Dealing with clients you know don't pay properly?

[Tigris]

How do you guys deal with clients calling you that you know don't pay/cause issues when invoices are sent?

You hear things such as "quite often closes ltd companies to get out of paying", "absolute nightmare to get any sort of payment from". This particular client/business are known for it in the area.

Also I did actually quote the client a few years back. Mentioned once the deposit has been paid I will order in the parts and do the work, surprise surprise I had no deposit paid. The client has since been calling me to do more work but it's not worth the hassle chasing the invoice for months potentially years IF paying at all.

The client has actually fallen out with another company in the area doing the same service when it came to paying the invoice.

In the past I have actually said it's going to be a few months until I can come over.

 

[Mark T Jones]

Payment in advance, or a significant deposit plus PGs.

 

[Annoying Donkey]

Or simply don't do business with them...

 

[Tigris]

Or simply don't do business with them...

To be honest I don't want the agro.

 

[MikeJ]

Or simply don't do business with them...

^^This

Once you factor in the risk of not getting paid and the time you spend chasing a debt, it's not worth the hassle. Tell them why you won't deal with them too.

 

[Newchodge]

To be honest I don't want the agro.

Then just say no. Not that you're too busy, just that you're not interested.

 

[Paul Kelly ICHYB]

1 - prepayment
2 - big deposit
3 - don't deal with them

 

[Frank the Insurance guy]

Payment in advance is pretty much the only way.

 

[SillyBill]

No deposit paid in the past, disappeared? Suprised this isn't cut dead immediately by yourself, time is too valuable, chancers don't change.

 

[Paul Carmen]

Exactly as stated on here, be straight up; e.g. your reputation is that of a non payer, we quoted & planned work with you in the past, you never paid the deposit etc.

The only way we will work with you is 100% payment upfront, including a call out charge/charge for any work to quote, otherwise we are not interested in your business.

I'd also ensure you quote on the high side too, to deal with the annoyance/time wasting factor of this type of client.

 

[Tigris]

Thanks everyone.

It's knowing if to say "currently to busy to take on anymore work" and keep it sweet and simple or say it how it is. I know they won't pay if there's a premium after speaking to a company who offer the same service as me a few months ago. They actually did them a deal as they were using older equipment and the invoice was questioned then.

 

[Newchodge]

Thanks everyone.

It's knowing if to say "currently to busy to take on anymore work" and keep it sweet and simple or say it how it is. I know they won't pay if there's a premium after speaking to a company who offer the same service as me a few months ago. They actually did them a deal as they were using older equipment and the invoice was questioned then.

Don't lie. Why should you lie to make a fraudster feel better about themselves?

 

[Paulzx]

How do you guys deal with clients calling you that you know don't pay/cause issues when invoices are sent?

You hear things such as "quite often closes ltd companies to get out of paying", "absolute nightmare to get any sort of payment from". This particular client/business are known for it in the area.

Also I did actually quote the client a few years back. Mentioned once the deposit has been paid I will order in the parts and do the work, surprise surprise I had no deposit paid. The client has since been calling me to do more work but it's not worth the hassle chasing the invoice for months potentially years IF paying at all.

The client has actually fallen out with another company in the area doing the same service when it came to paying the invoice.

In the past I have actually said it's going to be a few months until I can come over.

I always produce a pro forma or payment request of some type. If they pay, all good and no issues. If they don't, you just don't do the work, and you know they were going to mess you around.

We have a credit checking platform, and I only give credit accounts these days to really trusted customers, they rest pay at the point or ordering, as you would expect to do had you bought goods online. Not only does that iron out difficult payers, it improves your cash flow no end.

 

[Gecko001]

It appears that it is not the late payments that you are primarily worried about, but the way they contact their business in general based on rumours. If that is the case, I understand that you need to tread carefully as the rumours that you have heard about the firm cannot be repeated. So coming up with a credable reason for ceasing to do business with them is going to be a problem. Play it with a "straight bat". Even though they might not be the only late payer you have, I would stick to the late payer line as the reason for you not wanting to do further business with them. You could tell them that you are fed up with being a bank for clients, but make it short.

 

[Paul Carmen]

It's knowing if to say "currently to busy to take on anymore work" and keep it sweet and simple or say it how it is. I know they won't pay if there's a premium after speaking to a company who offer the same service as me a few months ago. They actually did them a deal as they were using older equipment and the invoice was questioned then.

We get this occasionally, and price is always something I cover off early in the process, long before we produce a full quote or proposal; e.g. our rough pricing is XYZ, we don't offer discounts and the price is the price.

We had a customer tell us we should revise our pricing recently, as we'd get much more business if we were significantly cheaper. They then asked if we'd be ready to start their project next week!

Our lead times to start are 3-6 weeks depending on the type of work. I explained that the cheap people had no work, that is why they could start within a week, they had no work because they aren't very good. We had no interest in lowering prices and we did not want to be busy fools. Suffice to say it wasn't a client we wanted to work with...

Your industry may not be the same, but say you "offer a premium service for a good price, and that your due diligence checks mean you'd require payment upfront to proceed with them as a customer".

They are not working with the other 'cheap' company because they they are a problem customer. If they can get another fool to sell their services for a pittance to troublemaker you're rid of them, if they can't then you might get the work, paid upfront at decent rate.

 

[Tigris]

It appears that it is not the late payments that you are primarily worried about, but the way they contact their business in general based on rumours. If that is the case, I understand that you need to tread carefully as the rumours that you have heard about the firm cannot be repeated. So coming up with a credable reason for ceasing to do business with them is going to be a problem. Play it with a "straight bat". Even though they might not be the only late payer you have, I would stick to the late payer line as the reason for you not wanting to do further business with them. You could tell them that you are fed up with being a bank for clients, but make it short.

Family know the owner as well. I've also quoted for work in the past and mentioned a 50% deposit is to be paid upfront to cover physical items. No deposit was ever received but the owner was keen for me to do the install the following week after quoting.

 

[Gecko001]

Ah family! That is different. Cannot take them to court unless you are the type that would sell their granny into slavery. I once worked for a small firm where the owner of the firm, only did work for a family member or a friend when he could make sure that he was not handling the job himself. I was a sole practioner so I could not depersonalise it in that way. One definite way of not getting work from them again is to do the work and not send them a bill, but that depends on the amount. If it is more than a couple of hundred pounds, then it would be an expensive getting them out of your hair.

 

[Tigris]

Ah family! That is different. Cannot take them to court unless you are the type that would sell their granny into slavery. I once worked for a small firm where the owner of the firm, only did work for a family member or a friend when he could make sure that he was not handling the job himself. I was a sole practioner so I could not depersonalise it in that way. One definite way of not getting work from them again is to do the work and not send them a bill, but that depends on the amount. If it is more than a couple of hundred pounds, then it would be an expensive getting them out of your hair.

My relatives know what the owner is like. I'm not family or related Also spoke to another business in the area and the reason he came to me is he fell out with his other provider.

Also proved themselve to me as well when know deposit was paid on some "urgent" work

 

[JEREMY HAWKE]

Tell the truth " Your a feckin nightmare"

 

[Gecko001]

My relatives know what the owner is like. I'm not family or related Also spoke to another business in the area and the reason he came to me is he fell out with his other provider.

Also proved themselve to me as well when know deposit was paid on some "urgent" work

If he fell out with a compititor and comes to you, that does not mean that sees you as better provider than this competitor that he fell out with, but that he sees you as someone he can treat as badly. People like this do the rounds of suppliers and treat them all exactly the same - if the can get away with it!

 

[DontAsk]

Tell him you are too busy and recommend the other provider and see what his reply is.

 

[Chris Ashdown]

Full payment with order. full stop

 

[greyster]

It's tough dealing with known late payers. Here's a two-pronged approach:

1. Prevention: Clear payment terms upfront! Require deposits for large projects. Offer a discount for early payments.
2. Action: For existing clients, friendly reminders can work. If ignored, consider stopping work until payment arrives. In worst cases, involve a collection agency or lawyer (last resort).