non-payment

[robbie]

Before you read this, yes I know I've been an idiot, and I know what I should have done. However, this is what I actually did.

Small job for a business - £540. Includes hosting provided by me.
Invoiced on 4th November 2009.
No contract, no deposit. Also, no reason to suspect a problem.
Still no payment.
Loads of emails to bloke concerned, who keep saying he's chasing it up with accounts.

What next? Obviously if I'd used a contract I'd have included pate payment charges and a warning that the site would be taken offline. But I didn't. Honestly didn't see this coming, as the whole setup could not have been more legit (compared to some of the jobs I do).

Never had to deal with this before, so just wondering what's best.

Ta

[sarahA]

Just because you don't have a written contract doesn't mean that you can't
a: charge a late payment charge - http://www.payontime.co.uk/legislation/legislation_main.html
b: remove the site for non payment (well I'd suspend it for say 2 weeks first)

Contract or not, no payment means anything done hasn't been paid for and therefore you can remove it if you wish.

Personally I would inform them that if payment isn't received within 48 hours you will be forced to suspend the website, (leaving a notice to state it has been suspended due to non payment of invoice - always embarrasing for the client) and the unpaid invoice will incur a late payment fee of £X (check the site I linked to, got all the amounts in there). Then once 48 hours is up, reissue the invoice with the late payment fee (or issue it as a new invoice) and inform them that the full amount must be received before the site will be unsuspended.

[keri]

A guy i used to work with favoured simply changing people's email passwords as a way of getting them to pay up, such a simple thing but some people thing the world ends if they can't get their emails so pay up PDQ - assuming this site included email of course

Failing that go with what Sarah said, or if you are nasty like me, replace the entire site with a single photo of a pile of money, that got me my cash but of course no referrals or repeat business - not ideal but i avoid most freelance stuff now due to the headaches it always seems to bring me.

[robbie]

Thanks both

I'm going with Sarah on this one, although I like the idea Keri!

[samhs]

You can charge £40 late payment fee plus 8.5% interest annually, which works out at approximately 12.5p per day. If you add up the number of days between the invoice going overdue and payment being received, you can multiply those figures together - so if the invoice should have been paid by 4th December you've got a further 27 days in December, 31 in Jan, 28 in Feb and 22 so far in March - a total of £13.50 additional interest you're allowed to charge by law.

I'd send him a statement detailing the above with a fresh row for each item:

- Design: £500
- Hosting: £40
- Late Payment Fee: £40
- Interest up to 22/03/2010: £13.50
Total now due for payment: £593.50, and I'd also include a pre-action letter - give him 7 days to bring the account up to date, otherwise you'll pursue the matter through the Small Claims (County) court - http://www.moneyclaim.gov.uk - at which point the court fee (I think £25?) would also be added to the amount you're claiming.

It's important to note in your statement and the pre-action letter what steps you intend to take, when you intend to take them, and the relevant payment law (as you can find on the payontime site Sarah mentioned above) - there's a specific phrase you should include with reference to the interest charge you can copy and paste from there.

Oh, and try to be courteous and offer to address any problems he might have with making payment - it will help your case if it goes to court (but you'll probably find the threat of a CCJ will be enough to spur payment).

hth

[net-curtains]

otherwise you'll pursue the matter through the Small Claims (County) court -

I never bother taking clients to court personally, too time consuming. If a client is deliberately avoiding or refusing to pay their bill, I send a final invoice containing details of a credit collection agency I use, which also states that any expenses incurred in collecting payment will be added to their bill. I can't remember what they charge but it's a lot less than it'd cost chasing and taking it to court personally.

I've only had to add this a couple of times to invoices - complete sharks of clients that were refusing to pay - and on both occasions they paid immediately.

[sarahA]

Small claims is £50 at least as that's what I paid about 5 years ago.

However must admit I agree with NC, it is a hassle, especially for such a small amount. I wouldn't hesitate on larger amounts but I used it for a client who owed just under £500 and the stress it caused wasn't worth it (then again maybe it's because I work myself up into a stress!). But at the same time if it's something you may need again it is a good experience and I'm much more confident in knowing I could deal with it again

You also learn from the experience. Never do work without a deposit (unless it's either very little or you really trust the person, and even then, anyone can turn their back on you!), never pay for anything eg. domains, hosting etc. without getting the payment first etc. Unfortunately it does turn you into an untrusting person.

Also agree with Sam, give an option to allow them to pay it off in instalments. Just make sure you get something in place to explain how it's to be done and that payment must arrive on time else you'll suspend the site.

[net-curtains]

However must admit I agree with NC, it is a hassle, especially for such a small amount. I wouldn't hesitate on larger amounts but I used it for a client who owed just under £500 and the stress it caused wasn't worth it

I'll have to dig out the details, but I think this company charge around 5 or 10%, so it would only have cost you about £50 for £500. They also have their own legal team, and any costs incurred would be charged to the client. They look at the case first though, to make sure you've got a solid case.

The beauty of using a collection company is that all you have to do is to pass on the debt, there's no stress or hassle involved. Clients know this too, so they're not inclined to call your bluff.

[Mike@TheWhippinpost]

First send an email asking for clarification on something or other to do with the service your providing to which he has to respond. Then, at least, you have documentary proof of his acceptance of your offer (contract law).

Good luck.

[robbie]

Thanks for the advice. I ended up emailing this morning asking for confirmation by the end of the day that payment would be made by Friday. Otherwise I would send details of late payment charges and removal of the site.

Confirmation and profuse apologies from a very high level arrived this afternoon. Also said that if I get confirmation but no payment, same deal with the charges etc. See what happens on Friday.

[samhs]

Just with reference to the "don't bother doing the court thing" mentioned above, I would tend to agree, but a small claims court approach made via a court != money claim online. Money Claim Online sends court paperwork demanding payment, and the person you're claiming from has 14 days to respond with payment, an admission of debt or their intention to contest the debt. This, in my experience, is normally enough to make them realise that you're serious about collecting the debt - and is a good escalation route that you can initiate and monitor yourself.

However must admit I agree with NC, it is a hassle, especially for such a small amount.

Do you mean on Money Claim Online, Sarah? It's not exactly a modern website, but it's pretty straightforward to enter details into IIRC, and I've found it pretty stress-free. I'm not sure I'd be saying that if I'd had to file paperwork directly with a court in person mind you.

My issue with debt collection agencies is that they seem to work on their own terms, and at their own pace. We've only ever tried to use one once, and it wasn't at all a resounding success (but the company was in another country, and had an ex-lawyer as the owner so they knew how to play the game - and to be fair we'd seen the warning signs before even signing the contracts on that job - I knew it was going to be nightmare from the word go - have learnt to trust instincts on those kind of things).

The two occasions we've had to use Money Claim Online have both resulted in payment with no need to actually go to court. I don't want to give the impression we have lots of non-payers - that's about the only three occasions in 10 years that I can recall.

Anyway, it's good to have a few options available to you - so do whatever feels right for you.

[net-curtains]

My issue with debt collection agencies is that they seem to work on their own terms, and at their own pace. We've only ever tried to use one once, and it wasn't at all a resounding success (but the company was in another country, and had an ex-lawyer as the owner so they knew how to play the game - and to be fair we'd seen the warning signs before even signing the contracts on that job - I knew it was going to be nightmare from the word go - have learnt to trust instincts on those kind of things).

The company I use, well threatened to use, was recommended by a friend who's employer uses them all the time. They're UK based and my friends boss was singing their praises to me for being cheap, fast and effective.

As I say I've never personally had to use them, but adding the option to an invoice seems to do the job.

[sarahA]

However must admit I agree with NC, it is a hassle, especially for such a small amount.

Do you mean on Money Claim Online, Sarah? It's not exactly a modern website, but it's pretty straightforward to enter details into IIRC, and I've found it pretty stress-free. I'm not sure I'd be saying that if I'd had to file paperwork directly with a court in person mind you.

Yes. Back in 2005 I had a non paying client and after a couple of months of requesting payment I went to the money claim online site. Yes the initial start is simple, fill out a form online, pay £50 (add it to the final cost) and that was it. Had a letter confirming it.

But then you get the paperwork from the client's response, which was full of lies in my situation. Can't remember if you respond to that first or if you just get a form/booklet to fill in by hand and I vaguely remember to back my case up I submitted a detailed letter covering the 2 months of work in question and about 9 documents (emails, letters etc) but collating these actually resulted in about a 300 mile round trip to my parents (who happened to be away at that time) to pick up some more emails on my desktop PC there which I didn't have on my main laptop for some reason.

This main form was the stresser really. Sorting all of that out, sending off two copies by special delivery, one to the court, one to the client. Never received anything off the client though, and then waiting again to see if the judge would rule in my favour (which at that point I thought he would as the client hadn't proved any of his lies when I had dates and proof of everything against what he'd said). Then I got a letter telling me I'd have to go to court in Hammersmith in the August. So it dragged on from about May to August. Finally the client phoned a week before it was due and offered me half which I (stupidly) agreed to but it wasn't worth my time to take a day to go up there and potentially lose if the judge didn't understand the situation properly.

Often with a money claim the initial letter from them to the client is enough to get a payment out of them, but when it starts to drag on it's just an additional stress. Understanding the paperwork (once it gets to the main paperwork) wasn't overly easy either. I remember calling CAB who weren't interested in helping, and also a local solicitor that would have cost me far too much to see. With my parents out the country and my friends not really able to help it just wasn't a great situation.

Luckily we've not been in that situation since but we've tightened up on payments and very few clients get work done without paying at least a deposit and Mr A. seems very good at getting people to pay their bills (probably his accent )

Ironically, this client then contacted me about 6-8 months later asking me to set them up an ecommerce site to sell their products online, so I took a very large deposit and told them that once I was halfway through they'd need to pay the rest as I didn't trust them (site never actually happened but I kept a chunk of their deposit for wasting my time )

For what was £460 (plus £50 for the money claim) owing I felt it was more hassle than it was worth. Certain issues arose that could/should have been avoided. A round trip to my parents didn't help for a start! It was worth it for the experience but I don't know if I'd go that far for a small amount again. Any amount however small isn't to be ignored but sometimes you need to weigh up your time and stress levels with the hassle of the chance that it goes all the way.

[Haze]

I had a client last year for whom I built a one page site.It was all they wanted, and so it was very cheap (who said just like me?).
And last year the let me know they were going to be taken over, and the new owner would need a site for the new combined company. But could I extend their hosting and email services whilst the takeover was going through? Not wanting them to be left high and dry, and with the real possibility of additional work coming in, I said I'd sort out the hosting/email/domain which were all due for renewal and invoice them.
And you've guessed it, they reneged on the agreement.
I emailed them, received acknowledgement of emails being opened on their system. Tried calling the bossman, but he was never available although I was told that he was presently out of the office, so he did seem to be involved in the company in some way. Sent letters by registered post. Then received an email from the new owners of the company to say that the chap I was trying to contact had nothing to do with the present company and so they could assist me no further. So much for trusting people and taking them at their word. I do the hosting, but that's not the point, it's the principle of the matter.

[Ben]

I recently heard of the boss of a reasonably large well-known Scottish company recently who refused to pay his bill on several occasions and the boss of the company looking payment jumped into a taxi when round to the office and had what can only be described as fisty-cuffs in reception. Red faces all round, and the bill was settled within the week.

[net-curtains]

Then received an email from the new owners of the company to say that the chap I was trying to contact had nothing to do with the present company and so they could assist me no further.

If he worked for them after they took over the company, then send them an invoice and bill them for the minimum hosting period that covers the additional hosting they received. So if they had 2 months and you charge quarterly, charge for that. Add to your invoice a bit about debt collection agencies and additional fees for overdue payment.

If he never worked for them after the company was sold, invoice him personally.