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When customers don't pay

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  • When customers don't pay

    Has anyone had trouble getting payment from a customer and what did you do?

  • #2
    When I had my business up and running, I would email a proposal (and a low-quality jpg version with PROPOSAL "stamped" on it) and state that the total cost to do the job entailed a deposit of half the total proposed. This effectively weeded out those who had no intention of paying, and even if it didn't, at least I'd have SOMETHING for my efforts. Hope this helps.


    • #3
      I'm with Phil on this one. I require a 50% deposit up front. The balance is due upon delivery of the finished work.

      Make sure you give them a receipt for the deposit, which also states the balance due and the approximate date the work will be finished. That way, if you need to, you can turn the account over to a collection agency because you'll have proof that they owe you a debt.

      With local people, it's easier because you don't give them the work until they've paid the balance. With customers by mail or internet, the collection agency thing will sometimes light a fire under them (make sure you warn them that you will turn the account over for collection before you actually do - collection agencies charge a % of whatever they recover and you can sometimes just get payment by "promising" to turn the account over to one).


      • #4
        jeez - I just typed this long post and lost it....

        I think what I was saying was that I have 3 or 4 customers significantly overdue in their payments. I have sent them notices, past due notices, etc. I called one of them and got the old "The Check is in the mail" BS. It is so frustrating, not only because I am really low on money, but that I put my heart and soul into this and talk so much with them throught the process, and even get really positive feedback, and then they just drop off the face of the earth. I can't believe how dishonest people are. I guess I just need to be more cut-throat.

        I am going to start taking credit cards and requiring that info before I send them anything. This is rediculous.

        In the meantime, does anyone have any recommendations on what else I can do to get my money from the previous clients? Can anyone recommend a collection agency. I am not going to just let this go. I am really disgusted.


        • #5
          What percentage does a debt collector charge in the US ? I've considerable experience in resolving overdue accounts but not much use in the US as legal procedures are probably completely different.


          • #6
            Hello Chiquitiita,

            Are you giving the customer the product before the final balance is due?

            Like the others said, get a 50% deposit,up front. Or a deposit to cover your cost end,at least. "If" their is money due on the order and the customer does not have the "product". Their is not much you can do to collect. Because, they don't have that product. Even though their is money due for your service. You might want to check into your "state" and "local" laws on that. To see "your rights". I'll tell you though. It's easier if your a freelancer(doing it on the side) than a business(store front) with those state and local laws.


            • #7
              If you make it a policy that you take 50% up front, couppled with a policy of only taking credit cards, then you could aliviate a non pay situation.

              The only two bad things about this is the percentage that is taken from your credit card merchant and the fact that a customer can dispute a charge.

              But to me, it is worth it as I have the money I earned in my account.


              • #8
                I understand what I need to do in the future, however, I need to know what I can do now - Yes the customer has their finished product.


                • #9
                  If they owe you a good amount, then you can take them to small claims court, or threaten to ruin their credit rating by selling your accounts receivable to a collections agency.


                  • #10
                    The thing that comes to my mind is. 1) Don't give the product to the customer,until the customer pays in full......... more so, if you work out of your home. I don't know how/where the transaction took place. But, the question I'm going to give you and something for you to think about is......See....I don't know, from your post, if your a storefront or you work out of your home. But either way. Was there any signed documents(signed document by that customer) that this work was done and/or be done at all? When you gave her/him the finished product, did you have he/she sign any paper work that states,he/she is to owe this money? This person, can now turn around and say they have paid you.....If their is no signed paper work and no paper work kept on this transaction.... BTW, I'm not saying you did wrong. I feel that was nice of you to do that. But,next time do a layaway. But make sure you keep,paper work and have them sign "ALL" transactions.


                    • #11
                      Yes, you are right - No they did not sign anything. I have emails communicating their requests but nothing to prove they didn't pay me.

                      I like to give people the benefit of the doubt - I hate being policed and not trusted myself, so I don't like to treat others that way - However, apparently the world is full of selfish, dishonest people. I worked very closely with much contact with a few of these people and was highly complimented on my work.

                      Sorry, I am really disgusted.

                      What exactly can I do to PROVE that someone has/hasn't paid me?


                      • #12
                        <<apparently the world is full of selfish, dishonest people. >> Yes, I know. What happen to the days(the old days) when most everything was done with ones' word and a handshake.That's what the oldtimers' would be saying. People knew the rewards for honoring it and the pitfalls if they didn't. I still know some oldtimers that do business that way. With a handshake and their word. Now, today its different. For showing faith in doing business with a liquor store owner where I make my purchases from all year round. At Christmas time, I just get a handshake and a calendar from em'.

                        << worked very closely with much contact with a few of these people >>

                        If you still work close to these people. Don't us terms that "threaten". Use words like "taking action" if anything. I prefer to use the term "lean on ya' ", like those old timers would say.

                        <<Sorry, I am really disgusted>>

                        Don't lose faith. It's no good to dwell on it. Blow it off. I know it easy for me to say it. It didn't happen to me. But it has happened in the past to me as well. Even with documents. But the money that was owed. It would not have been worth going through "legal" means for. To prove a point, yes. But,it would have cost me more in other respects, if I had gone through with it. That's something you have to look at also.

                        <<What exactly can I do to PROVE that someone has/hasn't paid me?>>

                        The "prove that someone has paid me". This doesn't have to be proved(doesn't matter). You would have received your money for it. And their would be no need for a confrontation.
                        The " prove that someone hasn't paid me".
                        Well, like my last post. Documention.

                        p.s One other thing. Even doing business with friends. Document the stuff. It's not being insulting to them. Its just showing good business practices to them.



                        • #13
                          Here, I don't know if this will help you out. It might make you feel better though.

                          It's about the law, medical and documention.

                          A lawyer was telling me one day, this story.

                          Where this man is in the ER. Is brought in as a patient. And their is a lot of things going in the ER. The ER Doctor could not find the man's documention on what has to be done to him. So, the patient says to him, ......this is right before he passes out. "My leg has to be amputated, doctor" . So the doctor goes ahead and amputates the leg. The doctor finds out after he amputates the leg. The documention states it was to be the left leg. Not the right leg. Now, right before he passed out ,the doctor did ask him, its your leg that has to be ampututed,RIGHT! And the patient, did say, "Right, Doctor"!
                          So the patient is brought back in the ER and the doctor amputates the right leg this time, which is.... The left leg.
                          Well after this mess, the poor man goes and sees' a lawyer. And he tells this story to the lawyer. The lawyer thought about taking on his case, but then told him ,even under the circumstances, their is no chance of your winning in this case. "WELL!!"The patient said, "How can my case "not hold up "in a court of law!" The lawyer replied: "My poor man, You don't have a leg to stand on!!!!"


                          • #14

                            I guess I am really a weird duck on this site cause I do things so much differently than other people, maybe I'm just not savvy business-wise.

                            I spent about 20 years in sales and although I don't make any claim to fame over that I do feel I learned something about human nature. In selling, one certainty is the customer needs to feel themselves that they have a need before they buy. In the case of restoration, need is a bit fuzzy, but desire is not fuzzy. Desire will surely become aroused when they see the restored version. Don't think though, that I just place it in their hands because I don't, but, I do let them see it and get the taste for te finished product. This arouses desire for the finished image, how could it not?

                            In my experience, I don't have much trouble at that point asking for the money. But once again, I am different than most.



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