Getting paid

Common Common :: Off-topic
1

Okay. Since you guys are the industry leaders, when it comes to this line of work, I’ll ask here. How do you get paid from slow-paying clients? How long do you wait before you start sending demand letters? On my invoice and estimate, I clearly state that the balance is due upon completion, but it has been over 30 days and they are not even returning emails.

  • lawyer
  • small claims
  • mafia hit :slight_smile:

What is my recourse? This was a larger job, and I have already seen my image on the news and in local papers, so they are using it.

2

I was never much of a leader but I have also never had a client not end up paying. The longest it took - 8 months. Its not easy. If you feel you are being run around you will need to start calling and follow up each call with an email. In my case the client claimed they only paid bills 4 times a year - but I got the run around from everyone. Just kept asking who I could talk to who could help me. Finally got the accountant and he claimed he had never seen the invoice - once I talked with him it took 2 days till the check was in my hands ;). You can also put a lien out. In my experience putting when your bill is due does nothing with these larger companies and they pay when they pay. I dont miss that.

3

[FONT=Times New Roman]I get the feeling they’ll pay, just when they feel like it, and that wasn’t the deal. Them not returning my emails is what steams me, and I am not much of a phone person, so I haven’t called yet. They better not make me have my wife call; they’ll wish they were never born :p[/FONT]

4

ehhhh…This is a fine line to walk. Like Sawyer, I had some invoices overdue by 8 month :slight_smile: this was during some difficult time for that particular client and eventually it was resolved. It really depends on a few factors:

- Has this client paid you before? Do you have a working relationship with them? If yes, then maybe its worth to just wait. If no, you may consult with legal council. I think Jujubee had a posting a while back describing some of his experiences with this kind of thing, you may want to ask him.

- Do you want to maintain the relationship with this client? If yes, again it may be worth to wait. By waiting I mean still harassing them with emails every week and possibly phone calls but taking it no further then that.

- How did you put your self in this position? Did you ask for 50% up front? Did you deliver all materials on time without any renumeration? Typically what you want to do is to protect your self as much as possible. There is nothing wrong with stating to the clients, especially new clients, that you put your own interested ahead and your own protection is of most importance. For this reason they must pay % upfront to establish a binding agreement. If you just do the work without any pay, you can consequently shoot your self in the foot.

- if the client refuses to pay upfront, chances are they wont pay you at all. If they say they don’t have any money right now, and when the project is over they will get the payment its a load of BS. They them selves have to some how survive and pay their own bills and they are always paid a % upfront.

- You may also explore some tactics like, stating that you had to take out credit lines to cover the time you spent on their work with this money and now the interest is accumulating and you are losing money and put some pressure on them this way.

Good luck. This is probably one of the worst parts of this business. Or any other business for that matter.

5

This is a new client, and they paid the 50% deposit, on-line, and up front. I worked on two projects simultaneously, and both projects owe me the final payment. Again, the lack of mailing me back, is the frustrating part. I don’t desire to work for them again, but I don’t want to burn any bridges. Both projects had different architects, but both projects compromised the render by making poor composition decisions, in my opinion. The architects were extremely technical, and I don’t like doing technical work. I worked hard to get the correct view, and lighting, and they went and had me do things that newbies do (SE ISO’s with the sun behind the camera). Although they owe me several thousand dollars I can still feed my family if I don’t get paid, but if I were a freelance guy I might starve for a month. My goal is to freelance full time, so I would like to learn the business side of the trade now.

6

Well I think the answer is to get on the phone and start working up your phone skills. It sucks. No fun but you have to learn to be aggressive enough at the right time if you want to run your own shop. Most people will pay - they will want to pay its usually more about getting your invoice to the right person. The sooner you get on that phone though the sooner you will be paid. Just remember that everyone has done this and I have found most people when you talk to them they want you to be paid. But thats just my experience.

7

I’m also no leader but I got a feeling there’s not much you can really do in this situation. At the end they will pay when they want to :). I got one client that I’m still waiting for payment for 2 years now :slight_smile: so nothing can surprise me anymore.
I just don’t get people, and their lack of HONOR and RESPECT ! They want everything quickly and beautifully but when it comes to showing that they respect your work and pay … well maybe I was just raised differently and this is how it is supposed to be :slight_smile:

8

They are blowing you off because they know they can. The longer you wait the less your chances are of being paid. The only real recourse you have is small claims. Chances are they have done this before and have already anticipated what you will do, so there’s not much point in delaying your actions.

You must call them. Ask to speak to accounts payable. If you can talk to AP they may put the pressure on the person who owes and facilitate payment. They usually don’t like their co-workers screwing around with things that could affect their payment reputation. You must get a date when payment will be made. Considering it is already way past due I would tell them payment must be made within 5 days. After that time send a registered letter stating that you are sending this to a collection agency. Copy the AP contact. If they do not respond immediately take them to small claims court.

Taking these kinds of actions is acting in a professional manner and is good business practice. As a business person you must have a strong policy and stick to it. Being nice will not help. They obviously don’t respect you. Unfortunately there are people out there looking to take advantage of nice people that are eager to please.

If it’s a new client my policy is that the balance due must be paid before delivery of completed materials. Otherwise you have no leverage other than their good will. All drafts are low res and have a water mark. This is the only way to prevent getting screwed. It’s amazing how fast they’ll pay if they have a deadline hanging in the balance. Once they have the final product you’re off the radar and relegated to the status of a pest.

If it is a repeat customer I lighten up a little bit.This can be risky as well but it filters out the people that are planing to screw you from the start. Set a limit of credit and do not go above it. This is what other businesses do after assessing a customers credit history. This will help reduce risk in the future.

9

Watch this. Time to get a lawyer on your side. Good luck with everything, I hope you get your $ soon! :smiley:

10

Enjoyed the video, thank you.

11

I felt it has some good points. Even though no one wants to spend the money on a lawyer, once getting into a bad situation with a client, it becomes evident that it’s a smart thing to do. Have a good contract, and some legal backup. So many creative people are getting taken advantage of and it’s a shame. :-/

12

It’s simple. No pay=no final output. Follow that rule and you won’t get screwed.

13

that is going to my MO from now on!

14

Bobby, It looks like they already burn one side of the bridge… collect the ads to have a proof that they are using your images as well as emails…if they don’t pay or contact you in another month I would send a letter coming from your attorney saying if they don’t pay in 30 days you will file a claim to collect the money.
if they are in town I would go to their office…I would contact the architects as well to see if they are getting paid too… if you file the claim hire the marshall services to deliver the notification.

15

I was hired by the architect. I will wait 30 days and if I don’t see payment I’ll pursue legal action.

16

But dont “wait”. Call call and call. Talk to your contact at the office, have them transfer you to accounts payable, talk to everyone you can. Tell them you havent been paid and you need expect to be. I really dont think anyone will choose not to pay. You may be a low fish on plate so make sure everyone there knows your name and that you plan to call everyday until you have your account settled. If you make a lot of noise I think they will choose to pay. And make sure you talk to them and make it clear you wouldnt want this to happen again so what can you do to make sure you are always paid promptly… However you word it. Just make sure you are as active as you can be. More often than not when I wasnt paid on time it was a really dumb mix up with AP or billing or something lame. I think there were times if I had called sooner it would have been taken care of sooner.

17

Hi Bobby, we tend to put watermarks all over the image for the new clients. Those get removed once the payment is down. Anyway, aggression wont solve anything in these cases. The best approach is two polite email month apart, third email sent with a polite threat of a lawsuit… This i recommend with new clients. As far as the othe ones, repetitive ones, its usually better to wait because they will pay 90% of the time… It sucks i know but pls know that this type of shit happens everywhere!!! :wink:

18

I agree, in my opinion sometimes just a simple email from a lawyer instead of you will begin to get attention at least in my exp. it has.

- from my exp. like the video says any of your work that is used and final payment has not been completed you can “sue the hell out of them” =P

19

I agree. Waiting will only show you are not serious and put you lower on the priority list. You have already waited a month.

You must stick to your agreement what ever that was. When was final payment due?

If they have have exceeded the time specified in the agreement they must provide a very good explanation (this doesn’t include not returning your emails). It is up to you to accept it or not. If they are later than specified in your agreement, they are delinquent. Try that with your creditors and see what happens. You are not a bank. If the arrangement included an extension of credit then that is a different matter.

My brother in law is a CFO at a small company in Denver. He told me that there are many companies that do this as standard practice. He found out the hard way. They use this as a way of making money by getting free credit. Small vendors are victimized and the big ones with power eventually get paid. They manage to stay in business by moving from one vendor to another. In business credit is a big deal and all legitimate suppliers charge interest when they offer it.

I’ve been screwed out of thousands of dollars and have learned the hard way. Don’t let this happen to you!

20

I had to take two clients to court and won both times. I’ve been screwed and have had to wait plenty of times. There’s a few things I’ve learned from all of my experiences:

1) Contracts. Be explicit in your terms. Not only does it make you look more professional, but can save your butt as it has mine on several occasions. Word-of-mouth is also just as valid in the court of law in the US, but harder to prove.
2) Save your emails.
3) Request a percentage up-front on larger amounts, but final payment always on completion.
4) Watermarks. Be upfront and tell them that all your images are watermarked until payment is received. The only time I make an exception is if it’s an absolute emergency for a client at a large firm (which I can probably trust to pay) or a repeat client. Almost every new client gets the watermark treatment.
5) Don’t make changes for free unless they’re really minor, and even then inform them of your change policy/charges. I had to do this twice this week alone. I explain to them that some of these changes might take a whole day, and my employees/contractors need to be compensated. Last but not least, it also takes away from other paying clients.
6) Take screenshots of your images being used. I had one guy refuse to pay me because of quality, but then my image appeared on his website the following days. I took a screengrab then used this in court against. It actually constitutes two separate issues:

a) Failure to pay - he had to pay what he owed (owes you for your work and legal fees.)
b) Copyright theft - used your image without permission (you might be able to assess separate damages for theft.)

If a client doesn’t pay:

1) Usually try to get a hold of them via email.
2) If that doesn’t work, you have to call. You might even need to block caller ID.
3) Ask for the person in charge of the project.
4) If that doesn’t work, at larger companies ask for Accounts Payable. I had to do this on several occasions. The AP department may have a 30-day policy like most companies, but I inform them of our agreement.
5) Email Accounts Payable.
6) Send over a notice after 30 days. I have one that reads in BIG BOLD LETTERS: 30-DAY OVERDUE NOTICE.
7) If that fails to satisfy, I’d consider a few options:

a) Is this a client you want to do business with in the future?
b) Will this client give business in the future?
c) Are they simply running into problems and have a valid excuse? I had one repeat client that disappeared for a while. Come to find out, his town had a major flood and they lost their building. I would say that’s a valid excuse, so I don’t always jump to conclusion. Recently, I had a client who’s grandmother died and he was gone for two weeks.

If I’m prepared to lose the client, then if necessary I will inform them of potential legal measures.
1) I would do that via email, and tell them that “I am prepared to go to court if I do not receive a prompt response.” Briefly outline your terms again. Also follow that with information as to how going to court will affect their credit score, they will be reported to the Attorney General, BBB ranking, and may even result in a lien on their property or jail time. You can also go one step further and say that you’re pursuing them for theft.
2) If they start fighting with you, give them an ultimatum.
3) If that doesn’t work, go down to the court and file the paperwork.
4) Send them copies of the filed paperwork or mention what you have done. Give them one last chance to resolve these issues.
5) If that doesn’t work, go to court and watch them not show up. The case in most states will default to you.