How to get money out of clients?

[turbo33]

I offer a 2.5% discount for payment within 14days. If you arange this with the customers accounts department direct rather than with the contracts manager (and email accounts an invoice) you will be amazed at how quick payment gets made.

 

By far the best option, do this myself. As said people are very quick to take up the chance of a discount and whilst we are all working on very tight margins its sometimes better to get less back into the kitty than than not getting more at all. Sound advice inho.

Edited May 24, 2010 by turbo33

[Mungler]

We work on money up front and bin clients that don't pay - it ends up in endless arguments e.g. you chase a bill to get paid but incur more time chasing to get paid or to get instructions. When the client eventually pays they then query why there is now more time accrued on the file and unpaid. My hourly rate is £250/hour plus VAT. If I have to spend 5 minutes chasing a client for instructions or fees, that's 5 minutes I could have spent on another client, doing work and earning money.

 

We try and explain to clients right at the start that if they pay up quickly and give us instructions quickly they will be helping us to help them save money.

 

I was taught a lesson a long time ago; I got a new client in through the door - it looked like being a good client and we all got on. I did a couple of days work without money up front and then tried to get paid. It turns out they were just not in the habit of paying anyone. So that was 2 days down the pan.

 

Anyhows, a colleague at the time commented that I would have been better served by taking 2 days off or a long weekend and spending it with the family or shooting. At least I would have got some benefit from those 2 days.

 

The problem is when you are new and keen you will take everything and anything that comes through the door; good, bad or indifferent. The filtering process comes when you get a stock of stable clients and money in the bank.

[agusta]

Frigging tell me about it, I've spent all day chasing late payments, one of which is (or now was ) a repeat client, I got tired of the late payments and numerous reminders.

 

Told them to pay up or find someone else by the end of the week, its now full out war between us

[Hunter_zero]

Opps, already suggested.

Edited May 24, 2010 by Hunter_zero

[Browning]

Maybe something along the lines of this on all of your invoices will focus their attention :-

 

NOTE: Invoices are due for payment upon presentation. In the event of any invoices remaining unpaid for over one month we reserve the right to

charge interest at a rate not exceeding the Bank of England base rate plus 8% in accordance with the Late Payment of Commercial Debts (Interest)

Act 1988 until invoice is paid. Any decision to charge interest will be notified to you in writing.

[whiskymac]

Jesus H Christ Mungler.......£250 an hour. What do you do.......male escort?

I need a career change.

[Diceman]

My financial director is fond of saying that customers who do not pay are not customers, they are thieves. If it is a case of won't rather than can't, I am in complete agreement.

One of my customers - a very lage food manufacturer - wrote to me a few years ago saying that as times were hard, they would be applying a 5% discount to all invoices fom the following month, and their credit terms would be increasing fom 30 to 60 days. I wrote back to say that times were indeed hard so we would be increasing our prices by 10% effective immediately. They were straight on the 'phone moaning that we had a contract and I was breaking the terms. They just didn't get it. Anyway, I sent them a copy of their own terms and conditions which stated that credit terms could change only by mutual agreement, and eventually they backed down. So it might be worth going though the small print of the paperwork usually attached to orders and if there is a similar clause, reminding them that they are breaking their own rules, and if they continue to do so you will consider all T&Cs null and void. Might work!

[Alanl50]

I have also found that making yourself a flask of coffee and going and sitting in their office until you get a cheque works. Go there about 4PM and park so noone can get out.

Nice one

[Mattw]

Jesus H Christ Mungler.......£250 an hour. What do you do.......male escort?

I need a career change.

 

No He's a rent Boy.... Still fancy the change of career?

 

Just kidding mungler. (I hope)

[JackReady]

Maybe something along the lines of this on all of your invoices will focus their attention :-

 

NOTE: Invoices are due for payment upon presentation. In the event of any invoices remaining unpaid for over one month we reserve the right to

charge interest at a rate not exceeding the Bank of England base rate plus 8% in accordance with the Late Payment of Commercial Debts (Interest)

Act 1988 until invoice is paid. Any decision to charge interest will be notified to you in writing.

 

You need to state the above in you T&C's. You might want to change the wording the new reg's are from 2002 which apply to all businesses small or large, and are supplimental to the 1988 act

 

See here http://www.berr.gov.uk/files/file37581.pdf

 

Best advice is to act immediately the debt is over due, phone with an accompanying email with an requested confirmation of receipt. You simple email them whilst your on the phone to them and ask if they have received the email. Ask for confirmed payment date and record them and send an email stating the confirmed payment dates, effectively you're creating a paper work trail that will assist you if you need to take them to court to get your money. If they fail to meet the confirmed payment date put the matter in the hands of the company solicitors. Better to spend a bit and get your money than to loose the lot.

[MC]

No He's a rent Boy.... Still fancy the change of career?

 

Just kidding mungler. (I hope)

 

 

He may well be a rent boy, BUT he prides himself on being the best rent boy in the business

[rodp]

Jesus H Christ Mungler.......£250 an hour. What do you do.......male escort?

I need a career change.

 

 

At a guess, and I don't know the bloke, lawyer / solicitor?

[starlight32]

In reality do you find there are many companies whose poor payment history is actually down to the girls in the accounts department spending too much time on their nails and talking about their weekend?

 

Most of time I find that when it becomes a problemn and you are speaking to directors, it is usually them who kick some backside and get things moving.

 

I find some blue chip companies can be really anal about getting payments out. Its not because they are not going to pay its just those that administer it are incompetant /lazy?

 

Agree???

[al4x]

A lot has to do with cashflow, overdrafts cost and a lot of companies hang onto payments for as long as possible. We tend to find with a lot of companies that the bigger the invoice the longer they take to pay. The noisier you are the better they pay just to get you off their backs.

[955i]

Maybe something along the lines of this on all of your invoices will focus their attention :-

 

NOTE: Invoices are due for payment upon presentation. In the event of any invoices remaining unpaid for over one month we reserve the right to

charge interest at a rate not exceeding the Bank of England base rate plus 8% in accordance with the Late Payment of Commercial Debts (Interest)

Act 1988 until invoice is paid. Any decision to charge interest will be notified to you in writing.

 

Thing is, this all sounds very good until you look at how it is worked out.

 

I think on a debt of £1000 which is 30 days overdue you can charge something daft like £3.96.

 

Hardly worth writing the extra invoice and certainly doesn't seem to be put in place to help businesses get paid.

 

Should be more like 10% of total per day to maximum of 10 days after which goes to collection agency, but doubt it is legal to put anything like that in your T&C's and try to claim it

 

EDIT: As a side note, I have just found that I have been charged £150 by my bank due to money not being there that should have been paid

 

Hardly worth me working as that is my profit gone already!!

Edited May 26, 2010 by 955i

[Nial]

Thing is, this all sounds very good until you look at how it is worked out.

I think on a debt of £1000 which is 30 days overdue you can charge something daft like £3.96.

Hardly worth writing the extra invoice and certainly doesn't seem to be put in place to help businesses get paid.

 

 

You're also allowed to charge your costs for recovering the debt, so add in an hour of your

time.

 

EDIT: As a side note, I have just found that I have been charged £150 by my bank due to money not being there that should have been paid

 

I wonder if this counts as a cost for recovery? My instinct says not but it might be worth

a chat with someone.

 

Nial

[al4x]

slightly overdue isn't really recovery though, sadly its business and cashflow is what kills most small businesses. You need to build up a certain buffer to cover yourself to allow for slow payments while on the other hand doing everything possible to keep the money coming in on time. As for charging late payments I've only ever had one sub contractor try it and even they said it wasn't worth it.

[Nial]

slightly overdue isn't really recovery though,

 

 

AFAIK if it's past the due date you are allowed to charge for recovery.

 

http://www.payontime.co.uk/legislation/legislation_main.html

 

First table...

 

Size of unpaid debt______Sum to be paid to the creditor

Up to £999.99____________£40.00

£1,000.00 to £9,999.99_____£70.00

£10,000.00 or more________£100.00

 

 

 

 

Nial.

Edited May 26, 2010 by Nial

[al4x]

bet you never hear from them again though

[Stretch]

I don't want to hassle them too much about it as then they could just take the work elsewhere, so how do people go about getting overdue payments without irritating the client?

 

Thing is mate, if you don't hassle them they take you for a **** i get our ladies to hound the debtors once they are over due. 7-10 days late and they go on stop with court action starting at the first sign of a non payer. They won't/should'nt get irritated by you calling them, they know they owe you money for a service you have provided them with.

 

Good luck

[Nial]

bet you never hear from them again though

 

As soon as they're overdue send a letter outlining what you're entitled to

charge but give them 7 days to settle the original invoice.

 

 

I've only had to threaten this once but it worked.

 

 

Nial.