I haven't had an opportunity to read the entire thread, so apologies if this has been mentioned already:
Get your customers to sign a development agreement *before initiating work* which includes your terms and conditions (that include policies for late payment, cost of debt collection, etc.). Otherwise, legally speaking, you're stuffed. We have made our Terms and Conditions available under a Creative Commons license as a starting point for those who don't have any yet: http://egressive.com/egressive-terms-and-conditions Cheers, Dave Dan Khan wrote: > Hi Harvey, > > Yeh, my advice echoes other members already. > > In the end I changed my payment terms (in proposal) to have three > stages, and the final stage (delivery) was after approval on a final > pre-live site hosted at my end, and was only made live after payment > was received in full. > > I also amended my payment terms to include some pretty harsh late > payment penalties - e.g. 10% compounding per month. The invoices > included the amount at the bottom, but also the extrapolated late > amount if they pay in 60 days and another row for 90 days. For small > amounts this can look quite a lot of extra cash. Each month I then > send a reminder with the updated late amount. It was amazing how many > late payment fees I did receive (1000s of dollars on top of invoices) > - at the end of the day some people do have difficulties paying and > making it crystal clear that they have a leeway in time, but will cost > them more, sometimes gives them more incentive to pay your bill first. > > Obviously this works if the client intends to pay, other than that my > legal advice was to issue a statutory demand for the fees (e.g. pay up > within 15 days or we legally liquidate your business) - a rather harsh > approach (and a cost of 250 bucks thanks very much). This one finally > ended up at the disputes tribunal which cost $100 to register the > dispute - they recommended I should have come this route first (yeh I > know, but the client owed me like 40K at the time so I was a bit > pissed). Still the client doesn't have to show up at the tribunal or > even acknowledge the court order, but your in a much better position > if you do this. In my experience you'll walk away from a tribunal > with a negotiated half of what you wanted or maybe more if you're > lucky and the other party puts up a real weak case. > > When I send out my final notices in the past I've included a snippet > of my terms that allows me to disable their website until they pay > without nageting their payment - my terms of business also make all > work my property until paid for in full, so there could be > justification for contacting the current web host if it's not you or > you don't have access to demand they take down pages that are your > property rather than beating up their google rating which could have > longer lasting effectd. Ultimately, these decisions always come down > to how frustrating this is for you, how much the invoice is, and how > much more time and money you want to lose messing around chasing it > up. > > Good luck. > > Cheers, > -Dan > > On Sun, Mar 1, 2009 at 9:40 AM, Phill Coxon <[email protected]> wrote: >> On Sat, 2009-02-28 at 11:56 -0800, Kent Parker wrote: >> >>> I don't like asking for money up front. I think that is all wrong. I >>> never pay my plumber up front or my phone bill, and, when I was >>> employed by other people I never got paid in advance. I do pay for my >>> groceries up front but I get it as a finished product. If someone >>> pays up front it destroys the motivation-to-get-the-job-done-and-get- >>> paid factor which is what drives me. >> For one of my consulting businesses I have two rates - the paid in >> advance rate and the pay on invoice rate. >> >> For clients who choose to pay in advance they get a 25% discount on the >> hourly rate. They also become one of my "VIP clients" which means their >> work gets priority and they get access to a few other things. In >> reality the "VIP" status is mostly just a label but I did it to give the >> client as much incentive as possible to choose the payment in advance >> option. >> >> If a client asks why I have two rates I explain that I've had too many >> situations where I did a lot of work for people and suddenly they >> decided they couldn't pay. So I've decided to focus on and reward those >> clients who pay in advance so that it is a win / win situation. >> >> Most business owners have had late paying clients so completely >> understand. >> >> As far as pricing I simply raised my prices until the "pay in advance" >> rate was the acutal rate I wanted and added 25% to get the "pay on >> invoice" rate. >> >> Even if clients pick the pay on invoice rate, the maximum exposure I'll >> allow is $1000 or 2 weeks work. At that time I'll invoice them until >> they build a strong payment history. At that point I'll consider >> extending the terms. >> >> I've only been doing this for 2 months but so far every new clients has >> taken the pay in advance option. I only have two remaining pay on >> invoice clients now. They both pay on time so I'm happy to leave them >> that way for the time being. >> >> Key things I've found to be important when getting paid in advance are: >> >> 1) Keep the paid in advance funds in a separate account - do NOT spend >> it until you've done the hours. This helps provide the motivation to get >> that work completed. It also means you can refund unused hours at any >> time. >> >> 2) Let clients decide how many hours they want to pay in advance - I >> have options for 2,5,10,20,40 hours. We use those hours up and then >> remind the client to pay more. If a client is hesitant I encourage them >> to choose a small number of hours up front at first so they can see how >> the process works. >> >> 3) Stay in regular communication with updates & progress reports. Keep >> a detailed breakdown of work completed that can be sent to the client >> periodically so that they can see how their money is being spent. Some >> clients will want this, some won't. >> >> 4)Always try to find ways to over-deliver. If a client feels you are >> giving more than you promised in little ways then that goes a long way >> towards smoothing over any other issues that might come up. >> >> This may not be an option for everyone, but it is certainly working for >> me. >> >> >> >> >> >> > > > -- Dave Lane = Egressive Ltd = [email protected] = m: +64 21 229 8147 p: +64 3 9633733 = Linux: it just tastes better = nosoftwarepatents http://egressive.com ==== we only use open standards: http://w3.org Effusion Group Founding Member =========== http://effusiongroup.com --~--~---------~--~----~------------~-------~--~----~ NZ PHP Users Group: http://groups.google.com/group/nzphpug To post, send email to [email protected] To unsubscribe, send email to [email protected] -~----------~----~----~----~------~----~------~--~---
