Cutting off Internet, Email and Telephones
Discussion
We are a small IT company, like everyone we are struggling to get funds in, we provide Internet, email, telephone and other general IT services for our customers who we bill.
Two customers who have repeatedly promised to pay but nothing has turned up, one promise after another, they are quite substantial amounts owed now and because they are billed monthly the balance is increasing, some invoices are 6 months old. I've spoken with the directors who have assured me the funds will be paid and nothing is in dispute.
These are essential services so I don't want to cut them off but I can't carry on paying out myself. They have previously been good payers and they've never concerned me hence why it's grown so much, I've been dealing with them over a decade, but under the current circumstances I need to get the cash in and I've already offered a payment plan and been patient enough.
I assume there are no special circumstances in cutting off these type of services as it could have a massive impact on them(in which case our payments should be a priority !)
Would the correct procedure be:
Write formally to say we are withholding credit and give 7 days notice to pay or they get cut off.
Cut them off, if they pay reconnect them
Use a debt recovery or Small claims court to recover the debt.
We've been really lucky and have never had to do this type of stuff, but need to put our business first.
Two customers who have repeatedly promised to pay but nothing has turned up, one promise after another, they are quite substantial amounts owed now and because they are billed monthly the balance is increasing, some invoices are 6 months old. I've spoken with the directors who have assured me the funds will be paid and nothing is in dispute.
These are essential services so I don't want to cut them off but I can't carry on paying out myself. They have previously been good payers and they've never concerned me hence why it's grown so much, I've been dealing with them over a decade, but under the current circumstances I need to get the cash in and I've already offered a payment plan and been patient enough.
I assume there are no special circumstances in cutting off these type of services as it could have a massive impact on them(in which case our payments should be a priority !)
Would the correct procedure be:
Write formally to say we are withholding credit and give 7 days notice to pay or they get cut off.
Cut them off, if they pay reconnect them
Use a debt recovery or Small claims court to recover the debt.
We've been really lucky and have never had to do this type of stuff, but need to put our business first.
What do the contract T & C's say about non payment of outstanding debt and what will be done in that event?
Have you sent chase letters, saying you have 60 days to pay, now 30 days, now 7 days, now going to small claims?
I am not an expert and understand that you want to keep your customers but not at any cost.
Have you sent chase letters, saying you have 60 days to pay, now 30 days, now 7 days, now going to small claims?
I am not an expert and understand that you want to keep your customers but not at any cost.
Odd as it might sound, they've never signed a formal service agreement, and even if they did it was over 10 years ago (more like 15 for one of them!) so not much chance of finding it. I invoice them every month and there is a note on the invoice just saying what the notice period is to terminate the service (90 day) nothing else. They've certainly not said that they unhappy with the service and have been paying for many year, not always on time but paying none the less.
We've never had cash flow issues but with things as they are I'm getting in as much outstanding debt as possible, it's not that I'm asking for invoices done in the last moth or two, just the ones over 90 days. I just want to check if I do cut them off that I'm not going to get in legal trouble, but they've had warnings and I've tried to be as helpful as possible,
We've never had cash flow issues but with things as they are I'm getting in as much outstanding debt as possible, it's not that I'm asking for invoices done in the last moth or two, just the ones over 90 days. I just want to check if I do cut them off that I'm not going to get in legal trouble, but they've had warnings and I've tried to be as helpful as possible,
Mr Pointy said:
Have a brief "IT issue" & tell them you're prioritising customers when they phone to complain. Make sure it's resolved within the SLA though.
Definitely this.Part of my business is running internet/website services and whenever we've had companies promise payment and fail to deliver on multiple occasions, email accounts connected with their server have been known to suffer sporadic issues - issues which are very quickly dealt with, but only once cleared payment has been received.
IT issues do concentrate people's minds on what's important to keep their business running smoothly.
Casa1862 said:
Two customers who have repeatedly promised to pay but nothing has turned up, one promise after another, they are quite substantial amounts owed now and because they are billed monthly the balance is increasing, some invoices are 6 months old. I've spoken with the directors who have assured me the funds will be paid and nothing is in dispute.
These are essential services so I don't want to cut them off but I can't carry on paying out myself. They have previously been good payers and they've never concerned me hence why it's grown so much
How can they be considered good payers if you have unpaid invoices that are 6 months old? Services performed that many months ago are long since forgotten - especially in small business IT. These are essential services so I don't want to cut them off but I can't carry on paying out myself. They have previously been good payers and they've never concerned me hence why it's grown so much
Good payers in that bills have been paid, 6 months is the extreme end and I’ve been chasing for 4 weeks now, they’ll run into 90 days and then pay a decent batch in one go, previously I was happy with this.
I know a lot of staff are furloughed but not the directors, as no one in the office, little point throttling the bandwidth as only the office leased line we supply. Cutting off email and phones will certainly be noticed. We also renew their domains and control DNS which have also not been paid.
They’ve had some new staff in who have a say in IT and I’m sure they will be threatening legal against us, but not sure how much more we could do for them.
I know a lot of staff are furloughed but not the directors, as no one in the office, little point throttling the bandwidth as only the office leased line we supply. Cutting off email and phones will certainly be noticed. We also renew their domains and control DNS which have also not been paid.
They’ve had some new staff in who have a say in IT and I’m sure they will be threatening legal against us, but not sure how much more we could do for them.
dangerousB said:
Mr Pointy said:
Have a brief "IT issue" & tell them you're prioritising customers when they phone to complain. Make sure it's resolved within the SLA though.
Definitely this.Part of my business is running internet/website services and whenever we've had companies promise payment and fail to deliver on multiple occasions, email accounts connected with their server have been known to suffer sporadic issues - issues which are very quickly dealt with, but only once cleared payment has been received.
IT issues do concentrate people's minds on what's important to keep their business running smoothly.
I wouldn't go down the path of creating issues on their systems just to refocus their attention on to your unpaid invoices - it's a highly unprofessional thing to do, IMO.
Couldn't you have another discussion with the directors and say you'll need to suspend the services if it's not paid in x days? Also point out the implications of a domain not being renewed etc. Basically a much more frank discussion with the tone of it being the last time you are prepared to chase. Unfortunately it's also the kind of discussion that can sometimes lose clients for good, but I guess you'll have to weigh that up. Shouldn't they be on some kind of monthly direct debit anyway?
Couldn't you have another discussion with the directors and say you'll need to suspend the services if it's not paid in x days? Also point out the implications of a domain not being renewed etc. Basically a much more frank discussion with the tone of it being the last time you are prepared to chase. Unfortunately it's also the kind of discussion that can sometimes lose clients for good, but I guess you'll have to weigh that up. Shouldn't they be on some kind of monthly direct debit anyway?
Edited by Bikerjon on Saturday 11th April 23:17
Bikerjon said:
I wouldn't go down the path of creating issues on their systems just to refocus their attention on to your unpaid invoices - it's a highly unprofessional thing to do, IMO.
Really?? I'd say it's a fundamentally unprofessional thing not to pay for services you've received.Any leverage you have, I'd use. If you don't think that's appropriate more fool you.
Call them and tell them you want all invoices over x days paying within 24 hours or you’ll suspend the services until all invoices are paid in full.
They might try to call your bluff, so make sure you’re willing to actually turn things off. If you have control of their domains and telephone numbers you have massive leverage - it would take you about 2 minutes to point their website URL to their largest competitors IP address for example.
Don’t mess about creating issues, I agree it’s unprofessional. Play with a straight bat - tell them you’ll turn things off and if they don’t pay, do it.
They might try to call your bluff, so make sure you’re willing to actually turn things off. If you have control of their domains and telephone numbers you have massive leverage - it would take you about 2 minutes to point their website URL to their largest competitors IP address for example.
Don’t mess about creating issues, I agree it’s unprofessional. Play with a straight bat - tell them you’ll turn things off and if they don’t pay, do it.
I would caution being careful about doing anything untoward with their domain name or DNS.
It's one thing if you host the DNS and decide to switch it off because they haven't paid you - that might be quite right and proper.
It's totally improper IMO if it's a hosted service that they have paid for but that you control for technical reasons and you choose to change their DNS or where their domain points to to try and "force" them to pay.
I'm simply suggesting be sure of the legality of anything that you do
It's one thing if you host the DNS and decide to switch it off because they haven't paid you - that might be quite right and proper.
It's totally improper IMO if it's a hosted service that they have paid for but that you control for technical reasons and you choose to change their DNS or where their domain points to to try and "force" them to pay.
I'm simply suggesting be sure of the legality of anything that you do
b
hstewie said:
hstewie said: It's totally improper IMO if it's a hosted service that they have paid for but that you control for technical reasons and you choose to change their DNS or where their domain points to to try and "force" them to pay.
I'm simply suggesting be sure of the legality of anything that you do
I completely agree. I wouldn't want my post being interpreted as "anything goes" - with the position of being in control of an individual's/company's IT comes a responsibility and repointing a DNS (for instance) is a blatantly unprofessional breach of that responsibility.I'm simply suggesting be sure of the legality of anything that you do
However, a mailbox exceeding quota (for instance) doesn't create chaos, but is enough of an irritant to achieve a phone call in pretty short order and create an environment where both parties can achieve their aims.
Everyone's different, but I've found that most people I've worked with respond better to the carrot. I've tried the stick, written the warning letters. Sometimes they've worked and payment's been forthcoming. Sometimes they haven't and people have "invented" issues to eek out a few more days or weeks. Other times I've had to switch services off and have further dialogue. Other times I've had to take people to court.
What I do know is that using the stick creates a simmering resentment and with every company/individual I've ever had to do it with, within a fairly short period of time thereafter we've parted ways. Now you may say that that's a good thing - after all, anyone who doesn't pay or who is very slow in paying isn't worth having as a customer, but there are many reasons why these situations occur and it's a fairly small proportion (in my experience) that are because someone is a serial offender.
What I also know, is that everyone I've used the carrot with either still works with me, or I have a good relationship with them.
So I guess, to qualify my earlier post, definitely use your leverage, play to your strengths, be creative and be reasonable.
deeen said:
dangerousB said:
Mr Pointy said:
Have a brief "IT issue" & tell them you're prioritising customers when they phone to complain. Make sure it's resolved within the SLA though.
Definitely this.Part of my business is running internet/website services and whenever we've had companies promise payment and fail to deliver on multiple occasions, email accounts connected with their server have been known to suffer sporadic issues - issues which are very quickly dealt with, but only once cleared payment has been received.
IT issues do concentrate people's minds on what's important to keep their business running smoothly.
If they haven't paid for 6 months then in the current situation they're not going to want to pay now. Our accounts lady is still working - in theory another director could set up a payment but I doubt they'd know what to do these days.
Some pretty questionable advice here.
I'd be using the small business late payments regulations https://www.gov.uk/late-commercial-payments-intere... in short, if they want to use you as a bank then charge them more than the bank would, namely 8% + base (just do 8% for simplicity).
If they have short term cash flow issues and don't mind paying the 8% then you win.
Or, (as always happens in my case) you send the letter advising it will start from the date of the first late payment onwards accumulating at £xx per day -somehow the magic money tree pays immediatly.
I'd be using the small business late payments regulations https://www.gov.uk/late-commercial-payments-intere... in short, if they want to use you as a bank then charge them more than the bank would, namely 8% + base (just do 8% for simplicity).
If they have short term cash flow issues and don't mind paying the 8% then you win.
Or, (as always happens in my case) you send the letter advising it will start from the date of the first late payment onwards accumulating at £xx per day -somehow the magic money tree pays immediatly.
Gassing Station | Business | Top of Page | What's New | My Stuff