customer not willing to pay

[martom]

Hi everybody, I need some advice. I've done some rewiring work to a cafeteria, where I finished 10 days ago. After completion I send them an invoice - no reply. So after a week I send them few messages and an email asking about a date when they will pay. No replay. I send them another email asking for immediate payment. Received an answer that it's not professional to chase for a payment so quick, they need some reasonable time and that I'm a bully and they will report this to the police and trading standard agency so what should be my next step? A signed for letter asking to immediate payment?? Any advice welcome. Thanks. Tom

 

[High Tower]

What are your payment terms and were these communicated to the client?

 

[Darkwood]

When you take on a job its polite to verbally express your terms of payment and when your invoice is sent it good to have it printed at the bottom, mine give 28days from date of invoice.... i have regular customers who pay me on 12weeks terms and you will find this more so with bigger companies who settle on 8 and 12 weeks, yes your methods are a tad strong, i would go and see them and offer an apology and express your new to running a company and have taken their comments on board then politely ask what would be a reasonable payment term? .... this way you ease any pressure and if lucky retain the customer for future work.... word of mouth can make or break a business and giving time to pay isn't an unreasonable request and as i said the norm is 28days.

I suggest if waiting for payment may cause you cash flow issues then i would suggest you discuss before hand with the customer that due to been new to self employment and building up the business you would appreciate early settlement of the bill... you should find most will be happy to those that dont then you need to see if the job can be one without putting you in cashflow issues..... another trick is give a 5% discount if early payment is met but obviously price that in without losing to the competition ...at the wiff of paying less many will give instant payment.

Remember you provide a service and usually after 3-4 weeks time has passed to assess whether your work is good or any issues arise like faulty fittings etc..

 

[Farmelectrics]

face to face is best dont work for them in future

 

[SJD]

I'd agree with darkwood, I usually allow 28 days. My domestic customers usually pay much sooner, but I think business customers are used to having much longer to pay, and unless you had alreday agreed something different, are probably surprised to be chased before 28 days are up.

 

[wade88]

Unless terms of payment were agreed, or laid out in writing via contract or on your invoices, technically the customer is at their own liberty to pay when it suits them.

Ensure you have clear and concise terms of payment, or you WILL get taken for a ride. Guaranteed

 

[Octopus]

Commercial clients pay between 30 and 60 days - you need to factor this into your cashflow.

Yes your quote may have said immediate payment but my guess is that they ignored it.

 

[kingeri]

100% agree with darkwood. If I haven't received payment, I don't hassle a customer. I give it a couple of weeks, then ring them and check that everything is ok with the install. After a month, I send my standard email or letter just giving a gentle nudge. I have honestly never had a customer not pay, but I do generally do domestic and most of that is word of mouth. I also make myself so well liked by the customer that they couldn't possibly mess me about!

 

[glasgospark]

face to face is best dont work for them in future

worst advice ever

there obviously not trying to burn you , they had some extensive work done and didnt think you would be chasing for money within 7 days , there correct by saying not very professional to be chasing money after 7 days , if you wanted paid fast you should have requested cash/cheque on completion and let them know this at start of job , by the sounds of it if you did you probably wouldnt have got the job , wait it out get your money and be amicable because its only you to blame for the late payment as you didnt state payment terms , they legally have 90days

 

[martom]

thanks everybody, Ill write them a apology. I didn't realised that in commercial environment there is such a long term. So Ill do it straight.
I'm not for a long time self employed and used to this that my domestic customers paid me straight. Actually I leave with them 10% for 14 days after completion - but actually they never kept those 10% so my habits are inappropriate
Thanks for advice
Tom

 

[Darkwood]

worst advice ever

there obviously not trying to burn you , they had some extensive work done and didnt think you would be chasing for money within 7 days , there correct by saying not very professional to be chasing money after 7 days , if you wanted paid fast you should have requested cash/cheque on completion and let them know this at start of job , by the sounds of it if you did you probably wouldnt have got the job , wait it out get your money and be amicable because its only you to blame for the late payment as you didnt state payment terms , they legally have 90days

As the OP is a sparks entering new to commercial a face to face with customer discussing an early payment give a x% discount is a subtle way to help win a customer as well as hopefully get early payment, although asking dirent for insant payment i will agree will lose custom, its all about customer relations and if your good at it you can get blood out of a stone when your bad at it then your business suffers.... when established in commercial or industrial then its good not to do the verbal but say have a 30days term on invoice then follow with polite letter 14days after but i would ring first and enquire about their own payment terms so you can update your customer accounts with the info.... this is also a good way to know at the beginning of a job is to politely ask their terms rather than give them yours so you can enter the details into your SAGE accounting software.....

 

[glasgospark]

As the OP is a sparks entering new to commercial a face to face with customer discussing an early payment give a x% discount is a subtle way to help win a customer as well as hopefully get early payment, although asking dirent for insant payment i will agree will lose custom, its all about customer relations and if your good at it you can get blood out of a stone when your bad at it then your business suffers.... when established in commercial or industrial then its good not to do the verbal but say have a 30days term on invoice then follow with polite letter 14days after but i would ring first and enquire about their own payment terms so you can update your customer accounts with the info.... this is also a good way to know at the beginning of a job is to politely ask their terms rather than give them yours so you can enter the details into your SAGE accounting software.....

i was reffering to the (dont do business with them again part)

 

[UNG]

I wonder what payment terms they have on their food I bet you can't get 30 days to pay for that when you order it

 

[Hiddo]

In future make it clear what you expect. I do it with all my commercial clients and some of the bigger landlords. Just explain that you want payment within x days and see what they say. If they can't commit it's up to you to decide if your cash flow will stand the wait. If not dont take the job on.

 

[martom]

Thanks a again for explaining to commercial environment hope I didn't mess up to much my relationship with them .... At least they are really happy with the work....

 

[glasgospark]

Thanks a again for explaining to commercial environment hope I didn't mess up to much my relationship with them .... At least they are really happy with the work....

y did they call you a bully , did you leave out some info

baseball bat,padsaw,claw hammer ??

 

[Geordie Spark]

thanks everybody, Ill write them a apology. I didn't realised that in commercial environment there is such a long term. So Ill do it straight.
I'm not for a long time self employed and used to this that my domestic customers paid me straight. Actually I leave with them 10% for 14 days after completion - but actually they never kept those 10% so my habits are inappropriate
Thanks for advice
Tom

There is no requirement - legal or otherwise - to allow any credit terms to anybody - there never has been and never will be.

To allow somebody time to pay is just a courtesy that you may feel like granting them or not at your discretion. So, if you made it clear at the very outset that you wanted paying on completion of the job that's the deal your customer agreed to.

Always remember: a Verbal Contract - like a telephone conversation - isn't worth the paper it's written on. Get it all in writing BEFORE the job starts !!!

 

[martom]

Ive made it clear that I wish to be paid by completion - but verbal unfortunate only. I've deleted the payment formula from my offer.
How many of you does prepare contracts for each "bigger" job?

 

[Octopus]

To be honest matey you can have all the clauses in the world BUT some companies will pay when THEY want.

You need to factor in 30-60 days payment into your business.

On bigger jobs it makes perfect sense to stipulate payment after first fix and payment after 2nd fix/completion and certificates provided after payment received.

 

[martom]

Yeah, that's true. But at least if you have the clauses - it makes you feel better

 

[Geordie Spark]

To be honest matey you can have all the clauses in the world BUT some companies will pay when THEY want.

You need to factor in 30-60 days payment into your business.

On bigger jobs it makes perfect sense to stipulate payment after first fix and payment after 2nd fix/completion and certificates provided after payment received.

Tell me about it.

My customers included the Ministry of Defence, BT, an Opera Company, several bands, groups and musicians - some well known & others not so well known - most of the independent TV companies and a local independent radio station as well as the BBC, but I was often able to negotiate terms that were a bit closer to mine.

Those who reneged on the agreement had to find themselves a new supplier.

I agree completely with your comment: "On bigger jobs it makes perfect sense to stipulate payment after first fix and payment after 2nd fix/completion and certificates provided after payment received." My business at the time was nothing to do with sparking - it was manufacturing - but I employed the same tactics on big jobs. Money when the materials arrived and more as the job progressed followed my the final payment on completion and delivery.

Everything is negotiable and in 12 years the total amount I lost to bad debts was just under £1,500. Not too bad I reckon.

 

[martom]

Could you tell me then how much in percents do you let them pay:
Initially deposit
After first fix
After second fix / before you hand over certificates ?
I was thinking:
30% initially deposit
30% after first fix
40% after completion ? Does it sounds right?

 

[LlandrilloSpark]

My terms are printed on my invoice , but IMO you are entitled to your money on completion of the work, when you buy a steak in tesco you pay straight away, why do these people think it should be any different, it's a good idea to agree terms before, the Police would not be interested and your doing nothing wrong, it's your money that you are owed

 

[gazpeace]

It's not right though why should some customers have 28 days to pay, but when you take your car to a garage to have some work done on it they expect you to pay as soon as the work has been done.

 

[Octopus]

My terms are printed on my invoice , but IMO you are entitled to your money on completion of the work, when you buy a steak in tesco you pay straight away, why do these people think it should be any different, it's a good idea to agree terms before, the Police would not be interested and your doing nothing wrong, it's your money that you are owed

We should start a thread to name and shame companies who are poor payers, and I suspect there will be hundreds of well known names on the list.

Big companies, could and should pay on 30 days, then that would help the entire country.

 

[monkeyelectric]

I expect payment as soon as i've completed the work and i make this clear from the off unless otherwise agreed before work commences, if they don't agree then i just walk but then i am a stubborn sod sometimes and i've not lost work because of it, yet!

 

[LlandrilloSpark]

I've said before on these matters, forget the law, forget the small claims and go direct to a collection agency, this is an entirely legal way to do things and it works, these companies don't let go and look on it as its their money they are being cheated out of, when two 6' 4" Heavies turn up telling the cafe owner it's pay up or lose your latte making Machine...they pay

 

[richy3333]

I guess the OP has posted to other threads for people to comment that he is new to being self employed etc?

For me, when pricing a job I'm always assessing if I think the customer will pay or not. Don't be shy about talking about money, you're a small business and there to earn it. As my wife constantly reminds me, I'm not a charity! Everyone gets a copy of my business terms, end of and, as others have said payment terms and methods to pay me are on my invoices.

Don't forget about the Late payment of Commercial Debts Regs in England and Wales. This assumes interest and payment is due 30 days/1 month after the invoice is submitted if no more specific terms are agreed.

Use Thomas Higgins Solicitors for non payers, it has good results (has done for me) and is cheap.

 

[TaffyDuck]

You have to be realistic. I have commercial customers, the worst by far is Welsh Water, who pay on 90 days. I factor this into quotes for work accordingly. Some pay up to 10% extra for this "service" although they are of course unaware of this. I don`t mind one bit as where else can you get up to 40% pa return on your money legally.

Most commercial customers have book keeping systems in place where invoices are paid at a set time after receipt. Often at the end of the month or at the end of the month following receipt. Very few pay on the nail.

I don`t pay my suppliers when I walk into the wholesalers and get some gear. I get an invoice at the end of the month which is paid at the end of the following month. Therefore goods and services I may have recieved on 1st February may not be paid for until the end of March ( 30 days after invoice)

I quite agree with the client in this case, it is unprofessional to badger them for payment earlier than this UNLESS you have an agreement to be paid on completion of the work.

 

[Geordie Spark]

It's not right though why should some customers have 28 days to pay, but when you take your car to a garage to have some work done on it they expect you to pay as soon as the work has been done.

Exactly !!!

 

[Geordie Spark]

My terms are printed on my invoice , but IMO you are entitled to your money on completion of the work, when you buy a steak in tesco you pay straight away, why do these people think it should be any different, it's a good idea to agree terms before, the Police would not be interested and your doing nothing wrong, it's your money that you are owed

You're absolutely right - apart from the Tesco steak maybe ........

 

[Geordie Spark]

You have to be realistic. I have commercial customers, the worst by far is Welsh Water, who pay on 90 days. I factor this into quotes for work accordingly. Some pay up to 10% extra for this "service" although they are of course unaware of this. I don`t mind one bit as where else can you get up to 40% pa return on your money legally.

Most commercial customers have book keeping systems in place where invoices are paid at a set time after receipt. Often at the end of the month or at the end of the month following receipt. Very few pay on the nail.

I don`t pay my suppliers when I walk into the wholesalers and get some gear. I get an invoice at the end of the month which is paid at the end of the following month. Therefore goods and services I may have recieved on 1st February may not be paid for until the end of March ( 30 days after invoice)

I quite agree with the client in this case, it is unprofessional to badger them for payment earlier than this UNLESS you have an agreement to be paid on completion of the work.

And that's the trick ...... get it nailed-down tight and IN WRITING so everybody knows what the agreement is before you start the job.

Initially, it may take a bit of time typing/writing and faffing about with bits of paper, but when it all goes pear shaped you'll be glad you spent that bit of time because it will save you a lot of time and money.

 

[TaffyDuck]

You can`t compare buying a horse burger with doing work. You are buying a product. This is the way the world works, get used to it.

If you are employed you dont expect to turn up on day one and get paid do you, no. You expect to get paid at the end of the month so anything up to 30 days later and any overtime is likely to be another 30 days after that.

Try badgering your boss after a couple of days and see how far it gets you.

 

[Hiddo]

You can`t compare buying a horse burger with doing work. You are buying a product. This is the way the world works, get used to it.

If you are employed you dont expect to turn up on day one and get paid do you, no. You expect to get paid at the end of the month so anything up to 30 days later and any overtime is likely to be another 30 days after that.

Try badgering your boss after a couple of days and see how far it gets you.

Equally, you can't compare a PAYE with a lad running his own enterprise.

 

[saveloy]

What beats me is why any customer needs 30/60/90 days to pay an invoice. Just pay up FFS.

 

[Octopus]

I've got a client (not what I'd like to call him) who owes me £62.50 from Feb '12 - despite maiing him, and calling round not luck getting paid.

A couple of weeks back I called round and his son was there and he gave me his mobile number..... so I've texted him 3 times ad now have his email too... so I've sent copies of the communications to the son (who's in his 30's).... and the "son" has acknowledged the documents and has asked "Thank you so much for this info, pls allow me a few weeks to get to the bottom of this, we are going through some family problems at this stage."

Hum.......

 

[Geordie Spark]

I've got a client (not what I'd like to call him) who owes me £62.50 from Feb '12 - despite maiing him, and calling round not luck getting paid.

A couple of weeks back I called round and his son was there and he gave me his mobile number..... so I've texted him 3 times ad now have his email too... so I've sent copies of the communications to the son (who's in his 30's).... and the "son" has acknowledged the documents and has asked "Thank you so much for this info, pls allow me a few weeks to get to the bottom of this, we are going through some family problems at this stage."

Hum.......

How much are car tyres these days ......... he does have a car doesn't he???

Battery acid does a nice job of cleaning all the grime from a car's paintwork too.

 

[ian.settle1]

Thought the last goverenment had brought in that they had 30 days to to pay after you had invoiced them after that you are allowed to charge them intrest on the payment

 

[Silly Sausage]

How much are car tyres these days ......... he does have a car doesn't he???

Battery acid does a nice job of cleaning all the grime from a car's paintwork too.

I'm liking your thinking here but something more subtle for these Southerners I think!

 

[Geordie Spark]

Thought the last goverenment had brought in that they had 30 days to to pay after you had invoiced them after that you are allowed to charge them intrest on the payment

Well it was an interesting theory, but if they won't pay the principle amount, how much chance is there of them paying the interest??

- - - Updated - - -

I'm liking your thinking here but something more subtle for these Southerners I think!

I'm a Geordie bonny lad .............. we don't do subtle !!!!

http://www.youtube.com/results?sear....0.0.0.99.231.3.3.0...0.0...1ac.1.5tuh_SJi4Ok

 

[Octopus]

Thought the last goverenment had brought in that they had 30 days to to pay after you had invoiced them after that you are allowed to charge them intrest on the payment

When I do work for their "brothers" I add a supplementary charge so I'm recouping the loss over time. Personally don't like the scum - so once the money is paid directly or by their brothers future calls for work will be declined.

 

[Knobhead]

What beats me is why any customer needs 30/60/90 days to pay an invoice. Just pay up FFS.

It's called accountancy. Why pay out when you can use the money for something else.
It's why you want a trade account at a wholesalers.

When I was in engineering planning / purchase I expected 30 day from the preceding 28th of the month. If I spent £5000 on the 29th our terms of purchase meant the money was in the company accout for near two months earning interest. Unless we had to nothing would be bought after the 15th.

 

[LlandrilloSpark]

All tesco meat is about 99% water anyway !!

 

[dan86]

All tesco meat is about 99% water anyway !!

is the other 1% horse?

 

[MDJ]

Hi everybody, I need some advice. I've done some rewiring work to a cafeteria, where I finished 10 days ago. After completion I send them an invoice - no reply. So after a week I send them few messages and an email asking about a date when they will pay. No replay. I send them another email asking for immediate payment. Received an answer that it's not professional to chase for a payment so quick, they need some reasonable time and that I'm a bully and they will report this to the police and trading standard agency so what should be my next step? A signed for letter asking to immediate payment?? Any advice welcome. Thanks. Tom

A toughy, but welcome to the commercial industrial world, IME 28 days is the norm, usually when you finish a job you tend to phone the customer after a few days to see if he or she is happy with the works, if they are you then send an invoice with your 28 days terms, I usually wait 30-40 days TBH, the problem with customers at this level is they won't want to know you if you insist on payment earlier, rightly or wrongly quick payments at this level can finish a companies customer base, ringing them and chasing for payment after a couple of days can be amateurish In their eyes, cash flow is the difference betwewen success and failure, I do feel for you, and hope you get paid soon, however next time at this level you need to expect to wait longer, JMO.


Mike

 

[mankman2012]

Did you explain in writing or verbally to him/her what the payment term was? If so put in writing of when that was to remind them. Or you can record your converation with them so that you can have record of it for yourself. Also explain that asking for money is not classed as bullying/harrassment because you did not hear back from them. Trading standard wont do anything and nor would the police. You have the right to get paid , it not like you are sending them emails every minute of the day.

 

[ipf]

There is no requirement - legal or otherwise - to allow any credit terms to anybody - there never has been and never will be.

To allow somebody time to pay is just a courtesy that you may feel like granting them or not at your discretion. So, if you made it clear at the very outset that you wanted paying on completion of the job that's the deal your customer agreed to.

Always remember: a Verbal Contract - like a telephone conversation - isn't worth the paper it's written on. Get it all in writing BEFORE the job starts !!!

Samuel Goldwyn's famous comment.
Wrong there G. I won a small claims case on a 'verbal contract', about 1.5 k. It's still regarded as a legal contract.
'Legally, verbal contracts are just as valid as written ones. The problem is overcoming the burdon of proof...'
If there is no dispute that the work has actually been carried out, it is proof. The trick is in contesting how much the work is worth.

 

[vxwestie]

IN my part of the world (south west) its the unwritten expectation that everyone wants and expects a 30day credit. As others say bigger companies will want more...
All a part of this crappy business we're in Im afraid.

 

[ipf]

IN my part of the world (south west) its the unwritten expectation that everyone wants and expects a 30day credit. As others say bigger companies will want more...
All a part of this crappy business we're in Im afraid.

Thats why the bill goes up for the bigger company. Yeah ?

 

[vxwestie]

You got it in one, Ibf...