Help! Trouble with payment for web development work

[SlimJ]

Hey guys,

Early last year I agreed with a client to develop 2 of their websites (sorry, don't want to give names of the businesses atm), the smallest one of which is finished and up and the other bigger website 99% complete, but trying to get the final bit of information out of them has proved very difficult, I tried most of last year to get it all tied up but everything was slow.

The details of the job and costing was all agreed and signed for, no problems, bulk of the work was done to the agreed time and I kept in touch to let them know how it was all progressing.

I have recently spoke to a director and he says he was unaware of a website being developed for either of the businesses and has said he doesn't need the website (thanks for that, why wasn't I told before it was all agreed???). Now I've agreed it all, and had it signed for from the beginning by someone of authority, and didn't know that I had to deal with this director, I was never told and the development of the site went smoothly up until the final bit.

Basically, I have now had enough and the person who I have been dealing with for both sites has not responded to my emails or calls even when asked by one of the directors, I've been trying to arrange a meeting to get everything tied up so I can invoice them, but he hasn't been forthcoming. For the larger site, the director has apologised and tried to be a bit 'friendly' and said that "the business isn't in the right financial position to go ahead with the website" but according to other sources they have just registered for VAT and are doing well. Sounds to me that he just doesn't want to pay for the 100 odd hours that we put into the website!!

What should I do now? I feel I should just invoice them for both jobs and then wait the 14 days for payment, then chase them, if still nothing, should I look at going further and taking it to a small claims court? I can't see that I'm in the wrong when its all been agreed ages ago and their the ones causing the problems!

As I say, I have a signed agreement with costs, and plenty of email correspondence between me and them, and also a witness who I dealt with during development.

Cheers for any advice.
James

[dabeeeenster]

If you have a signed contract it's pretty straight forward. Invoice them, wait until the invoice is overdue, give them a call to see if they are going to pay it and if not go here:

https://www.moneyclaim.gov.uk/csmco2/index

Fill that in. 90% guaranteed that they will pay when the letter from the court comes through.

Try and arrange payment terms first though. If they are having cash flow issues, talk about having them pay it off in monthly installments. That can sometimes work...

[SlimJ]

Cheers for the advice, will send them an invoice and get the ball rolling.

One thing I didn't make clear about is that the larger of the 2 websites isn't up and live as it was awaiting the final finishing touches before the final launch... but this does mean that all the hard work was already done!

It was hosted for development purposes so they could access it and make sure everything was fine (which they were encouraged to do on more than 1 occassion!) but as this has been going on so long the hosting has now expired and we won't renew until they give us an idea of what they want us to do (another reason for trying to contact them). However, we can host it locally and give access to it that way for development and we have suggested this.

Cheers
James

Edited by SlimJ on Wednesday 28th March 23:11

[dabeeeenster]

In that case I'd say invoice them for 95% of the original budget.

[justinp1]

dabeeeenster said:

If you have a signed contract it's pretty straight forward. Invoice them, wait until the invoice is overdue, give them a call to see if they are going to pay it and if not go here:

https://www.moneyclaim.gov.uk/csmco2/index

Fill that in. 90% guaranteed that they will pay when the letter from the court comes through.

Try and arrange payment terms first though. If they are having cash flow issues, talk about having them pay it off in monthly installments. That can sometimes work...

Good advice there.

I have been in similar situations where a project we have been working on suddenly gets no response from contacting the company.

The 'financial position' of the company probably has more than a bit of co-incidence that they firstly dragged their heels in wanting to complete the project, and thus need to pay for it. The other bit of a fudge is that the director didnt know about the sites being authorised...

If they have only just registered for VAT ie turnover of £60k a year, this has to be a pretty small company, presumbly started on the directors own money. What are the chances of a non-authorised person just deciding one day to get a website developed and do all the communications with you without the directors knowledge... I think not...!

The first thing you have to do is invoice them. If you dont do that then you cannot chase the payment. Invoice for the full agreed amount on the basis that you have completed all of the work possible and that without the reciprocal input is the sole reason the final touches have not been completed. I would give them 7 days to submit any changes needed of you will deem the project complete.

The 'standard' or default invoice period is 28 days, although in this kind of situation, if the time limit is going to be allowed to lapse by the company anyway, as you suggest, 14 days is more applicable unless other terms have already been agreed. However, I would state that you would be happy to negotiate staggered payment terms if they can be agreed before the invoice becomes due.

There are three reasons for this. The first is that this may make payment possible without further action, and you might actually get paid quicker. The second is that if you do have to take it further you can show that you have been more than reasonable. The most important though is that by agreeing to payment terms, they are agreeing to pay - thus if they later lapse you wont have to then counter reasons/excuses for non-payment for non-completion etc. A possible scenario is that if you *did* take legal action, they may deny the claim as the work is not completed for reasons X, Y and Z, and if they are canny they will know that many of these cases are settled out of court for a lower amount as it is really not worth the time fighting unless the sums involved seriously outweigh the legal costs and hassle.

[SlimJ]

Cheers for the advice Justin, thats really useful!

Had a reply back from an email I sent, but this wasn't helpful at all, basically saying its nothing to do with him now/he's too busy/he's not involved with it... just excuses and trying to wriggle out of paying at a guess. I think they are hoping I will just 'go away' and forget about asking for payment... but I don't think I'll be doing that!

I agree about negotiating payment terms, I'm quite happy to do that, as long as I get what I'm owed for the work produced in good time.

They no longer want the website so I don't know if saying to them "Give me the final finishing touches and I'll complete the site for you" will get anywhere, although I'm still very happy to complete the website but as it has gone on for so long without any input from them (even though I've asked many times) you can understand why I no longer want to chase and just want to be paid for the work done.

I have sent another email today stating I'm invoicing them for the work, and detailed clearly why I'm doing this even though the site isn't complete (as the Director said "No, we dont want it". IMO, I can't see a way they would be able to wriggle out of not paying up.

Cheers
James

[justinp1]

SlimJ said:

Cheers for the advice Justin, thats really useful!

Had a reply back from an email I sent, but this wasn't helpful at all, basically saying its nothing to do with him now/he's too busy/he's not involved with it... just excuses and trying to wriggle out of paying at a guess. I think they are hoping I will just 'go away' and forget about asking for payment... but I don't think I'll be doing that!

I agree about negotiating payment terms, I'm quite happy to do that, as long as I get what I'm owed for the work produced in good time.

They no longer want the website so I don't know if saying to them "Give me the final finishing touches and I'll complete the site for you" will get anywhere, although I'm still very happy to complete the website but as it has gone on for so long without any input from them (even though I've asked many times) you can understand why I no longer want to chase and just want to be paid for the work done.

I have sent another email today stating I'm invoicing them for the work, and detailed clearly why I'm doing this even though the site isn't complete (as the Director said "No, we dont want it". IMO, I can't see a way they would be able to wriggle out of not paying up.

Cheers
James

Agreed.

The only reason why I mentioned going down the route of asking them to finsih the site is to show and prove that you are able and willing to complete the work as per your contract.

If you are willing to complete the contracted work, but the other party wishes to breach the contract then that stands you in good stead to invoice of the full amount.

On the other side of the coin, if you fast forward to six months time and they still havent paid, and you have to follow through with taking them to court, they could in their defence say that the site was 50% finished (or any other amount) and it was mutally agreed to end the contract at that point and thus they will be 'happy' to pay pro rata. They would argue one way, you would argue the other with what could be proved, which may be difficult, so even if you 'win' the case you may be financially down for only the work agreed completed. The other factor is that they could create a story around that they were happy to finish the work but you didnt contact them and they had to finish it themselves...

That would be why it would be important to ask them for any changes needed and give them a time limit that you will otherwise assume the work finished. You then have the proof that they have not questioned the quality or content of your work and you work is completed. Otherwise you leave yourself open to excuses for non-payment later on.

I have been in many sticky situations like this where non-payers will create all types of reasons for non payment - often the first you hear of them is a month after the invoice is due! Thats why it is important to get everything in writing - paper writing that is and preferably recorded delivery - so that you can prove that you have made your position clear and secondly it makes it more difficult for the slippery non-payer to change their story later on.