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Client very slow to pay - I need payment!

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#1 Beancat

Posted 10 March 2015 - 09:15 AM


This is an essay....sorry

I work for myself as a freelancer economist.  Sometimes I contract directly to government and other times I subcontract to other firms who contract to government if the job is large and I am  one specialist in a larger team.

I have a client atm who is firm I have subcontracted to for the past 6 months and they have progressively become slower and slower to pay.  I completed the work in January and invoiced and my terms are 14 days.

I contacted them 4 weeks ago to ask when they were going to pay and they said they would pay when the government client finalised the account (which was not part of my contract with them).  I thought ok, I'll put up with it for the sake of the relationship.

I know that they were paid last Monday (as I am also doing work directly for this government client on another project and they confirmed they were happy with this larger job I did through this other firm and had deposited the money on Monday).  

So the firm received the payment last Monday.  I emailed the firm on Thursday noting that I understood that the account between them and the government client had been settled and asked when are they likely to pay me........no response.

I am desperate for the money as I need part of it to settle my 2013/14 tax debt.  I had put money aside for this but because payment has taken so long I had to use some of it to live off.

How long should I wait to email them again and what do I say to let them know that this is not fair, without seeming too pushy?  I wont be doing work for them again so I don't care about the relationship, but I don't want to annoy them so much that they withhold payment on purpose just to be a pain in the backside.

Is a week since payment long enough for their account people to have paid me?  Or am I being unreasonable?

#2 Beancat

Posted 10 March 2015 - 09:17 AM

PS - I should have noted it is not a small amount of money either, if I dont receive it, it is going to have serious consequences for my cash flow this year

#3 Bob-the-skull

Posted 10 March 2015 - 09:20 AM

Some companies will have a set day each week/ftnight/mth that they settle their accounts.

I would contact them and advise that you are aware that the end client has settled this account and when they will be paying you as you are now outside your set terms of payment.

#4 Chief Pancake Make

Posted 10 March 2015 - 09:25 AM

A nicely worded letter mentioning you solicitor and legal action should do it.  If it doesn't actually get a your solicitor to send an official letter demanding payment.

#5 Tigster

Posted 10 March 2015 - 09:32 AM

Threaten to involve the use of a debt collection agency if payment is not received within 7days. This can be cheaper than involving a solicitor and also more effective as it can cause havoc with their financial institutions and any loans/agreements they may have.

Just because a company has set days to make payments doesn't mean they can't do it on any day they need to.

#6 Beancat

Posted 10 March 2015 - 09:38 AM

Ah ok, I didnt realise using a debt collection company had additional implications - this could be a good incentive

How does this sound for a plan of attack....I'll wait til Friday, (just to be nice) and then send an email requesting they advise when the account  will be settled as they are now outside of payment and this is the third time I have contacted them to request payment.  In the same email I will advise that if I have not heard from them in 5 business days I will have no other choice than to refer the matter on for debt collection.  Sound reasonable?

Anyone used a debt collection agency that they would like to refer?

#7 alikat2

Posted 10 March 2015 - 09:52 AM

Don't email - call. Email is too easy to disregard. Don't wait till Friday, because nothing happens over the week end. Call on Wednesday. Don't hang up till you get a commitment from the person that processes the payment.

#8 Beancat

Posted 10 March 2015 - 09:56 AM

ok, good idea alikat, that should I send an email confirming the conversation so I have a record of everything?

#9 bubbatime

Posted 10 March 2015 - 09:57 AM

That sounds perfectly reasonable and honestly if it was a company I was working for (as Accounts Receivable) I would have been calling weekly after the debt had gone out of payment terms (plus a week).

You are being too nice to them and they are taking you for a ride or I would start to think they are having cashflow troubles so the more you are in contact the more chance you have of being paid (squeaky hinge etc).

#10 MsBusy123

Posted 10 March 2015 - 09:59 AM

I have been in the same position a few times over the years.

Quite a lot of my work comes through graphic design agencies who get me to produce work for their clients.

A few times, these agencies have used the old, "We haven't been paid by our client yet. We will pay you when we get paid."

My response is normally that I don't have any arrangement with their client - they are the ones who engage my services, not their client, so they are the ones responsible for the account. Otherwise I would have invoiced their client directly, and would be chasing them for the payment.

I am happy to negotiate payment terms with them, but I just don't like them this as an excuse not to pay as I don't' have any influence over the arrangements they have with their clients.

If you are happy not to keep the relationship with them in the future (and to be honest, I'm usually happy to not deal with businesses with this attitude), then I would just keep ringing them and ask for an actual payment date.

I find ringing the accounts payable department the most effective because they will usually give you an honest response, rather than dealing with your contact.

#11 FeralZombieMum

Posted 10 March 2015 - 10:02 AM

Don't be nice.

You need to be firm and assertive.

Send them an overdue notice (with this in capital red letters) and how many days overdue.

Indicated that if payment is not received by x date (1 week from today) then it will be handed over to debt collectors for recovery.

#12 rainycat

Posted 10 March 2015 - 10:17 AM

I would call them too, it's a lot harder to ignore than an email.

#13 Fireside

Posted 10 March 2015 - 10:31 AM


Edited by Fireside, 11 March 2015 - 01:35 PM.

#14 Hands Up

Posted 10 March 2015 - 10:34 AM

^^^^ But that is still not the OP's problem.

OP I would call Accounts Payable, explaining that if payment has not been made within five working days, you will have no choice but to involve your debt collection agency.

Then get their email and follow up with the email (and the original invoice) immediately.

#15 Caribou

Posted 10 March 2015 - 10:36 AM

They honestly cannot say they won't pay until the other client pays. Sorry, but does that mean they don't pay their staff until the client pays up? no. They pay them. So you can determine from that, they have money stored somewhere, and certainly extra cash.

Call, email, and just be assertive.

#16 born.a.girl

Posted 10 March 2015 - 10:41 AM

Follow alikat's advice, and:

yes, do send an email, 'just confirming our conversation this morning ....'

then, on the day payment has been promised, call again to ensure it's going through.  You can also put this in the email: ' ... as I really need this money urgently, I'll call you again on the day to ensure it's going through ...'

Good luck.

p.s. I'm a small business owner, and also get the 'I haven't been paid for that myself yet ...'  Where on earth to people get this idea that it goes all the way back down the line before someone gets paid.  In my case that would be with the farmer milking the cow six months ago.  I did even have to explain that to someone recently, when she said 'oh, I haven't had a chance to invoice that out ...'.

#17 TaciturnTurtledove

Posted 10 March 2015 - 10:48 AM

I used to work in accounts receivable. This is the best technique I know for slow payers:

Call and speak to someone who will give you a firm date for payment. On that day they suggested, call straight back, extremely politely, stating that the money is not in your account. Get a new commitment of payment date and let them know you'll expect it and you'll call back if the money doesn't show up. Continue in this way, but always call promptly if a payment doesn't show up and speak extremely politely, but keep on and on and on at them, calling (politely) every single day if it gets to that point. Eventually they get so sick of answering the phone and making up an excuse every day that they just pay the bill so you'll leave them alone.

Or call the debt collectors after advising them politely of the date you will do this.

#18 CallMeFeral

Posted 10 March 2015 - 10:52 AM

I would definitely call. Email is easy to ignore. I work for a company with cashflow problems and the stories they tell people to avoid paying... I will never trust anybody again!. But if you speak to them and put your case forward they are much more likely to try and pay than by email. People are harder to say no to. People will be paid in order of how difficult they are to put off.
And unless they are an incredibly tiny company, it won't ruin the relationship anyway - they KNOW they are paying late, and accounts payable is usually a totally separate department than whoever engaged your services.
It probably also helps if there is an overdue penalty - not sure if you can add it to the bill at this stage, but it's probably worth writing into your contracts in future.

I'd call them today and try to extract a commitment to pay. Ask them to send you payment confirmation when they put the transfer through, so they don't just promise to pay and then let you wait a couple more days to see if it hits your bank account.

Then if there's still nothing in a couple of days, start with the legal/debt collector threats.

#19 Coffeegirl

Posted 10 March 2015 - 10:53 AM

We use the attached website to monitor our few credit accounts, but they also have some very good  collection letter templates.  https://creditorwatch.com.au/

Our method of attack on late payers is the following.

2 business days late - phone call and email reminder
5 business days late - phone call and email reminder and request for a payment schedule to be sent through
7 business days late - phone call, and email 7 day notice letter

If they don't pay then we refer them on to our debt collector.

Seriously - this is your livelyhood and you need the money to keep your business going.   Be firm, be forceful.

Edited by Coffeegirl, 10 March 2015 - 11:08 AM.

#20 FiveAus

Posted 10 March 2015 - 10:56 AM

Keep phoning, keep being polite, if they say they're still waiting on payment from their client, remind them your contract was with them, not their client.
Ring from random phone numbers if you can, this stops them from ignoring your call if it comes up on caller ID.

#21 Beancat

Posted 10 March 2015 - 02:44 PM

Thanks everyone.  ok I am on it.  Tomorrow I will call and request payment

Unfortunately it is a very very tiny company - the CFO controls the cash and makes the payments.  There is only about 20 staff in the office :(

#22 froglett

Posted 10 March 2015 - 02:53 PM

OP, I wouldn't wait... your terms are 14 days, and they haven't paid you in 4 weeks.

Jump straight on the phone, ask to speak to their accounts payables person, and ask directly when the invoice will be paid. If they try and fob you off, ask for a specific date, or be clear that within X days (I'd do the end of the week) you'll refer the account to the debt collectors.

Then, follow it up with an email (that way it's in writing that you have been chasing).

We get this all the time in our business, and I find a quick phone call much much more effective than an email that can be ignored.

Good luck - hope you get paid soon!

#23 ponky

Posted 10 March 2015 - 04:37 PM

I know how you feel, my DH is a painter and did some work for an Insurance company in Jan.  All completed and sent invoice asking for payment 14 days.

No payment received, checked with the company. Oh we have decided to pay you in March. Great but ok will wear it, the day comes and no payment.  Rang them and the excuse was we have reached our spend limit for this payment week.  We will include you next week.

We have outlayed money for materials and labour, so if we are not paid this week, I am going to look at debt collecters.  It is not a small amount of money to us.

#24 born.a.girl

Posted 10 March 2015 - 04:46 PM

 ponky, on 10 March 2015 - 04:37 PM, said:

I know how you feel, my DH is a painter and did some work for an Insurance company in Jan.  All completed and sent invoice asking for payment 14 days.

No payment received, checked with the company. Oh we have decided to pay you in March. Great but ok will wear it, the day comes and no payment.  Rang them and the excuse was we have reached our spend limit for this payment week.  We will include you next week.

We have outlayed money for materials and labour, so if we are not paid this week, I am going to look at debt collecters.  It is not a small amount of money to us.

What a load of twaddle.  I'll bet if the managing director came down to accounts payable and wanted a payment for something this week's spend limit wouldn't feature.

What's equally galling, is that an overdue account should be at the top of 'this week's spend', not so close to the bottom that it doesn't make the cut.

Damned cheek, when they're a large company, and you're a family business.

I had one of Australia's 'household name' wineries tell me they were 'just a small business, too ...' when I told them I wasn't happy with having to plead for every payment.  Er, no, I mean two people, not hundreds.

Good luck.

#25 SplashingRainbows

Posted 10 March 2015 - 05:09 PM

Keep on it, ring the CFO and explain they are well outside your terms.
Push for a payment date in full.
If they suggest a payment date of more than one week out say that's not acceptable I need at least half this week, the balance next week.
You may at least get half that way.
If they can't pay on those terms id probably say I have no choice but to forward to debt collection.

I've been burned before by a business that went into liquidation. I am very willing to do whatever possible to get payment from these businesses sooner rather than later, especially where there is no communication from the client.

For communicative clients who get on the front foot I'm more than happy to do payment plans. It's the ones who don't who worry me

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