In my former job as project manager, it was part of my job to submit invoices and chase after people for money. The final invoice is a b1tch, no question. In my experience, something like 95% of clients procrastinate in paying it.
Working for myself now, I invoiced these clients on a weekly basis, and they paid the first two the next day. I didn’t expect the last one to go so smoothly, though, because they never do. No issues with my work or anything, and the invoice shouldn’t have had any surprises, but people put off paying when the job is done.
Tuesday: no one home. Drop off invoice in mailbox
Wednesday: waiting for a call
Thursday: leave phone message
Friday: wait for message to be returned
Saturday: stop by in person. “Did you get my invoice?” He’ll pay me ‘soon.’
These are great people, great clients. I trust them and I’m not worried. I’m not even that impatient. But I’m not a lending institution. The job was T&M, so I’m already effectively extending them credit while I’m working. Once the invoice is submitted, I consider it due at the earliest possible convenience.
But really, we all want referrals from clients, and I don’t want to cross the line anywhere. And in my experience, clients will pay, eventually. One of our clients paid her last 10% six months after the fact, no excuses or anything. Just hadn’t got around to it.
Edited 12/22/2007 12:01 pm ET by Biff_Loman
Replies
Even on T&M I give folks 10 days to pay before I start making noise. I have it written that payment is expected in 10 days. in an agreement for the T&M work to be done.
So far ( knocking on wood) my 3 current jobs are quick payers, often cut a check upon reciept of invoice. But I've had my share of 90 day waits as well.
Spheramid Enterprises Architectural Woodworks
"Sucess is not spontaneous combustion, you have to set yourself on Fire"
You might put a item in your contract with a penalty or interest after a period of time.
But here is a suggest that I have heard from several people that have rentals.
They have said that it "hard" to get people to pay late fees. So when they change over tenets they have a new contract.
Instead of something like $750 due on the 1st, with a $30 penalty after the 10th, they changed it to;
$800 due on the first, with a $30 discount if paid early.
So now he is not only getting $20 more in rent, but also he has the people lining up on his doorstep to pay early.
With T&M it is a little harder. But you still much have some expected range.
So if you think that the job is going to $2000 to $3000 then adjust your hourly rate for an extra $250.
Then if they pay each weeking payment within 7 days and the final within $10 they get a $250 discount.
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
I am fanatical about collection. I rarely have money owed and if I do it is someone we have worked with before. In your contract you should have "balance due upon completion" statement. And when the job is over stop in to get paid. T&M or quoted price should say the same. I always point this out at signing.
On our jobs we get 10% non refundable to hold a spot on the schedule. 50% of the balance is due the morning work begins. The balance upon completion. If it is a particularly long job (for us that means 3 weeks or more) we break it into 3 payments or weekly. But the end is the same. Balance due upon completion. DanT
Recently my wife left a phone message for a client stating that " this is the bookkeeper for ####, LC and we would gladly have someone come over and "remove" the installed railing if you aren't going to pay." It was maybe 3 or 4 weeks after work was completed. Client knew I was a one man show, so the someone coming over would be me. She called me up and got nasty, saying it was rude... I said, "Oh, I'll tell my wife you decided to pay after all, she'll be delighted". which only infuriated her more.
Only a few hundred bucks, probably will cost me way more in lost referrals, lady got my name from a Realtor who threw a little work my way but probably won't any more. I wish my wife would stay the hell out of my business, but she can't.
I'll add this to some good suggestions you have allready received here.
The final invoice is a b1tch, no question. In my experience, something like 95% of clients procrastinate in paying it.
I didn't expect the last one to go so smoothly, though, because they never do. No issues with my work or anything, and the invoice shouldn't have had any surprises, but people put off paying when the job is done.
And in my experience, clients will pay, eventually.
First; stop convincing yourself on the above three statements. You are setting yourself up to expect the worse and when you do that..............
Once the invoice is submitted, I consider it due at the earliest possible convenience.
Ok, now that is more like it, we're getting somewhere now! If on Tuesday afternoon, you expect to finish on Wednesday at some point, why not bring the invoice with you and leave it there with a very positive polite hand written note explaining how you will be expecting to pick up a check on Wednesday when you will be completeing the work as promised.
A polite phone call Tuesday evening just to "check" to make sure that the invoice and note were received...............that shouldn't leave a lot of room for folks to squeak out. If the check isn't there on Wed, a phone call immediately is in order to their daytime contact number. If no luck there, I would wait for them to pull in the driveway on their way home from work.
This is bussiness. Unless other arrangements have been made ahead of time, thaey need to know that you need to get paid in order to fulfill your financial obligations just like they do. You need to be VERY firm about this going in. Firm, but polite. In the end, I believe that you will garner their respect because of it.
Eric
[email protected]
In my experience, the smaller the remaining deposit, the harder it is to get it. We even sometimes call it a "holdback" leading some folks to think that they can hold that back even for incomplete work thats not part of our agreement.
I do kitchen sales and installation, and my terms are 50% on ordering, 50% on delivery. My delivery guys won't take the kitchen off the truck without seeing or verifying payment. Terms are explained verbally and in writing at initial quote. It's working great.
I never used to have the nerve to ask for anything but 50-40-10. That is until I (briefly) did kitchen sales for a big box store and I got used to explaining that terms were 100% upfront. Seeing people write out a cheque for 35K for something they wouldn't see for 6-8 weeks was mindblowing. Most folks didn't even blink. If clients don't blink when asked for that, I figure they should jump at my terms. And they are.
I got a check returned this week. Account closed. Dropped by the house on Thursday afternoon. Left a copy in the door.
As I'm ready to go up again (on Saturday before Christmas) I decide to check the mail.
Whoopee! Check. And a note.
I really didn't want to be Scrooge today. I could have put it off till Christmas Eve.
I hate collecting money.... i hate end'n up be'n the a-hole after the fact... no different than you lending them money... at which point you are a great guy... to asking for your money back... at which point you are an a-hole...
don't get me wrong... i have owed alot of money at times i couldn't pay... but i never ducked anyone and i called them before they had to call me and gave them a heads up...
I have people that rent from me that a late charge is just a cost of doing business... it's all the time... and an extra $50 every month is $600 a year to me... so... not sure i should complain...
what i do now is... it's $750mo with your discount... i write the lease up for 800mo and they get to "deduct" $50 for paying before the first... "early payment discount" but it's late after the 5th... at which point there is a late fee... $75... so it cost them $125 more to pay on the 6th... which gets their attention... it also lets me list rent as $800mo on my rent rolls... which looks good on paper and to the banks...
p