Not getting paid

Getting paid

Not geting paid can be a big problem especially fro smaller businesses. Recently one of my clients closed business and even though the company was large, they have decided not to pay my invoice. It s a fairly lareg amount, almost £3,000. For a bog business it may be nothing but for my business it has cost me dearly. The company has gone into administration and apparently there is not much I can do.

Really sorry to hear about your payment problem web-design UK. You're right about the effect on small businesses. That's a big chunk for a small trader to lose.

It's scary to hear that if they've gone into administration that is effectively that for the freelancer.

Not getting paid - private clients

Sorry to hear about your problem, web-design-uk - that is a large amount of money to lose out on.

That's a very useful article, Sarah. Thanks. One thing I would like to add is that it seems to depend on whether your non-paying client is a company or an individual (assuming the co is still trading, of course), as it is very difficult to check the credentials of a private person.

I had an unfortunate experience with work for an author. I had done all the sensible things (contract with payment terms, including a late payment clause, checked that the address given was legit, sent a series of polite and increasingly firm reminders, all recorded delivery). And I had an email from him saying how delighted he was with what I had done. But it all came to nothing when it turned out he had given me a false name.

As it was quite a large sum for me at the time (but less than £1,000), I used a debt collection agency recommended to me by a networking colleague to pursue him through the courts. I paid to take it to the county court, and they ruled in my favour, and when he didn't pay up, I paid again (small sums each time, but it all adds up) to send the bailiffs in. They came back with 'not found at this address', and I never saw a penny.

I'm not recounting this to elicit sympathy - it was a few years ago and I used it as a learning experience - but to warn others that even a court ruling in your favour will not necessarily help.

What I learnt:

1. I decided to encourage up-front payment, by offering a discount. Ok I get less, but at least I get it.

2. For larger projects where it would be unreasonable to ask for the whole amount, I offer staged payments, usually 50% up front, with the balance on completion, but I can be more flexible if needed. Clients seem to like this, and if they have been happy to pay some amount up front, I feel more confident that they will pay up at the end.

The combination of these two methods has meant that the problem has not arisen again (yet...)

3. I'll use a different debt collection agency should the need arise again. They charged me nearly £200 to send letters and prepare court proceedings, on top of the court fees, so I ended up considerably out of pocket. I felt that they should have been able to check that he existed at that address before going to court, especially since after an initial phone call (mobile) he failed to respond to all our communications, so there was a suspicion in our minds, but they still recommended the court action.

I hope this helps someone avoid the same problem

Sarahsrays: Great article, we couldn't agree more 😉 The only other advice we would add is before anything else:

"Find out exactly who you are dealing with!"

This may seem obvious, but you would be surprised by the number of our clients from freelancer to multinational concern who simply do not take the time to establish the exact identity of their customers. Whilst this isn't much of a problem if your being paid, when your not it becomes a major issue.

How do you chase a company when your unsure exactly which one owes you the money? We would strongly encourage everyone to read our Free Guide To Credit Reporting this free & informative article is essential reading to anyone who deals with any form of credit control.

web-design-uk: Sorry to hear you got burned, unfortunately as your debtor is now in administration the chances of you recovering any monies at this point are slim to none. Out of interest how overdue was the invoice/s in question?

Susie B: Sage advice from what sounds like a hard lesson learnt. There are no shortage of unscrupulous collections agents operating & the current financial climate is only encouraging more rogues to enter the field. When vetting agencies we tell anyone & everyone the golden rule:

"Pay no money up front!"

We really, really can't stress this enough. No reputable agency will ask you to pay a retainer, joining fee or subscription.

Similarly we ask all our debtors to remit directly to the client & not to ourselves. As we have collected monies from a number of supposed "collections agents" over the years who were reluctant to return
collected funds to their rightful owners.

As for the small claims farce it sounds like Basil Fawlty would have done a better job :confused2
As you rightly stated, getting the judgement is only the first (& cheapest) part. But if your debtor has absconded or has little of value to levy on you may well be throwing good money after bad.

Your agents should have appraised you of all of the possible outcomes before issuing, or at the very least traced the individual in question before starting proceedings.

But don't take it to hard, it was as you say a valuable lesson & worth 10 times the £1000 to avoid the pitfalls in the future.

So to any & all freelancers, lurkers or associated business people on this board we would like to invite you to discuss your collection issues or problems with us. Either in this thread or contact us direct.

New Scam for 2012

Hi all freelance developers out there

I do apologise if this thread is no longer active or valid but I need to warn you guys of a new scam that has emerged but at my cost of finding out

I was contacted by someone based in London who wanted an URGENT piece of software development work done - really small job but can be done in a day. Because of the urgency of it there was no time for contracts so I took it and completed it and sent the invoice off

Then the following day got a reply saying that the entire project has been deleted mysteriously overnight so I can;t prove I have done the work hence no payment is to be made for my work. Then within 24 hours the deleted work mysteriously appeared and completed by someone else

What I believe is happening here is that this individual has been contacting other freelancers out there and doing the exact same thing to them until the work is complete without paying anyone.

His details are as follows:

Asif Alibhai <email removed by admin>

Please guys if you have been contacted by this individual do not take on any work from him at all.