Clients owing Money

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Shepahoy

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Hi,

I have a small services based business, Deliver files etc via email to clients.

I have a number of client as this stage but one in particular who will not pay there account, 4 invoices adding to to almost €2,000.

I'm not sure what to do at this stage as they agreed to estimates etc on email and initially agreed to pay but now I can't get hold of accounts person at all, same with actual project manager I dealt with in company.
Secretary either tells me they are in meeting, not in office and now has put me through to voicemails. not replying to emails either.

What are my options? & Thx
 
Nice initial letter- these are people who may just be leaving it on the long finger to pay and may give you future business.

If that doesn't work slightly stern second letter.

If that doesn't work either solicitors letter or debt collection firm.
 
Hi Vanilla,

Is that how it works? recovering money.

I have asked in various emails why they are not paying account and no response. Will solicitors letter get me anywhere, also I believe debt collection agencies won't work for less than a certain amount! more than 2k I think...
 
Whether a solicitors letter will work or not is a difficult one to guess. It really depends on the recipient. If it will work at all it will work quickly. There are some hardened debtors out there that won't pay until it gets to the commital stage in the debt collection process.
 
Start charging them interest (legally you can do this) & as contempory suggests door step them and invoice them for your time/expenses too.
 
Wee_one said:
Start charging them interest (legally you can do this) & as contempory suggests door step them and invoice them for your time/expenses too.
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I posted here recently - see http://www.askaboutmoney.com/showthread.php?t=20059

Basically, I was looking for anyone with experience of actually doing this (my wife's in a similar position to the post above).

What are people's thoughts on the idea of charging interest? has anyone actually done it? how did you get on?
 
Perhaps give them a deadline when you'll start charging interest, and when you'll pass it on to a debt collection.
 
we are in the same position as you and what we have started to do which is a bit of a pain but it has improved things abit.

Month 1 send out invoice as soon as the work is done with the terms of payment on it. End of Month send out statement.

Month 2 send out statement.

Month 3 week 1 follow up phone call, depending on what was said, if payment not received another phone call at end of month. Send out reminder letter with statement.

Month 4 week 1 follow up phone call, depending on what was said,if payment not received another phone call at the end of month. Send out firmer letter with statement.

Month 5 week 1 follow up phone call, depending on what was said, if payment not received we send out a mid month statement with a letter saying if payment not received in 7 days we forward the matter to solicitors.

If not paid we forward the matter to our solrs. in most case we get paid when the client receives solrs letter and they have to pay extra costs.

Its a messy process and can play havioc with cashflow but its the only way we can think of doing it.

By making the phonecalls you will find out if he has problems with your work or just doesn't want to pay you. We document all the calls and what was said because the more we have the better our case is when solicitor gets invlolved. Would love to know how other people handle the matter.
 
Think you are handling it very well Homer- maybe a little too patient if it causes you cashflow problems though.

In relation to interest you would have to set out at the outset when giving quote or terms and conditions that if unpaid within a month interest will be charged and state what the rate will be. You can't unilaterally charge interest without having informed them before a contract was made.
 
Ive found to my detriment over the years that the further away (in the country) a client was, the more lattitude they took with payment, knowing full well you are unlikely to arrive at his doorstep. In almost all cases they had the money, but leave say Dublin based suppliers last in payment cycle.
Take the bull by the horns. The quickest way as assessing this is to arrive un-announced and look for the money. Be prepared to wait in reception until he 'comes back' even if he is 'out' at the moment. Chat to any other customers that come into reception - makes the debtors nervous this! Be polite at all times but let them see you are serious. Going down the legal route takes ages and you might never get paid this way.
If they are in financial trouble, you will probably gets some clues while ure there, incoming phone calls etc.
Just my experience...that all.
 
Vanilla said:
Think you are handling it very well Homer- maybe a little too patient if it causes you cashflow problems though.

In relation to interest you would have to set out at the outset when giving quote or terms and conditions that if unpaid within a month interest will be charged and state what the rate will be. You can't unilaterally charge interest without having informed them before a contract was made.
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That's not entirely correct - see http://www.entemp.ie/enterprise/smes/latepay.htm

What I'm thinking of doing:

1. After usual reminders and phone calls once the invoice is overdue, over say two months from the original payment date - anyway, at the end of 60 days overdue (i.e. 90 days from original invoice, assuming 30 days payment terms)...
2. Inform them that unless full payment is received within 7 days, interest will be charged according to the late payment schedule (see link above)
3. If at the end of the 7 days no payments are forthcoming, send a new invoice with the interest for the overdue payment, with payment terms of 7 days and notification that invoices will be sent weekly for the additional interest every 7 days with the same terms.
4. If after another 30 days of this, no payment is received, then inform them legal action will be taken to recover the sums due.

Now, there's nothing stopping anyone doing this, but has anyone actually tried this approach?

I'd imagine it wouldn't do too much for customer relations, but then you're probably best off without customers like that anyway.
 
Just to give progress report on my problem, found an old email with the finance womans direct line on it :) called a few times today kept going to voicemail, but just got through to her, she was shocked that I got her. She said I'd get a cheque out by next week! We'll see how it goes!
 
I would go to doorstep if no phone contact possible.
charging interest is a joke imho. You need payment now and not the admin hassle of managing a signnificant accounts receivable.
Unless you personally act proactively I think the chances of debt recovery will decrease.
 
markowitzman said:
I would go to doorstep if no phone contact possible.
charging interest is a joke imho. You need payment now and not the admin hassle of managing a signnificant accounts receivable.
Unless you personally act proactively I think the chances of debt recovery will decrease.
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I take your point about the admin hassle: the interest idea is to try and spur them into action after all usual follow-up methods have been done (daily phone calls etc.), without going to the expense of the legal route.

I'd definitely agree you have to be very proactive, by the way. If you're not, you just slip to the bottom of the pile. One of the few areas where shouting loudest actually does get results, in my experience.
 
Vanilla said:
Whether a solicitors letter will work or not is a difficult one to guess. It really depends on the recipient. If it will work at all it will work quickly. There are some hardened debtors out there that won't pay until it gets to the commital stage in the debt collection process.
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Even at the commital stage they can weasle out of paying by claiming they can't pay. No judge will send a debtor to jail if he can't pay. Debtor on social welfare, the judge will tell you to stop wasting the courts time.

The Daz doorstep challenge can cause more you more trouble as the debtor can simply tell you to get lost and if you don't you leave yourself open to a civil action for trespass and possible public order offences if the debtor was so inclined.

Also persistant phone calls can also land you in trouble also. If the guy says "don't call me again, I'll see you in court" you can't call him again. If you continue you may have the Gardaí after you for harrassment. http://www.irishstatutebook.ie/1997/en/act/pub/0026/sec0011.html#zza26y1997s11
 
bond-007 said:
Even at the commital stage they can weasle out of paying by claiming they can't pay. No judge will send a debtor to jail if he can't pay. Debtor on social welfare, the judge will tell you to stop wasting the courts time.

The Daz doorstep challenge can cause more you more trouble as the debtor can simply tell you to get lost and if you don't you leave yourself open to a civil action for trespass and possible public order offences if the debtor was so inclined.

Also persistant phone calls can also land you in trouble also. If the guy says "don't call me again, I'll see you in court" you can't call him again. If you continue you may have the Gardaí after you for harrassment. http://www.irishstatutebook.ie/1997/en/act/pub/0026/sec0011.html#zza26y1997s11
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That's probably all true for a personal debt, but the OP and our situation are with trade debts.

Plenty of legal options, I believe. You could for example threated to take proceedings to wind them up due to inability to pay (if they're not disputing the invoice). My last company did that on one occasion: we had payment within a week.

However, going the legal route is expensive: at least with charging interest you're getting more in rather than less. I'm just not sure it's the way to go though.
 
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