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  1. #1
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    Big Client Doesn't Want to Pay..?

    Hi

    I have a project that is now complete. It had a contract, a recorded change of scope and finally a client sign-off (all of this is on paper, signatures, dates and all).

    Payment terms were NET 30, needless to say that time has passed and the remuneration has not surfaced. I am a small business owner, my client is a FORTUNE 500 behemoth.

    In a nutshell the project was to convert an Excel based quoting tool (for their sales team) into an online version. It was quite an application, plenty of size, complex math. The conversion was made, and while the system sat on our servers the client was more than happy with the result.

    Once they signed off (so I could release the code) a patch of no communication followed by, a week later an e-mail that admitted that they might not use the application we built for them after all -the reason. It was to complicated (there in-house team I do not currently believe have the level of expertise to modify the system).

    The insinuation being (without going into the details and giving the companies identity away), that a system the could not use for ongoing development should not need to be paid for (or fully paid for).

    I've already sent the reminder on the late payment inc., pointing out the agreed late payment penalty clause from the contract i.e., 5% for every 28 days in excess of the due date -I want to make sure there is no claim of a hidden gotcha if this deal goes another 28 days+.

    I've been lucky and not had this with a client before, so I'd be interested in any opinions on next steps.

  2. #2
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    I'm not hearing the part where they actually don't want to pay. Are they actually late on the payment yet?

  3. #3
    SitePoint Guru Ruben K.'s Avatar
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    Quote Originally Posted by Sagewing View Post
    I'm not hearing the part where they actually don't want to pay. Are they actually late on the payment yet?
    The insinuation being (without going into the details and giving the companies identity away), that a system the could not use for ongoing development should not need to be paid for (or fully paid for).
    I think it's pretty clear

  4. #4
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    Sounds like you have it all covered from a paperwork perspective. You did the work to the agreed spec, the client liked it enough to sign off, therefore you should get paid. Hence if the client doesn't suddenly doesn't want the app, it's just tough and they need to cough up.

    Keep it civil, send them notices by registered letter, give them ample time to pay and if they continue to refuse, take them to small claims, or if the amount owed is too high for small claims, go see a lawyer. It would be great if you can get them to confirm in writing the exact reason why they don't feel like paying.

    As with all these things, try to work it out without the need for legal proceedings. If your contact at the company isn't budging, you might want to consider moving up the ladder to his superior.

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    Are you sure the client payment terms are 30 day; this could be up to 90. Its not uncommon for a point of contact and the actual purchasing/finance departments to have different view on this. It’s worth double checking before going in head first with the "where is my money".

    Si

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    Quote Originally Posted by si@ld View Post
    Are you sure the client payment terms are 30 day; this could be up to 90. Its not uncommon for a point of contact and the actual purchasing/finance departments to have different view on this. Itís worth double checking before going in head first with the "where is my money".

    Si
    Yes, this is defintely quite a common occurance. Your guy at the company signs your contract with its 'Strictly NET 30' clause, but his accounts department haven't got a clue about those agreed payment terms and basically pay for the invoice under their own company's recognised terms. I usually reinforce the nuts and bolts of the payment terms on the invoice itself (e.g. 'Terms: Strictly 30 days'), but find with larger companies this is generally ignored. Accounts departments do however respond very quickly to a phone call informing them they are going to get a late payment fee.

    But in this case, it sounds like your invoice may not have even made it to the accounts department yet. Find out exactly what is going on first, then take it from there.

  7. #7
    I hate Spammers mobyme's Avatar
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    Put your mind at rest; get in contact with the person who signed off the project and express surprise that you still haven't received payment. This is the best man to have on your side because his professionalism is bought into question (there couldn't have been anything wrong, otherwise he wouldn't have signed it off) It will probably turn out to be a glitch in the accounts dept which hopefully he will help you get sorted.
    There are three kinds of men:
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    The few who learn by observation.
    The rest of us have to pee on the electric fence.

  8. #8
    King of Paralysis by Analysis bronze trophy
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    Quote Originally Posted by Ruben K. View Post
    I think it's pretty clear
    An insuination is never clear, that's why it's an insinuation.

    Anyway, OP you're going to get paid, they signed off on the work you provided. You just need to realize that larger companies are often slower to issue cheques and the such than smaller ones.

  9. #9
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    Quote Originally Posted by Ruben K. View Post
    I think it's pretty clear
    It doesn't sound so clear to me. I agree with the other posters - these big companies take a while to pay, but they rarely just 'back' out of a bill by 'insinuating' that it shouldn't be paid. If the paperwork is intact, it will probably work out fine.

  10. #10
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    Thanks for all the great feedback -I do indeed feel a little better for the positivity here.

    If there are more developments I'll post it, and see what the community thinks.

    Thanks again!

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    SitePoint Guru hifigrafix's Avatar
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    Honestly big companies are the worst as far as payment goes. My parent company wrote off $70,000 worth of unpaid debt last year much of which was from large companies that hold the smaller checks until they accrue a larger sum to pay out .

    I can only say that you need to MAKE SURE that you are talking to the appropriate party. An I.T. guy or project manager is probably not whom you need to speak to. Call the accounts payable department and let them know what's going on. The scenario could be that a project manager managed the project poorly and is trying to sweep you under the rug so they don't get in trouble.

  12. #12
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    My experience is the reverse. Big companies can take a long, long time to pay but they rarely screw you on the bill. I had an expenses payment from a Fortune 50 company that I just finally received after 6 months, but I never worried that they wouldn't pay.

    Even if you sign a Net 30, you'll frequently get paid in 60 or 90 days - that's how many of these companies work. But, once you get used to that they are very reliable.

    Quote Originally Posted by hifigrafix View Post
    Honestly big companies are the worst as far as payment goes. My parent company wrote off $70,000 worth of unpaid debt last year much of which was from large companies that hold the smaller checks until they accrue a larger sum to pay out .
    What does that even mean to 'write off' 70k of debt? They took a deduction as bad debt because the large companies didn't pay them? That seems unlikely - the smaller the debt, the LESS likely a big company is to avoid paying it since they'll spend more fighting the fees than avoiding them.

  13. #13
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    I took my car once to an airbrush artist. I asked him to spray on some designs and I told him exactly what I wanted.

    He sprayed on a beautiful design and it took him about 80 hours to complete the job. When I finally saw it, I thought the design was way too complicated. I argued that he made the car look too good and I would get robbed on the street. So I told him I wasn't going to pay for it because I planned on parking it in my garage forever and covering up the paintjob.

    Doesn't make sense, does it? Tell them to pay up. Work is work.

  14. #14
    SitePoint Enthusiast raopraveen's Avatar
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    yea, once i remember that a company named hikesport has offered me the seo project but when it was completed they ditched me! our deal was finalized for $800 but they paid only $600. so it was my first and last experience ever i have after that i started my own projects and earning more than $1000 per month!

  15. #15
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    yea...maybe you should just wait for a bit cause the payment might just be late...

  16. #16
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    As someone whose worked for several "big companies" I can tell you, it doesn't matter what my terms are, I put an invoice in and AP pays it out just as soon as they process it, verify it and have a check run. If I'm on the ball (and not busy enough to have much else to do) this may make everything work within a net 30 claim but generally it takes a couple of weeks to get the bill paid beyond when it goes into the bucket, even longer for a new vendor. I don't see much in your post about what is/ is not happening on the communication front -- why not ping your contact and ask them if the bill has been submitted to AP or where it stands in general? If it's not in queue you have an issue, if it is, give it a little while longer.
    - Ted S

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    SitePoint Wizard silver trophy
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    What does that even mean to 'write off' 70k of debt? They took a deduction as bad debt because the large companies didn't pay them? That seems unlikely - the smaller the debt, the LESS likely a big company is to avoid paying it since they'll spend more fighting the fees than avoiding them.
    I'd suspect they took a write-off for audit purposes. If you're a large and audited company you have to have your books equal out when the year ends... if there's outstanding invoices they get written down if they can't be collected. Of course when they come in a few weeks/ months later they show up as revenue, it's just a matter of what year they hit the books.
    - Ted S


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