Comments
When Customers Don’t Pay
In the five years I have been running this business, never once has a customer not paid.
Every now and then, we run into issues, but every time, we have managed to come to an agreement that works.
We are a design company. I accept that sometimes the designs we do don’t fit with our customers immediately. That is why I stress to them from day one to be blatant with their feedback and give the guarantee that we will rework our designs until they are 100% happy.
Currently I have two customers who are refusing to pay me.
I know it is because they either have no money or the money they do have, they’d rather keep for themselves.
These two customers went the entire way trough the design process, they signed off on the designs, they used words like ‘happy’, ‘this looks good’, ‘yes lets proceed’. I keep a good record of these conversations for exactly this reason.
Because several weeks after they were meant to pay, they still haven’t.
The initial excuses were over the arrangement. So I reproduced the proposals and quotes they signed off on. These contained the full fixed quote and our payment details. No fine print.
Now, and this is what kills me. They are both claiming that they were ‘unhappy with the work’. This is the first I have heard of it, and comes several weeks after the project was completed on the basis that they told me the EXACT opposite.
Neither of these companies is based in New Zealand, both owe me several thousand dollars and I suspect neither was ever planning to pay it.
What can I do? I have tried talking to them, I have shown them everything they wanted. Now I am stuck in a position whereby they can attempt to ruin my reputation, while also walking away with hours and hours worth of work that I produced for them (There is only so much in design that you can NOT deliver before payment).
Hello, my name is Natalie, I have a business called 
March 2nd, 2010 at 12:20 pm
Name and shame.
Publish all designs, and all correspondence. Let them know that you’re going to do it, and then do so immediately.
Hopefully get a few other sites linking to it, so the info is Googleable.
The fact of the matter is, they’re not going to pay you. So you’ll have to write it off as experience (been there a couple of times, personally). But the next time they try to get freelance work done, hopefully the provider will Google first, and perhaps come across your info. Small comfort, but there’s little else you can do.
March 2nd, 2010 at 1:20 pm
Try to resolve this privately at first, as there are loads of options availible.
First ask a friend or someone experienced with credit control to help you out. Have them call as your credit controller and try to see if they can resolve the issue, a bit like design credit control really is a skill, and that person might have some luck. It’s one of those skills I have and i can be efficient scary and effective with just one call.
After that talk to your accountant and laywer see what they recommend.
dont go public until it’s your very last resort.
March 2nd, 2010 at 2:50 pm
I’m with sue first up – any chance you can sell the debt to a credit company, get 80% (perhaps) of the amount and leave them to chase them up hill and down dale?
March 2nd, 2010 at 3:31 pm
Wow! Thanks everyone who has commented and emailed me. Everyone has been REALLY helpful!
I just contacted an international collection agency, will wait to see what they say.
Must say, I’m feeling a LOT better about the whole thing and will keep everyone posted in case it can be of use to anyone in the future :)
March 2nd, 2010 at 5:15 pm
Yes, it sucks.
And in my experience there’s bugger all you can do when they’re overseas.
I usually stage my invoices through several design stages (which is easy to do with architecture), but I’ve still been stung at the final stage with nothing more than either a phone that just keeps ringing or a mouthful of “I’m not paying.”
If you find a good solution (and I hope you do), I’m sure lots of us would be happy to hear it. :-)
March 3rd, 2010 at 3:50 am
bastards…
March 3rd, 2010 at 3:52 am
opps sorry if that was rude..just makes me so mad when people/companies are dishonest. I hope you get it sorted out…
March 3rd, 2010 at 9:34 am
Stage payments is the way to go, get paid for chunks of work – payment received or you don’t move to the next stage of design – that way you are spreading the risk.
Also, think seriously about introducing a plain english ‘Agreement’, its standard practice and having signed they tend to make people think twice.
Yes, it would be great not to have to do any of this but as you are experiencing – non payment and poor redress put you and your business under stress (rhyming not intentional ;)
Good luck, i’ve been there and its no fun.
March 3rd, 2010 at 3:01 pm
Update:
I’ve done staged payments for ages now and in this case it has limited the pain of the final payment.
I have contacted a debt collection agency and sent through all the info – including the hilarious email chains that went from them being super happy with the work and officially signing off to them coming back a couple of weeks later, suddenly totally UNHAPPY with the work, when I pushed for payment.
I’m getting charged a 35% success fee if they receive payment but I’m happy (after all your advice) that they are experts and will do a professional and unemotional job at getting the invoices paid.
March 15th, 2010 at 7:56 pm
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February 13th, 2012 at 3:56 pm
It’s why I built this website:
http://www.randyslist.com
I was a contractor for 20+ years and the occasional difficult customer can do some damage. Obviously everyone else thought so too, we spread to all 50 states in 32 days!