Clients Not Paying

[Noise]

Hi

 

We are having some major difficulties with some clients not paying so, what are other companies doing to avoid this ?

 

Possibly all images sent out should go with a prominent watermark - this will be removed when we receive payment in full but this might not sit well with some clients.

 

Chasing payment is mighty stressful and very time consuming and contracts are not the solution as they require alot of time, effort and money to follow up, what do you think ?

 

Regards

 

N

[martin walker]

a solicitors letter usually does the job, especially as you are entitled to a percentage interest rate after 30 days (or something like)

 

have a look on the web under DTI stuff

 

Ive only had to resort to it once, but it did the trick

[Noise]

Hi Martin

 

We are more of the opinion that payment should be made before the imagery can be used. The 30 day thing is rarely adhered to and to bring in solicitors is an added cost and hassel which could be avoided if the payment was made on receipt of the imagery.

 

But, will clients accept this strategy ?

[Brian Smith]

yeah that all sucks but it is a risk that is sometimes unavoidable. did you at least get a deposit? i recommend requiring 50% payment up front. if you feel that the client drags its feet during any part of the process, whether getting you the initial payment, giving you feedback, returning your calls, then you might want to put a watermark in the image to protect yourself. fortunately, years from now i think you'll find that 75% or more of your work is repeat business

[ihabkal]

yeah that all sucks but it is a risk that is sometimes unavoidable. did you at least get a deposit? i recommend requiring 50% payment up front. if you feel that the client drags its feet during any part of the process, whether getting you the initial payment, giving you feedback, returning your calls, then you might want to put a watermark in the image to protect yourself. fortunately, years from now i think you'll find that 75% or more of your work is repeat business

 

"repeat business" you mean by that same clients?

thanks

[Noise]

Good suggestions Brian. The main quandry is - how can the client see the images but not copy them ?

 

Possibly a client login on our website where the images are not downloadable but they could still take a screen shot ?????

 

Maybe some form of distortion of the image ?

[ZFact]

It really depends on what your competitors are doing. If they aint

charging 50% up front, and are crediting 30 days plus their work

is up to par then its going to be difficult. Alot of people want that

30 days credit as they pay all there bills at month end.

 

I think its madness all this credit giving... if i could rewrite the unwritten

rule book it would state.. man does job, man gets paid when job done.

 

To try and be more helpful but... perhaps a security locked pdf of the image

could be sent out, then send Cd when payment is recieved. Dont

know if that will help you much but. We are all caught between a rock

and a hard place!!

[Noise]

We are really talking about new clients here so, you are right - it would be easy for them to go elsewhere.

[Brian Smith]

It really depends on what your competitors are doing. If they aint

charging 50% up front, and are crediting 30 days plus their work

is up to par then its going to be difficult. Alot of people want that

30 days credit as they pay all there bills at month end.

 

I ALWAYS insist 50% up front to new clients...period. Even most of my repeat clients pay 50% up front because they expect it since it was done that way from the first job. I have a couple of clients that i start work for with a verbal OK, and they pay when it's convenient. As far as it depending on what my competitors are doing, i disagree. Everyone that does 3D is essentially my competitors and everyone in the business could be doing work without a deposit and i will still insist on one. I was burned once too many times when i first started out and it aint ever happening again.

[ZFact]

Valid point Brian;

Probably easier to do but once you have a really strong client base

and can afford to let a few jobs walk!!

 

That said, your better of not doing a job at all than doing a job for

nothing, but that goes without saying.

[Iain Denby]

You could try reminding the client that you own the copyright of the image, and until it's paid in full, they do not have permission to use it. Doing so will be in breach of this copyright....

 

They may think 'Shit, we've already used it! We'd better pay him'

 

Worth a try.

[4DM]

Don't know about Ireland - but in UK you can go to small claims court online to claim up to £5000. Apparently it's fairly cheap (£35-ish) and easy.

 

Aternatively, you could try a debt collection agency, and although you have to pay a percentage to them, you can also claim interest.

 

I go through phases - if I have had a bad experience, I am very strict with the next new client or two about terms. If things are turning over well enough, I get more relaxed about it - till the next time..

 

Sheer persistence usually pays off in the end, together with the expressed "regret" that you will have no choice but to instruct your solicitors...

 

Cheers,

 

D.

[Noise]

It is very important to arrive at a strategy that makes the process as simple as possible. In general, giving 30 days to pay or trying to rely on contracts or debt collectors is just asking for problems in my opinion. Pay on delivery is the best way as far as I can see - that way the work is paid for and there is no chance for the client to change their mind - for whatever reason.

 

Another thing we have encountered is that we will be appointed by an architect (for example) then when it comes time to send out the invoice, it goes to a 3rd party that we have not had any dealings with. They wait the 30 days then when we following it up - they start dragging their heels and redirecting us to different departments. All this can take months to resolve and it leaves our cash flow weakened and it also takes its toll on the stress and the time put into sorting it. The client cannot redirect, drag their heels or argue with a watermark especially if they have a deadline.

 

We have decided to implement the pay on delivery watermark method and see how it goes.

 

Thankyou all very much for your help.

 

N

[ChooChoo]

You have to decide for yourself if it is worth it to pursue. In business, there are always gonna be bad people. You eventually run into one (or in my case many).

 

Cheap to expensive

 

Write a letter of intent for a claim.

Small claims court

Debt Collector

Call Tony Soprano

Arbitration

Sue

 

 

If it's between 5k-10k in dollars, it is not worth pursuing if they are stubborn. Under 5k small claims court. Over...lawyer.

 

Sometimes you just have to call it a learning experience. If the client is insistent it wont pay, you've got a long way to go to get money. Even if you win in small claims court, if they don't pay after the verdict, then you still will have to hire a lawyer to get the money out of them. And if you win that, they can still stall payment. Depends on how evil they are. They can prolong it a loooong way.

 

Then what if they file bankruptcy along the way? You will have wasted your effort and money in collecting.

 

I have said f!%#? it myself a few times. Lesson learned.

 

Get a contract made up and constantly tweak it. Don't be anal about it. People sign contracts all the time. It protects both parties. If someone refuses to sign it, most of the time it's because they are dishonest and you don't want that business in the first place. It might be rough going initially, but the repeat or referral business from honest businesses will only help you in the long run..

 

Actually, if they use the pics or files, then you have a very good case against them if they have not paid. Keep sending invoices saying they are delinquent. I know if you sent in pdf's, at least you can give a time for file destruction. Don't know if there's something similar for jpeg's

[Noise]

I fully agree that some clients never intend to pay and it might be better to drop it and put it down to experience so, what I have learned is to get payment either upfront or on delivery.

 

You mentioned that even after the court favours you in a small claims court - the client may still persist in not paying. My conclusion here is that contracts are weak and the law even weaker.

 

The effort and time wasted in chasing up clients for money is the key element to avoid.

[Devin Johnston]

I've got to say that I haven't had any problems with client's paying; I make sure that I get a signed contract before any work is done and 10% up front. I've never had anyone who was unwilling to sign the contract and the longest I've had to wait for payment is about 30 days.

 

If this is happening to you and these people keep coming back wanting you to do more work I wouldn’t do a thing until they paid in full for all the previous work and then I'd insist on at least 50% up front. Who cares if they are insulted, if they don't like it they can go somewhere else and sucker that poor SOB. This kind of stuff really infuriates me, why is it that Architects and developers think that it’s ok if they take 6 months to pay someone for work that basically sells their projects.

[Noise]

I think you are right Devin.

 

I have had the quandry of installing the watermark but now I am fully sold on it however, the deposit is a different matter. Should we or not ?

 

Most people recommend atleast a 50% deposit especially for new clients but I am not sure about that, it could be too heavy handed and may not sit well with prospective clients. A 25% or 10% deposit sits better with me also including the watermark.

 

Now, I am talking about small projects, no more than 4 grand. Anything above this is a mandatory framework like 30%,40%,full.

 

I personally hate watermarks but, with regard to getting paid and avoiding lawyers (vultures) - they are a god send.

 

The other thing I would say is - I have no confidence in the LAW (in this country - Scotland) to resolve matters that pertaint to me getting paid for retrospective works. The fundamental is to get paid on delivery.

 

In responce to your infuriation - architectural projects take years - ours are weeks. Sometimes the release of money is based on these architectural timescales - why should we have to suffer that ? We correctly, should not. A watermark approaches the best way of us quickening immediacy for payment. Nothing more - nothing less.

[Noise]

Brian - it seems that expeirence is the key factor here and I am glad that I have asked this question - deposit and a watermark are the way forward.

[Brian Smith]

asking for a 50% deposit up front is completely professional and a norm in many businesses. it speaks to the commit of both sides. i just had the tiles in my house cut and polished and had to pay 50% up front to complete strangers.

[ChooChoo]

I'm not an architect, and maybe I'm wrong, but isn't there a limit on the retainer an architect charges, like 25% max? I would charge 10-25% retainer and get draws for completion percentage along the way if possible.

 

I honestly feel that contracts protect all parties. I wouldn't pull one out unless it's $50K US though.

 

The law usually will side with the defendant until proven otherwise. That's why it takes so long. It's BS.

 

Don't suppose this is a residence or piece of property somehow. You might be albe to place a lien for work on the property. Might be a long shot, but a homeowner or business that gets handed a lien will be pretty pissed at the guy who hasn't paid you. Banks don't like to see them either. I have success doing that once.

 

why is it that Architects and developers think that it’s ok if they take 6 months to pay someone for work that basically sells their projects.

 

absoltely agree.

[Charles Gaushell]

We ask for either 33 or 50% depending upon the size of the project and how well we know them. If they aren't willing to pay at least 33%, then they aren't worth the risk.

 

Suggest checking out the client as much as possible before you hand them a contract - and have a contract!

[alexg]

why is it that Architects and developers think that it’s ok if they take 6 months to pay someone for work that basically sells their projects.

 

because that is the time when Architects get paid from developers. Only then will they have money to pay you.

for developers, more time their money nested in the bank, more interest for them. delaying makes more money. easy to understand.

 

usually hassling the client over the phone is the best first step. just annoy them as they annoy you. unless the company is bankrupt they will pay once hassled enough.

[Devin Johnston]

because that is the time when Architects get paid from developers. Only then will they have money to pay you.

for developers, more time their money nested in the bank, more interest for them. delaying makes more money. easy to understand.

 

That's an excuse not a legitimate reason IMO; I get paid twice a month and if I don't have enough money to buy gas or groceries do you think the store is just going to give it to me if I promise to pay them. These Architects have lines of credit and if their cash flow is so low that they can't meet their obligations then I don't want to work with them. This is our fault for allowing this kind of situation to continue, for giving these guy's a product without getting paid in a reasonable amount of time. I feel absolutely no pity for them and I couldn’t care less if they are "insulted" when I ask for 50% up front.

[Charles Gaushell]

I have to chime in with Devin. You are just setting yourself up for problems if you don't make it clear on the front end and follow up.

 

One of the biggest problems is when you allow the client to see you as a vendor and not a professional. That is a big problem in the 3D world. People want to have a "cool laid back" job (not that it isn't, but showcasing it too an extreme can be a problem)- and then come across as less than professional. If your client sees you as too laid back they will treat you that way.

 

Enough professional secrets......LOL

 

I truly think everyone is doing our industry a disservice by not thinking about how you are perceived and then doing something about it.

[Brian Smith]

because that is the time when Architects get paid from developers. Only then will they have money to pay you.

for developers, more time their money nested in the bank, more interest for them. delaying makes more money. easy to understand.

 

I disagree with applying a generalization like this...yes obviously some architects work this way...but in my opinion this is a very poor and frankly stupid way to do business. i used to work with clients that thought this way but no longer. all of the architects i work with pay within 30 days of receiving my invoices whether they've been paid or not. likewise, when i use subs i pay them immediately regardless of whether or not i've been paid. of course, verbal arrangements to the contrary are sometimes ok but this should never be the norm.

 

i've worked with developers long enough to know that they must acquire immense financial backing before beginning their ventures, and the visualizations they request are a drop in the bucket...there is absolutely no reason why a developer can not pay the architect on time, and therefore, no reason that an architect should fail to pay on time. whether or not the architect has enough gumption and business savvy to collect on payments from there client is another story, but an architect should pay their bills on time period, regardless of whether or not they have been paid...any excuse for not being able to pay is nothing more than that - an excuse.