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

 

[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 !!!