Reply to: Working with a client who's not paid suppliers in the past

[Andy Hallett]

The amount of credit you should extend is the amount you're willing to lose.

Could probably close the thread after this point.

Shorter payment terms, upfront payment (% or full) or Escrow are your options.

[redgiant]

Another way that I was investigating with a poorly paying client earlier this year was to be a card merchant and to charge the clientco's corporate credit card following an approved timesheet & expenses. That way you would be paid that day or the following day depending on when the transaction is made. This is common in certain industries (namely in the creative sector) at least here in the US to pay suppliers and contractors this way. Be aware that card companies will charge a merchant fee (2-3%) for each transaction which I would have included in the daily rate.

[TheFaQQer]

Check the small print on IPSE insurance

Terms and conditions can be found here.

[Lewis]

Thanks.

Not an IPSE member, but have been looking at Standard membership. Had a quick look again, and can see IPSE+ would be better if I ran into problems with this client.

The project would start with me doing 2 full days of work, before settling into a few hours a month. As you suggest, weekly invoicing sounds more reasonable for those few hours, but bit concerned I'd do the 2 days work and not see the money.

Check the small print on IPSE insurance, I had a client go bust owing me many thousands and I was not covered; can't remember specifics off the top of my head. Same situation, it was a company that had risen from the ashes a few times following insolvencies, so I was half expecting it.

[billybiro]

You feel like you'd be letting her down if you backed out now? Wait until she doesn't pay you. Maybe she screws suppliers over because they feel bad about letting her down rather than using common and business sense...

By golly, NLUK, you're a man of many faces.

Careful now, soon you'll be telling the OP to take the gig and get ready to bail on her client as soon as even the whiff of a rate increase blows by! In the name of common business sense and fiduciary duty, of course!

[TheFaQQer]

If it was me, I'd be asking for the payment up front for the first two days and weekly invoicing with 7 day terms for the 'few hours a month'.

Even seven days may be pushing it - payment on receipt wouldn't be unreasonable here.

[SeanT]

50/50 on the whole lot like other industries do all the time.

[ladymuck]

The amount of credit you should extend is the amount you're willing to lose.

It's not letting someone down. It's business and she has form that makes her untrustworthy.

When being wound up, was there a list of creditors published? If so, I would have a look and see if they are big corps or small businesses and maybe contact one or two to ask how she handled things.

[doconline]

If you are delivering a project for a fixed cost (e.g. a website) then agree milestones with payments attached. 25% deposit then split the remaining between the milestones and don't deliver the next milestone until previous payment has cleared.

[SaraDigital]

Thanks for the comments all.

If it was me, I'd be asking for the payment up front for the first two days and weekly invoicing with 7 day terms for the 'few hours a month'.

Yes, I think this is the route I'll go down, and with her past history she can't blame me. If she says no, that's fine. I'm happy to walk away.

You feel like you'd be letting her down if you backed out now? Wait until she doesn't pay you. Maybe she screws suppliers over because they feel bad about letting her down rather than using common and business sense...

I'd feel like I was letting her down, but ultimately I care more about my money than her go live date.

[northernladuk]

You feel like you'd be letting her down if you backed out now? Wait until she doesn't pay you. Maybe she screws suppliers over because they feel bad about letting her down rather than using common and business sense...

[TestMangler]

Thanks.

Not an IPSE member, but have been looking at Standard membership. Had a quick look again, and can see IPSE+ would be better if I ran into problems with this client.

The project would start with me doing 2 full days of work, before settling into a few hours a month. As you suggest, weekly invoicing sounds more reasonable for those few hours, but bit concerned I'd do the 2 days work and not see the money.

Seriously, I know the majority of B.O.S. contractors are not particularly sensible or able when it comes to non-agency type work, but would you seriously entrust even an hour of your time to someone with such a poor credit history ?

If it was me, I'd be asking for the payment up front for the first two days and weekly invoicing with 7 day terms for the 'few hours a month'. (And before the 'experts' jump in and say you can't, you can. You can demand any terms you want. Their acceptance might be a different matter and if they don't be prepared to walk away). I did a load of work for a dodgy timeshare company in Newcastle years ago and the first 5 days, including travel and hotels, was paid in advance. Over the months, a little more trust was established, before they disappeared without trace, but at least I wasn't among the ones left owed money.

[northernladyuk]

Payment in advance each month. I walked away from a good opportunity for similar reasons a few years ago.

Or a personal guarantee.

[SaraDigital]

Go for weekly invoicing with immediate payment terms. Put that into the contract as your Ts&Cs. If she challenges then quote the payment history as a reason to not change.
Full payment up-front may be asking a bit much.
But you're right not to trust. Do you have IPSE+ membership?

Thanks.

Not an IPSE member, but have been looking at Standard membership. Had a quick look again, and can see IPSE+ would be better if I ran into problems with this client.

The project would start with me doing 2 full days of work, before settling into a few hours a month. As you suggest, weekly invoicing sounds more reasonable for those few hours, but bit concerned I'd do the 2 days work and not see the money.

[Lance]

I've recently been approached to do some work for a small business. It's something that, with a bit of juggling on my side, I could fit in around my normal 9-5 contract.

I've just done some research (should have done it earlier), and have seen that the lady who runs the business (incorporated this January) had a previous similar company that was forced into insolvency last year after it was taken to court by a creditor. She also has another (similar) business that had compulsory strike-off action started against it earlier this year.

We've chatted a few times over the last few weeks and I've prepared a proposal, which she was happy with. I know I shouldn't, but I feel I'd be "letting her down" if I backed out now as we're getting close to her go live date.

We're getting to contract and schedule of work stage, and she's talking about booking travel and hotels for me for the first part of the project. Should I back out? Go ahead, but insist on full payment upfront?

Thanks

Go for weekly invoicing with immediate payment terms. Put that into the contract as your Ts&Cs. If she challenges then quote the payment history as a reason to not change.
Full payment up-front may be asking a bit much.
But you're right not to trust. Do you have IPSE+ membership?