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January 11, 2009 at 9:50 pm #1002569Up::0Jay, post: 1680 wrote:Just a quick question – considering you have prepaid terms, do you send an invoice the moment the estimate has been signed off and received then?
We put out payment terms on the last page of our estimate, (50% deposit and 50% on completion), and the estimate includes the total figure, and the 50% figure that they need to pay to start the job. (inc. GST to avoid the 10% of clients who forget to pay GST)
As soon as the estimate is accepted we fire off the 50% deposit invoice, but in most cases we receive payment as confirmation, so the invoice is more of a receipt which is send afterwards.
In a situation like the one you decribed, I would send an email explainnig that you have completed the work outlined in the initial project breif, and require payment for that. Any amemdments or changes to the breif will be considered a seperate project, and estimated accordingly. Follow up with a phone call.
Good luck.
January 13, 2009 at 7:53 am #1002570AnonymousGuest- Total posts: 11,464
Up::0Jay, post: 1598 wrote:Did you ever have any issues with anyone not wanting to pay upfront because you hadn’t worked with them before?Jay
Hi Jay,
In relation to your comment here, I used to get worried in the same way that if I asked clients to pay upfront they might not go ahead with the work. I have found the ones that have an issue with it are usually the same ones you have money troubles with the whole way through. Implementing a deposit or pre-pay system with signed terms and conditions helps to sift out the clients that are serious about working with you and valuing your services from those people who are very good at avoiding payments. Likely chances are, if they have made it complicated for you, you are probably not the only one.
I think it’s also about being confident in presenting your terms. If you are not apologetic about it and are consistent in sticking to the system you put in place, you might be surprised how well people accept it.
Cheers
BronwynJanuary 13, 2009 at 11:33 am #1002571Up::0I offer a subscription based service or you can pay in prepaid blocks of 10 hours. My clients prefer it this way because they know exactly how much they owe and it helps with my cash flow. There are obviously other benefits for my clients such as priority service and a discount on the PAYG hourly rate.
As long as you are happy with the terms and follow up the non-payers when your invoice is due, then that’s all that matters.
January 19, 2009 at 12:50 am #1002572Up::0Jay, post: 1545 wrote:Hi there
Hi Jay,
It’s all in the initial agreement I think. Unless the client is somebody I am absolutely sure of I get 50% of the quoted figure up front and the rest on completion. I also try and get it paid by credit card, so I have the number. Be very specific in confirming the brief and about the number of revisions and alterations your quote includes. If they want more, re-quote and get their written agreement. Sounds tough I know but these stalling tactics can be really annoying and cost you a fortune, even your business.Good luck.
January 19, 2009 at 2:18 am #1002573Up::0Back in the day when I was doing some debit collections I found that sitting in their front office for awhile tended to make them pay up and if they didn’t I would them serve them, normally with a small claims, which tended to make them take notice and then pay.
If they still didn’t pay we went to the judge to get an oral examination ordered. All the while their bill is getting bigger and bigger.
When they have to appear in front of a judge and explain why they haven’t paid your bill tends to make them think twice and to pay up.
Yes, it has cost you some time and money, but it then gets out that so and so doesn’t pay their bills and was taken to court and this way they don’t catch another person as well.
January 23, 2009 at 6:48 am #1002574Up::0WildAboutHarry, post: 1717 wrote:Jay, this can be a tricky one.I work on a monthly invoicing cycle, as that’s what both my clients and my competitors do.
If I was quoting on a job to a specific brief my quote would include the total, but would allow for monthly payments of the work done to date. It would also include X number of hours for amendments/edits etc at no charge and note that changes to the brief would require changes to the quote. Above that, the quote would say that I charge $X per hour for amendments/edits that go beyond the allowed amount. I then keep in touch with the client as I go about where we are up to, let them know that an invoice for part of the project is coming etc, and to let them know if the project was looking like overrunning the original budget.
I notice that some people who have replied want payment upfront – I have to disagree with the “never” work without payment upfront (I have never worked WITH payment upfront!), as it really depends on your clients are and their policies as to whether or not this is workable. My clients are all large corporates and generally the rule – outside of the control of the person signing the invoice for payment – is that they will not pay the final $ on a job until the work is complete.
I guess it all depends on the nature of your relationship too. All of my clients are long term, monthly billing – the newest is just under two years old, and I have a few more than five years old (I have been in business 7 years, and still have my foundation clients). I’m in it for the long term relationships, and am prepared to give-a-little for cashflow knowing that I’m preserving a long term relationship.
As far as your immediate problem goes – it is time to invoice your client. Call them first, and say that as the project is dragging on unexpectedly, you plan to invoice for the work you have done to date.
But the lesson for the future is to look at your terms on your future quotes and in any contracts you have with clients. When I started my business I invested the $ in getting legal advice to get good contracts and terms in place, knowing that my clients will not live or die on whether they pay me on time (they are huge companies, mine is just me!) but that I would. I strongly recommend this as it can save you a lot of pain and cashflow problems!
WildAboutHarry
Hi Harry
Sorry for the late response! I do appreciate your time and advice and thank you for sharing your thoughts. They have given me some great insight. The dilemma is ongoing and I am about to give up the process of chasing payment. The client finally got in contact with me today and wrote me some nonsensical diatribe and actually acused me of being badgering…….. even though the account is now coming up to 2 months overdue! Go figure.
All in all, it has been a valuable experience and one I won’t repeat or hopefully go through again due to reviewing my processes.
Jay
January 23, 2009 at 6:51 am #1002575Up::0BrightSpark, post: 2060 wrote:Back in the day when I was doing some debit collections I found that sitting in their front office for awhile tended to make them pay up and if they didn’t I would them serve them, normally with a small claims, which tended to make them take notice and then pay.If they still didn’t pay we went to the judge to get an oral examination ordered. All the while their bill is getting bigger and bigger.
When they have to appear in front of a judge and explain why they haven’t paid your bill tends to make them think twice and to pay up.
Yes, it has cost you some time and money, but it then gets out that so and so doesn’t pay their bills and was taken to court and this way they don’t catch another person as well.
Thanks bright spark! Sorry for the delay. Nice to hear your feedback. Things have a got a little ugly of late with this client, but I now see the entire process as a great learning curve for me and a situation I will hopefully avoid in the future due to the new processes I have in place. Thanks for your words and wisdom.
Kind regards
JayJanuary 23, 2009 at 6:54 am #1002576Up::0BuckinghamW, post: 2054 wrote:Jay, post: 1545 wrote:Hi there
Hi Jay,
It’s all in the initial agreement I think. Unless the client is somebody I am absolutely sure of I get 50% of the quoted figure up front and the rest on completion. I also try and get it paid by credit card, so I have the number. Be very specific in confirming the brief and about the number of revisions and alterations your quote includes. If they want more, re-quote and get their written agreement. Sounds tough I know but these stalling tactics can be really annoying and cost you a fortune, even your business.Good luck.
Hi Wendy
Sorry for the delay and thank you for your advice, it is much appreciated. I have now reviewed my internal processes to hopefully avoid a repeat situation. The client has turned ugly on me and well, I guess I just need to put this all down to a valuable exercise in learinng ways to run my business better.
Kind regards
JayJanuary 23, 2009 at 6:56 am #1002577Up::0tildavirtual, post: 1876 wrote:I offer a subscription based service or you can pay in prepaid blocks of 10 hours. My clients prefer it this way because they know exactly how much they owe and it helps with my cash flow. There are obviously other benefits for my clients such as priority service and a discount on the PAYG hourly rate.As long as you are happy with the terms and follow up the non-payers when your invoice is due, then that’s all that matters.
Hi Tilda
Sorry for the delay and thank you for your advice. It has given me food for thought. I appreciate your time and I have taken your thoughts onboard.
Kind regards
JayJanuary 23, 2009 at 6:59 am #1002578Up::0BeniCreative, post: 1866 wrote:Hi Jay,In relation to your comment here, I used to get worried in the same way that if I asked clients to pay upfront they might not go ahead with the work. I have found the ones that have an issue with it are usually the same ones you have money troubles with the whole way through. Implementing a deposit or pre-pay system with signed terms and conditions helps to sift out the clients that are serious about working with you and valuing your services from those people who are very good at avoiding payments. Likely chances are, if they have made it complicated for you, you are probably not the only one.
I think it’s also about being confident in presenting your terms. If you are not apologetic about it and are consistent in sticking to the system you put in place, you might be surprised how well people accept it.
Cheers
BronwynHi Bronwyn
Thank you. I agree, confidence in your work and offering is integral……… this situation has given me more confidence in a way because I know my worth. But, in saying that………. it has been uncomfortable for me too. I have now reviewed my processes which will potentially avoid a repeat situation in the future. Thank you for your time.
Kind regards
JayJanuary 23, 2009 at 7:02 am #1002579Up::0Tristan Boyd, post: 1758 wrote:We put out payment terms on the last page of our estimate, (50% deposit and 50% on completion), and the estimate includes the total figure, and the 50% figure that they need to pay to start the job. (inc. GST to avoid the 10% of clients who forget to pay GST)As soon as the estimate is accepted we fire off the 50% deposit invoice, but in most cases we receive payment as confirmation, so the invoice is more of a receipt which is send afterwards.
In a situation like the one you decribed, I would send an email explainnig that you have completed the work outlined in the initial project breif, and require payment for that. Any amemdments or changes to the breif will be considered a seperate project, and estimated accordingly. Follow up with a phone call.
Good luck.
Hi Tristan
Thank you for your advice and information. I have now reviewed my approach and refined my terms and conditions. Without this experience I probably would have left things as they were. So, it has been a great learning experience for me, albeit annoying and expensive in terms of loss.
Thank you for your time and sorry for the delay in replying.
Kind regards Jay
January 23, 2009 at 7:06 am #1002580Up::0Lisa Murray – Biz Coach, post: 1555 wrote:I agree with the others about issuing an invoice. If the client quibbles, explain that if the brief has changed substantially, then you will need to provide a new quote. In the meantime, you require payment for work already completed!!Generally it’s useful to have written into your quote the terms of business, including progress payments or what happens if the client does not respond within stated timeframes.
cheers
LisaHi Lisa
I thought I had already replied to you, so I am sorry for the delay. Thanks very much for your ideas and advice. I have now reviewed my entire invoicing process and feel as though it will avoid these issues in the future as a result.
Thanks again
Jay
January 23, 2009 at 7:11 am #1002581Up::0Tristan Boyd, post: 1758 wrote:We put out payment terms on the last page of our estimate, (50% deposit and 50% on completion), and the estimate includes the total figure, and the 50% figure that they need to pay to start the job. (inc. GST to avoid the 10% of clients who forget to pay GST)As soon as the estimate is accepted we fire off the 50% deposit invoice, but in most cases we receive payment as confirmation, so the invoice is more of a receipt which is send afterwards.
In a situation like the one you decribed, I would send an email explainnig that you have completed the work outlined in the initial project breif, and require payment for that. Any amemdments or changes to the breif will be considered a seperate project, and estimated accordingly. Follow up with a phone call.
Good luck.
Hi Tristan
I just posted you a reply but for some reason it hasn’t published?! Joy!
Anyway, thanks for your time and advice. I have learnt much through this process and from all of the information provided through FS including yourself. The client has turned feral and well, I am over it, I’d rather make more business instead of waiting on a loser. It has been a great lesson for me and one I won’t repeat because I have since refined my terms of engagement.Jay
January 27, 2009 at 2:30 am #1002582Up::0Just as a point of advice, sometimes these things are necessary in order to help us learn. Its hard when you are in the thick of a relationship-gone-sour to step back (I know this, believe me!), but it can actually be a good thing in the long run.
I have had a fair few projects that have taught me valuable lessons about how to do things better, or how to be clearer, and even how to draw a line in the sand and say “no, I am not accepting this”. I have had clients take advantage of my “soft” approach in the past and it has forced me to step back and learn from it as best I can.
My quote/brief/plan/contract document has progressed SO much over the years – and with every single project I look over it and evaluate it to see if I can improve… and I always do.
I have also learned that what is written down in a contract/spec and how you choose to enforce it are very different things. There is no point having a contract unless you are prepared to enforce the terms, and behave in a way that is consistent with it. I now no longer do ANY work in good faith. To me, the only good faith is payment
Anyway, best of luck, client relationships can be difficult… but it really is a matter of learning from our mistakes, or tweaking our processes to try and prevent it happening again.
January 29, 2009 at 11:06 pm #1002583Up::0Hi Jay,
As far as avoiding this problem in future, i agree with all those who have mentioned revising your trading terms.Just be aware that if they are on your invoice only, they may not be enforceable because they may not be disclosed at the time of entering into the agreement.
There should definitely be provisions to cover you in the event of the client changing their brief, and might i suggest something along the lines of a time limit after delivery for them to notify you of any defects.
If you would like a hand, please visit http://www.nbservices.com.au and send me your details via the contact us page.
I’m happy to have a chat about other options you could include as well.
Regards
Paul -
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