Late payments by clients

Submitted by iestynx on Mon, 2008-09-01 16:29.

Member's Forum

I have a little line at the end of my invoices stating that "All payments to be made within 15 days of the date of the invoice". I have this on my invoice after noticing it on invoices I have received from some companies.
If a payment is not made within this timeframe what can I do? what are my rights? what do you do? Do you have something similar on your invoices?
One company took 6 months to pay me, if it was a large job I could have gone out of business and failed to pay my mortgage, have these people no clue about how important it is for us to be paid on time?

first, let me say i hope

Submitted by gwells on Mon, 2008-09-01 17:01.

first, let me say i hope you're getting deposits. that protects you at least a little bit against non-payment.

second, if it's a really big job, particularly one that takes a long time, make sure you are getting interim payments along the way. that way, if they're not keeping up with payments, you can stop doing work at risk until they catch up with what you're owed. you should pick logical points in the process where you're delivering interim work and require payments that are commensurate with the amount of work done so far.

last, what you need to add to your contract is what the penalty is for not paying on time. here in the US, my contract stats that all payments are net 15 (which means they must be paid w/in 15 days) and that past that, there is a 1.5% interest penalty calculated monthly.

now, the reality is you'll probably never get the interest, but "forgiving" the interest can be part of the incentive to get them to pay you.

gwells said it all. In

Submitted by 3dogmama on Mon, 2008-09-01 18:46.

gwells said it all. In Canada, the norm I believe is 30 days. And yes, we're way too laid back.
Collecting it, again as gwells pointed out, is moot. It's just one of those things in life that aren't worth pursuing. However, I'd be curious to know if anyone here has successfully collected on that kind of penalty?

"Without deviation from the norm, progress is not possible."
— Frank Zappa

Simply tell them

Submitted by thornysarus on Mon, 2008-09-01 19:06.

Simply tell them that you can not work for them unless they pay on time. And follow through.

I bill my clients net-30 and they sometimes go over that. It happens. That's just business.

I also have a policy that if a client has an overdue invoice, all work in-house grinds to a halt until they come current. I've had to enforce this on a couple of occasions and it's quite embarrassing for them when this happens.

Terry Thornhill

e-zign Design Group

Curiousity killed the cat...

Submitted by 3dogmama on Mon, 2008-09-01 19:45.

I agree with your points and practice those. However, I am curious as to how you treat new business? Do you give them 30, or request funds up front? Also, what about those jobs that you do for the "twice-a-year-biggyjob-client" who decides this time to pay you 5 months later just before beginning the next highly lucrative contract? Do you diss them and bill them differently? Discuss what happened on the last bill and risk the chance of losing that account? Or, do you increase the cost on them to offset the time that might be required to "carry" them? What will it be. Door 1, 2 or 3?

...but satisfaction brought it back.

**please note that the author of this post has been imbibing WAY too much this holiday weekend** :)

"Without deviation from the norm, progress is not possible."
— Frank Zappa

New Business

Submitted by thornysarus on Tue, 2008-09-02 13:16.

It depends really.

I only take referrals and sometimes those I turn away. The reason is because I stay busy enough already, and if the new project goes south, I'll have someone to go to immediately and choke for referring them to me in the first place.

I do have a policy that all first-time jobs are COD, but that depends on the job, the referral and the nature of the project. In other words, I use my better judgement.

I've been doing this a long time and yes, I've been screwed more times than I can count.

BUT... I still maintain that I'd rather trust people until they give me a reason not to. That's just personal policy. That's also just good Karma.

Read my Terms of Service. These are carefully-worded and have served me well over the years: http://e-zign.com/policyterms.htm

Terry Thornhill

e-zign Design Group

Thanks. Good set of rules

Submitted by 3dogmama on Tue, 2008-09-02 13:32.

Thanks. Good set of rules you've written up there. I, too, have been in business for several years but am always curious to see how others deal with deadbeats.
Cheers.
3dog.

"Without deviation from the norm, progress is not possible."
— Frank Zappa

Having "arbitration" as your

Submitted by natobasso on Tue, 2008-09-02 16:34.

Having "arbitration" on your contract is a good idea as well. It might be your next step in collecting the money in this case if they continue dragging their feet.

Many clients aren't aware of your need of liquidity and they don't care; but they should pay you within 30 days which is the acceptable timeframe.

Definitely bill in stages next time, and never release your artwork till you have a PO number or check in hand for the final bill.

----
Natobasso
dirtandrust.com
"Powerpoint is not a design application"

Thanks for the help

Submitted by iestynx on Wed, 2008-09-03 10:05.

Thanks everyone for your help. For large jobs from now on I will definitely be asking for a percentage upfront as I have never done this and have just trusted people in good faith.