Wise Women List Archive File

How to Get Clients to Pay Their Bills

I went through the archives on the site for information on handling clients that just won't pay (one excuse after another, after "the check is in the mail", etc.). The info in the archives really only dealt with how to apply late fees/charges - not in actually getting the money. This isn't for me (not yet anyway) but for a few people I know who just can't seem to get certain clients to pay up and I'd like to have a strategy in place in the event it happens to me or my husband (self-employed carpenter).

So what are some of your tactics?
Late fees? (what kind of percentage is appropriate?)
Having a third party call?
Small claims court? (this is really a last resort I would think but has anyone had to go to this point?)

Judging by the conversations I've had with small business owners (web and non-web alike) this is a big issue but I've really only been able to locate one article (http://www.score.org) that deals specifically with getting your money. Does anyone know of any other good articles?

Thanks in advance :)

Get a deposit up front and invoice regularly. If they don't pay, don't do any more work. Having a good contract upfront that explains responsibilities on both sides is very important.

I've been very fortunate that I've only had one client not pay, and that was a fairly small amount that he thought he had been overcharged (I gave away too much for free and when I started to charge for it he got indignant). He was fired as a client.

For a debt that's already past due, it may help to send a certified letter asking for payment and threatening Small Claims Court action. The few times I've used this method, the clients paid promptly.

If an on-going project, I stop work until payments are caught up. If late payment becomes a habit, resign the client.

Prevention is much more effective than collection:

-- a written, signed contract is a must

-- get 2/3 to all of your money before completing the job, and charge enough that if you don't get paid the balance, it won't kill you.

-- if a new client and an individual or very small business, get all your money up front. If not 100%, get at least half.

-- Never start work prior to receiving 1/3 to 1/2 deposit (many jobs evaporate when the prospective client has to cough up money).

-- Never turn over the work until the balance is paid. For Web designers, because sites can so easily be stolen, this may mean only showing non-functional images or color prints instead of functional sites, keeping the work on your own host instead of the client's, showing functional sites from your laptop, etc.

-- be sure your contract states that no rights of usage are released until full payment is received.

-- avoid working for the kinds of small business/individuals who have problems paying. Sell only to mid- to large-size businesses.

-- But even with larger businesses, still try to do the incremental payment routine. You never really know who you can trust. (The only large debts that I was never able to recover were from a division of American Express and a Sheraton hotel.)

Hope that helps.

My tactic is very simple, for a website the client has to pay 50% of the total amount BEFORE I start touching my crayons and the other half needs to be paid when the work is done BUT BEFORE delivering the work and during the process I show only a mockup.

For the customization of a template, the client must pay the entire amount BEFORE starting to do any change.

No one has been reluctant so far and that way, all fear of being burnt is gone ;-)

The way we handle it is that we tell them half of the full amount is to be paid upon signing the contract. While working on the site, it is hosted on our webservers. Once the project is fully completed, we require the last half before we upload to their webspace. If this does not happen, they don't receive the site.

>and during the process I show only a mockup.

How much of a mockup, and what if they keep asking how much is done? And how do you have them check the text to see if it's accurate - sometimes they send wrong information that needs to be corrected.

How do you do your mockup?

Thanks, I need this info because some people "nag". :)

>How do you do your mockup?

...I usually do all my preliminary design work in Photoshop. I do the complete page layout right in Photoshop, never doing HTML until the Photoshop layout mockup is approved. Where I intend to have regular (i.e., not a GIF or JPEG) text, I greek in the text in Photoshop using Verdana with anti-aliasing turned off). I then show a JPEG of the page mockup to the client.

If I need to show a page to a client and the page has already been coded, I simply show a screencapture of the page.

> > If I need to show a page to a client and the page has already been
> > coded, I simply show a screencapture of the page.

This keeps them from hijacking the webpage and using it, but be sure you have already been paid for the design time you put into it. Very often a great deal of the work is in laying out the design and navigation, not just the html portion.

Like [someone else], I get the client to approve the design layout (done as a photoshop image) before I ever start slicing, dicing and inserting text. Even if you put the approval pages on your own server rather than theirs it is too easy to copy the page and graphics.