To expect people to pay for work on time(18 Posts)
No I wasn't thinking of doing it this time. Maybe just changing things in future.
I'm sure an expert could tell you, but I don't think you can impose late payment fees retrospectively unless it is part of your terms and conditions when you agree to do the work, unless you get to court in which case I believe you can claim for reasonable expenses. Don't quote me on that, but it's worth looking into and considering before doing anything in this particular case!
AlbertaCampion, solicitors specialising in debt collection will produce one off letters for a fixed fee - mootime they can be an effective deterrent, i'm a debt collector and have used them in small and larger companies.
It's so annoying when clients do that isn't it. Fortunately this doesn't happen to us that often but, a couple of years ago, we started declaring in our T's & C's that late payment of invoices would be subject to a sliding scale of late payment fees. Decide which percentages work for you but, even though our stated penalty fees are small by anyone's standards, I'm pleased to say that most of our clients do now pay up on time.
i have recently had similar and have managed to gee it along with phone call after phone call and then threatening not to be able to do next project. a penalty clause would be good, late payment cost extra. is that legal to do!
I do payment in advance, work stops after 3 days if no payment and I have a credit control policy which is implemented by my accountants. Clients sign up to this from the outset so it is clear and I fire any client who misbehaves.
Surely this is an area where there should be tight legislation to force solvent companies to pay on time, with penalties if they don't. There could be a special circumstances appeal process available to cover variables.
Whoever screams loudest gets paid first - something it has taken me 7 long years to realise. I used to hate chasing payment but cash flow demanded it.
Now I make sure I send statements just as payment becomes due, chase letters the week after, snotty letter after that putting their account on hold, threat if court the week after that and then do it regardless. Since I have enforced this religiously I haven't had one single non payer
Thanks. I know really what I need to do. To be honest the sums in this instance do not really justify the small claims court. I just find it so annoying. Fwiw, my terms are 30 days. Which is why it's stings when they don't pay in time. It also annoys that this one has queried it only after its become overdue and makes me feel like I'm in the wrong.
I'll keep chasing and maybe try the penalty thing in future, I also am thinking about staged pavements on large projects in future. I just hate it when this happens, it makes me really anxious and uptight.
I know also that I should expect some late payment, and factor that in, but at the moment there is just not enough coming in to cover everything when people pay so late.
Yanbu. Tis the pits when running any kind of business.
Is it possible to make your payment terms variable depending on who you are dealing with? I deal with individuals and companies. All individual clients pay before and now I have 3 late payers who I take payments from before I do the work. I just told them I had a company go bust on me owing a lot and it was a choice between increasing costs or reducing exposure to keep the accountant happy.
I don't have an accountant as it happens but he is handy to invent occasionally when you want to keep a relationship with a client free of money conversations or make decisions that aren't going to be popular and chase money up.
Erm, I think there is some well-meaning but odd advice on this thread.
OP, the small claims court is an option - but really, it is a last resort. Getting money through small claims takes ages, and will sever the working relationship for good. Getting a debt collection agency to take on the task, when you are a one-woman operation, may prove easier said than done!
Realistically, you have two options. Refuse to continue working for this particular client until you have been paid. Tough stance, but it works. Also, you might want to review your payment terms. If you're wanting payment within 7 days, say, you can sing for it. 30 days tends to be the norm, or used to be - the recession has promoted many companies to extend their payment terms, particularly the larger ones. 60 days not unusual.
The Consumer Regulations Act (think that is what it is called; you'll have to look it up) allows you to levy a penalty fee and interest upon late payers. I always include a clause/notice to this effect at the bottom of my invoices.
OP, do you have a debt collection process, including the sending of letters and statements to clients?
Early settlement discount is a good idea, as is referring to the possibility of late payment interest. You could also add a term to your Ts & Cs saying that all queries should be raised by X days after invoice or they are invalid as a reason for none/late payment.
You may do this already, but if not, consider payment in advance or staged payments.
For terrible payers, debt collection agencies/solicitors will send out a letter chasing payment for a fixed fee - between £10-£20.
I think you are being unrealistic when running a small business not to factor late payment into your business model as it's pretty much standard behaviour.
I agree it would be nicer if people paid immediately or even within the time specified on the invoice so YANBU to wish they would, but YABU based on what is common practice to actually expect that they will.
How about charging a little more than normal then offering 10% discount (taking it to your usual charge) for paying by X date, ie on time?
One client has two overdue invoices...
can you pursue them through small claims? I really have no idea if that's possible, but feel for you - I know when we paid £5K promptly for a new heating system the guy was overjoyed and really thanked us, some people keep him hanging on and on. So unfair!
That's a bummer but I guess you could send invoices which detail the *late penalty fee*to be incurred each month the bill is not paid in full by a certain date.
I run a small business and have really tight cash flow as I only work pt and use freelancers who I pay immediately. I try to keep my costs down (often not charging for all of the hours spent) basically to keep good working relationships and to try to ensure prompt payment. Yet time and again people are late. One client has two overdue invoices, which having replied a week after being told that they were overdue has begun querying them. Half of the work was done by a freelancer who I paid two months ago / do I'm seriously peed off...
Join the discussion
Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.Register now
Already registered with Mumsnet? Log in to leave your comment or alternatively, sign in with Facebook or Google.
Please login first.