This content has been marked as final. Show 18 replies
Client has not Paid, Welcome Scott.
You gave us the answer " Mind you, I do not want to lose this account. Ever "
Tell me more. How long have you been in business??
How large (% of your billing) is this client??
Does he say when he will pay these invoices??
Do you have a Lawyer?? Accountant??
Not the answer, but the more you share, the better I can help you.
Well, I've been in business since the beginning of 2007. Although I have done software consulting and development for about fifteen years. The client is my biggest client and represents about 50% of my current business. Its a large, open-ended contract. As I reach milestones he gives me more projects.
I'd like him to pay me. Oh yeah, did I mention he is a friend?
Client has not Paid "I'd like him to pay me. Oh yeah, did I mention he is a friend??"
Get real How long WILL HE still be YOUR FRIEND??
Does he say when he will pay these invoices??
And what happens to your business if he does NOT pay you??
Do you have a Lawyer?? Accountant??
This is not helpful. Don't you think all those things have been running through my mind? Recall that I said he did pay on-time for awhile? As for getting a lawyer, I have one on payroll. She is my VP and General Counsel.
I need some decent advice here about how to convince the guy to pay. Not a knee-jerk reaction that will kill a relationship. That is not anywhere near good business practice.
Perhaps I overestimated the potential for good business advice here.
If you have told your "friend" how much of a strait he has placed your business in and he still is not able to pay, and you by all means don't want to lose your "biggest client," then what do you expect to hear? You determined the parameters of the answers you get by placing these conditions on us.1 of 1 people found this helpful
Sometimes, the best answer is the one that has been staring you in the face - make it a solution that benefits both of you. It shows him that you are still his friend and that you are trying to help both him and you. The dynamics of a person relationship changes when money enters into it - the guilt of owing a friend can change things. Protecting both a personal and a business relationship requires more work sometimes. Here's what I got:
- Try to restructure the outstanding balance adding a slight interest charge to cover your inconvenience. This can work both ways, \\ you can offer a small discount for payments made early.
- Look at moving this relationship to a retainer based system that for regular payments reduces the amount he pays you for your services.
I hope this helps. Good luck.
It's always difficult when friendships come into business. How well of a friend does this client think of you? If he was your friend, he should give you a better understand as to why he hasn't paid the last 4 invoices.1 of 1 people found this helpful
Remember, "Business is Business" and should not be confused. If this client was doing business with another contractor/business, that business would expect to be paid.
Since this client is your friend, you should have a meeting to discuss further the impact of the situation -- of course, tactfully. There could be some resolution that will come out of it. Also, you may need to have a closed ended contract per project in order to insure that you will get paid. If this client values, not only your services, but your friendship as well, a common ground (and professional) will be found.
Hope this helps.
Hard to give you the info you want to hear without knowing all the details, since there is obviously
something going on here below the surface. This appears to be a classic case of having to play detective and find out the REAL issue going on here, which in all likilhood is NOT the reason your client/friend is verbalizing.
I'd say you need a man-to-man sitdown with this person. Explain that personal is personal, and business is business. You sympathize with whatever his problem is, but whatever it is, it isn't YOUR problem at the expense of your business, which is what will happen if he causes YOU cash flow problems and you lose YOUR credit rating with YOUR suppliers and YOU can't make payroll and pay expenses. By the way, there HAS to be both a reason and a solution--I've yet to see the situation where two reasonable businesspeople operating in good faith can't think of something. By the way, there HAS to be a good reason for his problems, since from what you've said he hasn't stopped paying you just for kicks.
Solutions to explore:
A reasonable but regular payment plan.
Help/direct him to a business line of credit so he can pay you and deal with his finances with the bank, not you.
Have you considered opening up a merchant servcies account so he can pay you on a credit card, then pay his monthly bill tot he credit card as quickly or slowly as his cash flow allows?
This reminds me of a great sign I saw in a Shakey's Pizza Parlor many, many years ago: We made a deal with the bank. They don't sell pizza, we don't cash checks". This is basically your situation. You are in the software business, but your 'friend' is unwittingly putting you in the collection business where you don't want to be and where your livlihood is not. You need to explain this to your friend in no uncertain terms: I'm not in the collection or revolving credit business. If that's what you want, you need to deal with a bank, not with me.
If this isn't what you want to hear, sorry. It is the 100000% truth. Friends don't put friends out of business.
Your friend needs to understand this and cooperate as you seek out a solution.
I finished my post and then saw that you had just responded amspcs.
I too liked amspcs's answer. Well I agree that relationship is very important. But if that can come in way of running your business smoothly without peace of mind, it will affect both business and relationship.
Visit www.lalithabrahma.com and get your educational series on how to protect your family and grow your business peacefully.
Sign up for free newsletter at www.elbeeservicesllc.com to get powerful tips on exploring the ENTREPRENEUR in You.
Sorry to say, if you get any more "Big" clients like this, you will be out of business.
If you do not want to push the payment issue direct, try sending an invoice through the mail. Send a second one marked PAST DUE. In the meantime, if he asks for anymore work or support, Politley say you will be happy to help and will try to fit it into your schedule but you are a little busy with ourth (paying) clients right now.
He will either get the hint he needs to pay or you will know you do not have a good customer.
You need to decide whether you want to salvage the business relationship, personal relationship, neither, or both. Keeping both may not be possible.
Did you ever provide him with a formal "contract" when you started work? If not, perhaps it is time to do so. Does he think you have extra time and are just helping a friend?
You mentioned that you are an investor in the business - does he expect since you own part of the business that your IT work is provided as sweat equity and/or to help the business grow? It could be a simple misunderstanding - I never bill my own company for work I perform for it....
Best of Luck,
@iceman you might want to use factoring with your client, I think this is the best practice it has been around for more than half a century and it will not interfere with your friendship. You get paid and you keep the friendship in tact. Let me know if you need more information on factoring and reputable cmopanies I use all the time.
Peace and Blessings-TheCeo1974
Let me call him and talk to him, I'm sure with a little finese he will pay...I'm good at collections and as you said he is a friend..and he knows he is a friend, you need someone outside the box looking in to collect this money and show him that friendship is one thing but business is business. Let me try...I do debt collections and no project to big or small.. Yes I charge a small fee depending on the age of the receivable, but it will be worth it..
don't keep letting it go, it bothers me that he is not paying you, and I have red flags up about the stability of his business. Dig your heels in just in case something happens, and protect yourself to be sure you will get the money. I'd be glad to help. Larry Edinger my email email@example.com
if interested...Best of Luck
Personally I beleive this guy is treating you badly because he knows you don't want to loose his business and you are supposed to be a friend. Do not delude yourself into thinking that you are his friend....you are not. Friends are upfront with each other in business even when it is ugly. You are looking for nice ways to solve this....there aren't any. Solve the problem and get on down the road. Get some new clients to make up for his business mess and don't take on any new projects for him.
If he had a budget shortfall in July sounds like he may not have additional business for you sometime down the road. But the good news he needs you more than you need him! You understand all the ins and outs of your business, he does'nt, yet his business relies on knowledge. When he contacts you to work again let him know when you will be over and before you can start you will need a check for the overdue account
(tell him you know how busy he is so it must have slipped his mind). In the meantime, you may have to look at this as a wash. Since the first 4 invoices should have covered the overhead. Today, begin cold calling to secure a simular client base as this one, then you will not mind cutting ties.
As far as friend, in the economy a great number are under pressure and I would simply look at this as a business stress situation, and keep your friendship seperate. If you have a spouse you may want to ask them to be the bad guy and collect debt, same for those who ask you for discounts have them go to your
spouse for a Freinds and Family Rate this will omit you from free service to a friend. Ask your spouse, friend or other to be your "Bull Dog" for the company.
Uh folks, I'm not sure Iceman is still active. His website is being parked by GoDaddy, and he hasn't posted in months. I think this thread became live because someone was trolling old posts and saw one that they thought was related to the services that they offered and responded.
A lot of the information that is being posted is great to read but it may not be reaching the person who started the post. Iceman's last post was August 2, 2008 - more than a year ago.
I think if you are trying to reach someone maybe you might want to do some research to see if the person has posted recently or how old the post you are responding to is. I am not discouraging anyone from posting, I'm simply saying there's a reason you may not be getting a response.
I understand how you feel. Me and my wife have run into the same thing with some very old clients who have been with us forever! So the one thing we have done that has worked is to lower the monthly fees a bit. Discount is what people are looking for today. If you work with them they will work with you. But it sounds like they are taking advantage of you because your an investor. What is it your charging him/her for?
Sticky situation, it sucks to be in such a situation.
Well, I think you need to understand what exact challenges your client is having and help him resolve those challenges - Once the cash flow starts, I'm sure he would be happy to pay off your account.
Go to original post
Reply to original post
What do you do about a client who is the potentially most lucrative account, is the owner of a business in which you are an investor, who paid the first five invoices, but has not paid his last four invoices? He said he had a budget overrun for July. Mind you, I do not want to lose this account. Ever.