What do you do about Non-Payment?

chiquitita · #1 01-15-2003, 05:24 PM

What do you do when you have a customer that you send an invoice to and they don't pay you? What is the best route for a small business to take in these cases?

Doug Nelson · #2 01-15-2003, 05:44 PM

This isn't much help, but I get payment in advance for this very reason.

At very least you can keep their originals until they pay.

chiquitita · #3 01-16-2003, 05:31 AM

The problem that I was having was with someone who sent me digital images. I am going to get pymt in advance from now on. It is too bad that people can't be honest.

DJ Dubovsky · #4 01-16-2003, 09:44 AM

It only happened to me once just recently and the same thing happened. They sent the images via e-mail and after dealing with customers that have been so honest in the past, it caught me totally off guard. I had no trouble contacting her via phone or e-mail while the work was in progress but suddenly she's vanished when the job was done. Luckily it was a small amount but I've learned that when you don't have the original you need to secure the cash first. It's a shame because I like to deal with people honestly and respectfully and now I've become tainted. But for 2 years of business and only one bad apple, I would say I'm pretty lucky.
DJ

June Curtice · #5 01-16-2003, 10:29 AM

Quote:

Originally posted by chiquitita
What do you do when you have a customer that you send an invoice to and they don't pay you? What is the best route for a small business to take in these cases?

In a pefect world we'd be able to do business on a handshake. In the real world it's best to be more specific. Our work is primarily web development and print design, but we learned the hard way to set clear payment terms and to put them in writing. We have a signed contract or work order for every job, no matter how small. A 50% deposit is required at start of each project, with incremental monthly billings on large projects that extend more than three months. Otherwise balance is due in full before work is released. I've been in business 14 years and never had a problem since using this system. My first year in business though I was unable to collect on a major print project. It was done on a "hand shake" and not getting paid almost put us out of business.

If all else fails, your alternatives are to take the customer to Small Claims Court or to declare the amount owed as a bad debt on your income tax form. Keep accurate records of all phone calls, letters and other follow-up made to collect what is owed since you will need this information in either case.

I'm sorry this happened to you and hope you are successful in getting paid.

Sanda · #6 01-16-2003, 01:18 PM

I've had a problem with a non payer. It wasn't a photo restoration but 500 double sided prints of a brochure I did for a small business. Unfortunately the business owner was a friend and I trusted her to pay after the end of the job because I had done more than 1000 brochurse for her befer and had no problem with payment. I wasn't here when she picked the job up and my son knowing she was a friend gave her the brochures. Although I have sent her an invoice and then a statement at the end of the month still no payment. I'm quite annoyed about it and there will be no other work done for her even if she does eventually pay. This as ruined both a business transsaction and a friendship. So in future I will insist on a deposit before taking jobs.

Ed_L · #7 01-16-2003, 02:12 PM

There is one way I know of that should work very well for files that are sent to you, and even when doing jobs for friends. Vuescan ($40.00) is a scanner software, available at www.hamrick.com . If you have the software, you have an option to include a crosshatch (I think) pattern across the image when scanning. The finished restoration could be scanned with the pattern, and a finished file (or print) could be given to the customer, with the pattern showing, which would make it useless for almost everybody. But the quality of the finished product is still easily seen. The file (or print) without the pattern could be sent when payment is received. This could become your policy, and should not strain friendships, which happens more often than you might think. I don't use the option because I don't have a business.

Ed

Paul Rupp · #8 01-23-2003, 11:12 AM

I tried the payment before work route without much success. Sometimes I can get a 50% "deposit" before starting a large job.

What I do is post a LOW quality watermarked copt of there image on my website for there approval, as soon as it is approved and payment is received, they get the final copy. This seems to work best as the customer can see what there getting before they pay for it. They can ever request changes if they would like.

This also works if they send you a digital file to work on, post it in low res high compression and small (large enough to get a good idea of your work) with the watermark so "IF" they tried to print it, it would have your company name or logo on it.

Hope you get paid eventually. If not, chaulk it up to experience. It happens to all of us one time or another.

Paul

Wayne_J_Gilbert · #9 06-20-2003, 02:26 PM

I never let anyone walk away without putting a 50% deposit or paid in full.

chiko321 · #10 05-04-2005, 03:00 AM

well, as far as getting paid for wasted time, my solution is to have the customer pay at least half, or whatever absolute minimum you both agree that the work would cost. Easy. Just don't do the work until you have the juice to squeeze.

Right now i'm sitting on a 2.5-year-old task worth $40 commissioned by a Lockheed Martin engineer. LESSON: Affluence should not affect your willingness to start a task without down payment.

bigkidjr · #11 05-04-2005, 12:56 PM

Yep, I always go the 50% deposit route. I post a proof to my website (marked PROOF) in bold letters, and don't deliver the actual goods til payment is recieved in full. I also accept credit cards online through paypal, which makes it easier for folks to pay.

bigkidjr · #12 05-04-2005, 12:58 PM

p.s. Sandra -- have you tried having a heart-to-heart conversation with your friend? Maybe this is just a simple misunderstanding that can be cleared up with some open communication...

Sanda · #13 05-04-2005, 02:56 PM

Quote:

Originally Posted by bigkidjr

p.s. Sandra -- have you tried having a heart-to-heart conversation with your friend? Maybe this is just a simple misunderstanding that can be cleared up with some open communication...

No I decided to let it go, the business went bust and her husband is out of work so I didn't want to add to her misery. I just took it as a lesson to to be so trusing in future.