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Late payments - what do you do?
I started freelancing a few months ago. One of my first clients currently has an overdue payment and I'm not sure how to handle it. I'm sorry that this is a bit long-winded, but I want to give the background!
The client is a large company, which retained me to rewrite a number of pages on its website.
The work that it asked me to do has been sent to me in bits and pieces, which I've promptly completed and returned. Its slow action means that something that should have taken a few weeks has turned into several months.
The company signed a contract, which included a clause specifying my payment terms, including an overdue payment charge.
The contract included paying half of the agreed initial cost at the beginning of the project. I've also completed another small project for the firm outside of the initial brief, for which we agreed a price.
I've therefore invoiced the company for both items, of which both are now overdue.
I sent a polite email with my last piece of work, asking my contact to kindly check-up on the payment date for the first invoice as it was now overdue. She said she'd look into it. Nothing.
I sent another polite email last week (things happen, problems come up, maybe she was busy...), asking if she'd been able to find out because both invoices were now overdue. No response whatsoever now.
I'm going to call her today to ask, again, whether she's been able to find out. Any more emails and I'm afraid the tone might be misinterpreted.
My question (at last!) is, do I hit the firm with the late payment charge? I've only completed half the work (because that's all that's been sent to me) and I appreciate being given the work because I'm starting out. I don't want to get my contact 'off-side'.
However, I'm not a charity and I'm not doing this as a favour for them!
Help!
The client is a large company, which retained me to rewrite a number of pages on its website.
The work that it asked me to do has been sent to me in bits and pieces, which I've promptly completed and returned. Its slow action means that something that should have taken a few weeks has turned into several months.
The company signed a contract, which included a clause specifying my payment terms, including an overdue payment charge.
The contract included paying half of the agreed initial cost at the beginning of the project. I've also completed another small project for the firm outside of the initial brief, for which we agreed a price.
I've therefore invoiced the company for both items, of which both are now overdue.
I sent a polite email with my last piece of work, asking my contact to kindly check-up on the payment date for the first invoice as it was now overdue. She said she'd look into it. Nothing.
I sent another polite email last week (things happen, problems come up, maybe she was busy...), asking if she'd been able to find out because both invoices were now overdue. No response whatsoever now.
I'm going to call her today to ask, again, whether she's been able to find out. Any more emails and I'm afraid the tone might be misinterpreted.
My question (at last!) is, do I hit the firm with the late payment charge? I've only completed half the work (because that's all that's been sent to me) and I appreciate being given the work because I'm starting out. I don't want to get my contact 'off-side'.
However, I'm not a charity and I'm not doing this as a favour for them!
Help!
Concise Content -
- Contact in PM
philjohns
Messages count : 22Likes count : 0Registration : 5 December 2007Ok, first thing is - can you tell us who the company is?
In my opinion you have four options...
1. You send them a written letter stating that you are going to take them to the Small Claims Court unless they issue you with full payment within 7 days and say you will forget about the over-due payment charge if they do this.
2. You send them a written letter with a new invoice including the charge for the over-due payment and state that if they do not pay you within 7 days you will take them to the Small Claims Court
3. You send them a written letter and new invoice for the extra work you did for them and take the payment for this money and walk away from the job unless of course they pay up.
4. You walk away from the job now with the fact that you charged a deposit on the job for a reason...
If the company is large enough (or even if they are small) then a threat with the Small Claims Court should sort them out as it is very clear that they are in the wrong here and have no argument if they are taken to court.
Hope this helps you,
Let me know how you get on.
Phil- - - - - Contact in PM
JHarker
Messages count : 2Likes count : 0Registration : 1 February 2008Be patiant, bug them a bit and make sure you get the most money from them
Hi as a freelance bookkeeper I have also had this problem. I have done one off contracts and found it hard getting payments out of people.
You are defiantly doing the right thing e-mailing them and phoning them. You have the legal ground so they will pay because they have to.
I often find companies do this when they don't want the work doing any more. I'm only guessing here but your half-way through and they now do not want the project completing for whatever reason. If this is the case, and find out if it is, then chase the company for both late fee payments.
There is no need to be grateful to them it is simply a business relationship. They need the work doing and you can do it - end of. Don't get emotionally drawn just find out how you can get the most money out of them may sound harsh but thats what business is about!
If they are going to give you the rest of the work you may wish to wave the late charges but only if it speeds up their payment to you.
Basically are you going to get anymore work out of them. If you think you may not bill them for the full amount. If they turn into a bad debt (Usually if they don't pay after 2 - 3 months) then you can look at taking them to the small claims court but most business' will pay up before this stage as they have enough to do without the hassle.
Hope this helps - sorry for the complex answer!
If anyone needs a bookkeeper please e-mail JJH2008@mail.com or phone 07988 136 493 - Contact in PM
Miss Bee
Messages count : 14Likes count : 0Registration : 6 December 2007Thank you Phil and JHarker for your advice. I'm hoping it won't get to the small claims stage - we'll have to wait and see.
I won't name the company yet, because it may all still be resolved with a valid reason and an apology. I understand why you'd like to know though!
Unfortunately, the deposit is half of the agreed sum, which is one of the invoices I'm waiting for them to pay. It's a lesson learnt the hard way....
I called my contact yesterday, but reached voicemail. I've left a polite message asking her to email or call me.
If I don't hear anything within the next couple of days I'll email her and maybe copy her superior (who signed the contract). It feels sneaky but need to know it's not because my contact's inefficient!Concise Content - - Contact in PM
philjohns
Messages count : 22Likes count : 0Registration : 5 December 2007
No one wants anything to get to the small claims stage, but simply by threatening them with it (and knowing yourself that you wont actually take them there) can a lot of the time make them pay up as it is quite clear that it is them that are in the wrong.I'm hoping it won't get to the small claims stage
A deposit is meant to be paid before any work starts taking place - that way you have something to fall back on at least if the main sum is not provided.Unfortunately, the deposit is half of the agreed sum, which is one of the invoices I'm waiting for them to pay.
If they really don't want to pay for the work you have done then they won't reply to your emails but also, could quite easily not pick up your calls if the phone number of you comes up on their handset - have you another phone you could ring from, maybe use a friends just to get in touch with them?I called my contact yesterday, but reached voicemail.
This may seem like a stupid idea, but if they are not too far away from ou then you could just drop by their offices/store etc.
Phil- - - -