Re: Need help with client's invoice please

Hey, Jason:

Let's say you have an iron clad agreement in place that does spell out all 
of these issues in detail.  This is what /I/ would do.... which, let me 
preface is not what everyone should do or can do...  ;-)  I am hard-core on 
the topic of not getting paid and all clients are told from the start what 
our policies are in this regard.  All too often off-line business folks 
just want their Web site without thinking of costs or long term investment 
involved.  And, when they start having cash flow problems - you don't want 
to be the one that doesn't get paid - at all.

At 12:16 PM 05/02/2001 -0400, Jason Ruble was curious and pondered:
>Hi HWG member,
>
>I have an invoice problem - could you please help? I built a web site for a
>sole proprietor who owns a franchise.  She's in Florida; I'm in North
>Carolina.

It is always most difficult collecting from folks who are not 
geographically located near you.  More of a reason to have stronger terms 
in your agreement to protect you as best you can when long-distancers pull 
this stuff.


>My contract says 'balance due upon launch of web site'.  I launched her site
>3/26 and mailed her an invoice for the balance due the next day. Balance due
>is @,@@@ (I know I'm not supposed to post actual figures.)

The List Guide in me thanks you....  ;-)

>I put on the
>invoice "5% Past 30 Days". (This means if her check doesn't arrive by the
>30th day past the date on the invoice, I would charge her 5% of the amount
>overdue.)

Then you charge her the 5%.  The last thing you want to do is not hold your 
rules with a fairly new customer.  They will plan on you being a nice guy 
down the road when they pull this again - and they will.   Clients //know// 
who they have to pay and who they can string along.

>I kept reminding her that her check was due right away.  She finally got a
>check to me but:
>
>1. It arrived 34 days after the date on the invoice.

How many reminders?  Sounds like you have given her the benefit of the 
doubt... 4 days - cut her some slack and let her know that you received the 
check and that in good faith you are waiving your late fee - this 
time.  Then back up your terms with action.

>2. More importantly, the check amount is only @@@ - less than half what the
>invoice was for.

Pull the site.

>  I've studied the invoice and don't see how she came up
>with the @@@ figure. The person who referred her to me says she is wealthy.

Pull the site.

>She _loves_ the web site and raved how it is #3 in Yahoo.

Well, sounds like you did your job and she can easily love a site she 
hasn't paid for!   Pull the site.  Put a nice coming soon page up /after/ 
you change the passwords and let her know that you will reinstate the site 
when you are paid in full according to the agreement she signed with you.

Yes, she may get mad but why?  Because /she/ didn't pay you?

>My invoice is
>perfectly fair and well documented. Not only am I out a whole lot of time,
>I'm out of pocket for fees I paid to search engines like Yahoo.

That's a yucky feeling isn't it!?  After one too many of those I decided it 
would not happen again.

>Luckily, I
>did require a deposit and two interim payments, so it isn't like I haven't
>been protecting myself at all.

The one thing I find in mentoring allot of folks is that they do protect 
themselves - within /their/ comfort levels of still having their clients 
like them or not get mad.  That is not a sound basis to form your policies 
or run your business.  Of course you want to have good relationships with 
clients - but what about those who don't pay you?  You need strong, clear 
policies  that you make a point of discussing with them.  Then you have to 
have the intestinal fortitude to enforce them.  That is also part of 
running a business, albeit not as fun or pleasant, but due to clients like 
you describe necessary to your bottom line.

Know that folks who start out this way will continue this way and this is a 
sign of lack of respect for the work you did holding up /your/ side of the 
agreement.  All too often trying to not cause waves causes you to loose 
time and money.  This is a business after all and there is no reason.... 
check, there are reasons which generally tend to be the exception.... I do 
appreciate when clients communicate their payment problems and then, cut 
them some slack - but the late fees still apply.

>  But I always leave a final payment until
>after the site is launched, because I don't think it's fair to make the
>client pay all of the fees in total before they even have a final launched
>web site. This has never happened to me before.

Why isn't that fair?  You did the work.  They approved the final site, 
hence, they approved the work - right?

>I'm thinking about calling her just to ask what her thinking is. Or should I
>just do this through the US mail?

Use your sparkling personality and make a call (snail mail and email is so 
impersonal and not as effective in situations such as this) in a concerned 
tone stating your terms are clear and was wondering why the full amount is 
not in your hands.  How she responds to this question will be very telling 
and guide you on how you should proceed.

>I also want to be prepared with a plan - to give her deadlines that she must
>meet (or this could drag on).  How do I handle this without loosing a
>client? What do I use for leverage?  Should I threaten to take down her web
>site by a certain date if she doesn't send me the rest of the money?

Well, here's the bottom line - some folks you don't want as clients - and 
this one has a big red flag over her head.  Leverage is the site - that is 
all you have.  Then, having a credit agency on hand to mark their record is 
your ace in the hole and most times more therapy than collections.

If they are not willing to have a professional mutually respectful 
relationship with you chances are they will not prove to be a profitable 
client.  Also, beef up your agreement based on this experience and set 
those plans.

Another option is to put her on what I affectionately call PIA (payment in 
advance of any work) terms.  They assume this acronym means something else 
and it was chosen for that reason.  ;-)

We do not launch until we are paid (exceptions are made - you can tell who 
reliable clients are very quickly in the process).  Passwords can be 
changed by those scrupulous few who are out to not pay.  Once we get paid 
in full, then the site launches and marketing efforts commence.  This is 
all in our contract, including deadlines for payments, late fees, launch 
dates and continuation fees.  I also have our policy statement in our 
client only support area on our site that reiterates these points very clearly.

Each client has to be treated differently as they are all unique 
personalities.  However, after over 6 years in this biz and knowing that I 
am a crystal clear communicator as is all the documentation they are given 
from the start, when folks just blow us off without any sort of 
communication knowing all of this -  it is nipped in the bud - 
yesterday.  The longer you don't address this situation the less power you 
have over it.

I understand it is difficult when for those who are starting out to be as 
tough as I am on these matters - but know I learned the hard way by being 
taken advantage of by long-distancers who thought they could just skip and 
change passwords, or even locals who figured because I drive a nice car 
that they didn't need to pay me on time and they needed the money 
more.  Pulease!  I did the work, I want to get paid!  Thousands of dollars 
will go uncollected because I was trying to understand, be fair or give 
them the benefit of the doubt.

Outside of those who personally call to explain their cash flow problems - 
which I'm a sucker for that every time - those who blow me off, know the 
process that then kicks in from late fees to changing passwords to pulling 
the site and then off to collections.

Even still, I have had customers who don't pay, so at the very least you 
can mark their credit record by reporting them.  There is a great service 
we use that is way inexpensive to handle this for you.  They sent out 
letters and then report to the top 3 credit agencies banks and loan 
companies use to determine credit worthiness.

<http://www.digitalwork.com/credit/baddebt/getitdone/>

Hopefully, this is just an oversight on her part because she is so busy not 
paying attention to (your) details and you won't need the above!  HTH!


TTYL!
/j

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