
 
Yep, it is my standard policy but on this occasion I compromised and it came back to bite, won't be doing again.
 
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