That chasing payment chestnut...
Discussion
A frequently discussed topic I'm sure.
I've had to chase late paying clients on a few occasions before, but have always managaged to get a satisfactory result before any bridges have been burnt.
Now however, I have a client who owes me a number of invoices totalling about 10% of my annual turnover. They are between 2 months and 3 weeks late at present and all my usual efforts have resulted in the client continuing to stall, making promises and not keeping them etc.
I'm reluctant to get legal as I don't really want to walk away from the potential future earnings from this client, but on the other hand this is causing me problems at the worst time of year.
What would people suggest is the next course of action?
I've had to chase late paying clients on a few occasions before, but have always managaged to get a satisfactory result before any bridges have been burnt.
Now however, I have a client who owes me a number of invoices totalling about 10% of my annual turnover. They are between 2 months and 3 weeks late at present and all my usual efforts have resulted in the client continuing to stall, making promises and not keeping them etc.
I'm reluctant to get legal as I don't really want to walk away from the potential future earnings from this client, but on the other hand this is causing me problems at the worst time of year.
What would people suggest is the next course of action?
If they're not paying you, do you really want their business? They obviously don't care that much about you or they'd pay something at least ...
One last call/letter detailing all outstanding invoices, what contact you have had about them, what "promises" they have made and broken, give them 7 days to pay or go legal with no further notice.
Generally works. And if you have a clause in your contract to invoice for more, then use it.
Otherwise all you can do is go legal and make sure they know they will be paying your costs.
How much are you talking about? If each invoice is less than £5k you can do them through small claims for minimal cost.
One last call/letter detailing all outstanding invoices, what contact you have had about them, what "promises" they have made and broken, give them 7 days to pay or go legal with no further notice.
Generally works. And if you have a clause in your contract to invoice for more, then use it.
Otherwise all you can do is go legal and make sure they know they will be paying your costs.
How much are you talking about? If each invoice is less than £5k you can do them through small claims for minimal cost.
An order is not an order till the money is in the bank.
Go after it hard, if it was gas or electric he would be cut off.
Do the same.
Being scared of not getting future business is no reason not to go after the money, and if the client is having problems paying now, what good will they be in the future?
Cut your losses, be firm but not rude, try not to burn the bridge however, it is your money.
Go after it hard, if it was gas or electric he would be cut off.
Do the same.
Being scared of not getting future business is no reason not to go after the money, and if the client is having problems paying now, what good will they be in the future?
Cut your losses, be firm but not rude, try not to burn the bridge however, it is your money.
Ash 996 GT2 said:
Being scared of not getting future business is no reason not to go after the money, and if the client is having problems paying now, what good will they be in the future?
Often it isn't that simple. We currently have a number of clients who owe use money. One of them is a local small business who has been hit by their clients holding back payment. Whilst I feel that's no excuse for them to pass on the problem to us, I weighed it up and took the decision to give them leeway whilst they try to get their business back on track. They have been with us for a while, and if there's any chance of them pulling through, they will remember the fact that we could have sent them into administration, but didn't.Last week they did manage to pay off a chunk as they had promised to do. At the time I feared they were just stalling, but they have come through so far.
My point is - they are having difficulties paying at the moment, but that has no bearing on their willingness to pay in the future (assuming they pull through).
zadumbreion said:
Ash 996 GT2 said:
Being scared of not getting future business is no reason not to go after the money, and if the client is having problems paying now, what good will they be in the future?
Often it isn't that simple. We currently have a number of clients who owe use money. One of them is a local small business who has been hit by their clients holding back payment. Whilst I feel that's no excuse for them to pass on the problem to us, I weighed it up and took the decision to give them leeway whilst they try to get their business back on track. They have been with us for a while, and if there's any chance of them pulling through, they will remember the fact that we could have sent them into administration, but didn't.Last week they did manage to pay off a chunk as they had promised to do. At the time I feared they were just stalling, but they have come through so far.
My point is - they are having difficulties paying at the moment, but that has no bearing on their willingness to pay in the future (assuming they pull through).
It's when they stall without giving any reason that I start getting nervous because they are offering me nothing by way of explanation and nothing by way of payment.
As an update, I have been promised payment in full on Friday (tomorrow). If it's not forthcoming, then all of my Christmas spirit will have been used up.
groomi said:
zadumbreion said:
Ash 996 GT2 said:
Being scared of not getting future business is no reason not to go after the money, and if the client is having problems paying now, what good will they be in the future?
Often it isn't that simple. We currently have a number of clients who owe use money. One of them is a local small business who has been hit by their clients holding back payment. Whilst I feel that's no excuse for them to pass on the problem to us, I weighed it up and took the decision to give them leeway whilst they try to get their business back on track. They have been with us for a while, and if there's any chance of them pulling through, they will remember the fact that we could have sent them into administration, but didn't.Last week they did manage to pay off a chunk as they had promised to do. At the time I feared they were just stalling, but they have come through so far.
My point is - they are having difficulties paying at the moment, but that has no bearing on their willingness to pay in the future (assuming they pull through).
It's when they stall without giving any reason that I start getting nervous because they are offering me nothing by way of explanation and nothing by way of payment.
As an update, I have been promised payment in full on Friday (tomorrow). If it's not forthcoming, then all of my Christmas spirit will have been used up.
We do support for clients, some have had issues and been straight with us.
We have not cut them off, we have given them a payment holiday but still extended support services, probably the only way to explain it. When the economy comes back they will be able to pay again.
If we stand by each other, tell the truth and a lot of trust we will all come out of this together is my view. And yes, there will be casualties.
However, we have had some very bad experiences, tends to be in the same sector, don’t ask as I will not reveal.
When they have problems they make you feel as if it is your fault, blame you for their problems and lie to their back teeth, check is in the post, you are on the next check run etc.
When that happens I have no sympathy at all. As far as I am concerned, I get the money as fast as possible.
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