Slow and late payers

[RichardFT]

Its not looking great at the moment for the business, it would seem that we are caught between, getting new customers on board or doing the actual work. It a fine balancing act which makes it very hard to push forward.

What really irritates me are the late payers. You do the work as agreed, and people can drag their feet over paying the bill. And to cap it off, so folk just refuse to pay because they feel we have not done the work.

We have been to the small claims court once, that was interesting. We had a dramatic reduction in the amount but felt getting something out of this guy was better than nothing.

Are we the only SEO company to suffer with bad paying customers?

 

[StevePoster]

There are some companies also experienced your scenario and I think you client is expecting beyond your agreement.

 

[Annoying Donkey]

What really irritates me are the late payers. You do the work as agreed, and people can drag their feet over paying the bill. And to cap it off, so folk just refuse to pay because they feel we have not done the work.

You need to have a clearly defined and agreed means of measurement so there's no doubt that the work has been done. Furthermore, it should be in terms of client benefit. There's no perceived benefit in number of links or even ranking for a business owner. They're interested in more customers, more sales, more profit, business growth. Give them that, and they'll happily pay.

It also helps to be selective in who you work for...

 

[HazelC]

I worked for an SEO company before and they took payment in advance, months payment was taken before work started and if payment had not been made for the next month only 2weeks work was done to give them time to pay.

I write SEO friendly content for clients (slightly similar to what you do), I charge at the end of the month for the work done in the month, payment is due in 14 days or I stop work.

The invoice is sent out by my accounts lady on 1st of month, and clients are informed payment is due within 14days or a late payment fee of 10% will be added, a 'gentle nudge' is sent on 7th of month and then another 'stronger gentle nudge' is sent on the day reminding client payment is due by 5pm that day or the late fee will be added.

If payment is not received by 9am the next day an email is sent to the client chasing and giving them one week to pay (including the 10%) before it is passed to a collections agency (I use My Client Controllers) who then chase the payment on my behalf. If they collect the payment they charge me 10%, if not they don't get paid.

That works for me - hope it helps you?

 

[RichardFT]

Thanks guys, we have agreements in place for payment but it is grossly abused. I think Hazel you have a better model, I will suggest to Keith that we take a look at adopting it.

When we went to court it became clear that the client had spoken with another SEO agency and was told the work we had done was a waste of time and not worth a penny. It is hard to quantify the amount of work done and when a client refuses to accept results it does get ugly.

I would love a register of bad clients, late payers and non payers for that matter. I can not help but think anyone connected with SEO work will have come across them. Or are we just dealing with the dregs?

Some companies that we deal with are good payers and nice to work with. It is the minority that spoil it, like anything in life I guess.

~Thanks again

 

[smallclaimsassistance]

The invoice is sent out by my accounts lady on 1st of month, and clients are informed payment is due within 14days or a late payment fee of 10% will be added, a 'gentle nudge' is sent on 7th of month and then another 'stronger gentle nudge' is sent on the day reminding client payment is due by 5pm that day or the late fee will be added.

If payment is not received by 9am the next day an email is sent to the client chasing and giving them one week to pay (including the 10%) before it is passed to a collections agency (I use My Client Controllers) who then chase the payment on my behalf. If they collect the payment they charge me 10%, if not they don't get paid.

That works for me - hope it helps you?

Great model.

 

[Ad Republic]

I worked for an SEO company before and they took payment in advance, months payment was taken before work started and if payment had not been made for the next month only 2weeks work was done to give them time to pay.

I write SEO friendly content for clients (slightly similar to what you do), I charge at the end of the month for the work done in the month, payment is due in 14 days or I stop work.

The invoice is sent out by my accounts lady on 1st of month, and clients are informed payment is due within 14days or a late payment fee of 10% will be added, a 'gentle nudge' is sent on 7th of month and then another 'stronger gentle nudge' is sent on the day reminding client payment is due by 5pm that day or the late fee will be added.

If payment is not received by 9am the next day an email is sent to the client chasing and giving them one week to pay (including the 10%) before it is passed to a collections agency (I use My Client Controllers) who then chase the payment on my behalf. If they collect the payment they charge me 10%, if not they don't get paid.

That works for me - hope it helps you?

Yeah, I also really like this model.

 

[JamesMason67]

Can I please ask how the client knows how much work has been done? Is there something visible that the client, or in this particular case a judge can see?

On another note, any seo firms I've engaged always got paid monthly up front. I assumed that was the industry normal practice. I would suggest to you that would be your best bet.

 

[Mr Demeda]

I worked for an SEO company before and they took payment in advance, months payment was taken before work started and if payment had not been made for the next month only 2weeks work was done to give them time to pay.

I write SEO friendly content for clients (slightly similar to what you do), I charge at the end of the month for the work done in the month, payment is due in 14 days or I stop work.

The invoice is sent out by my accounts lady on 1st of month, and clients are informed payment is due within 14days or a late payment fee of 10% will be added, a 'gentle nudge' is sent on 7th of month and then another 'stronger gentle nudge' is sent on the day reminding client payment is due by 5pm that day or the late fee will be added.

If payment is not received by 9am the next day an email is sent to the client chasing and giving them one week to pay (including the 10%) before it is passed to a collections agency (I use My Client Controllers) who then chase the payment on my behalf. If they collect the payment they charge me 10%, if not they don't get paid.

That works for me - hope it helps you?

That's a nice little system Hazel!

 

[Codefixer]

Not just an SEO problem. Here's some things I've learnt along the way.

• Make it clear initially your payments terms and dates. Try and get payment upfront, or staged or whatever reduces your risk and works also for the client.
  
• Have a system in place, follow up email reminders, calls.
• Agree with the client on the deliverables.
• Record your work.
• Keep clients in the loop of work and progress.
• Cut your losses when needed.
• Learn to spot poor clients.
• Don't build up a backlog of oustanding payments.

 

[RedEvo]

I'm not a fan of upfront payments and we never ask for them. We do however imvoice on 30 days terms when we START the work. That way the money's due once the first months work is done. If by the middle of the month we've burned the budget we'll invoice again, on 30 days terms.

We used to do the work then bill on 30 days. Avoid doing this.

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[james_firmsites]

Have you considered using something like gocardless? You can set a customer up on a directdebit plan for just a nominal fee, say £1 per year, then you have a pre-authorisation to bill upto £5k monthly.

No more late payers, just make it clear when you will be collecting the money, then bill from your end, if they don't like the idea of you being able to collect the money on time then that might be cause for alarm. Not sure if there are alternatives on similar lines (you might have to google that!) but we use them for our clients and at a flat 1% fee they are really good!

 

[Ian J]

Its not looking great at the moment for the business, it would seem that we are caught between, getting new customers on board or doing the actual work. It a fine balancing act which makes it very hard to push forward.

What really irritates me are the late payers. You do the work as agreed, and people can drag their feet over paying the bill.

The sort of payment terms that you can insist on depend on the size of your client. If you are dealing with small companies you can try asking for payment in advance or within a very tight credit period but if you are dealing with larger concerns it will be impossible to get them to pay in advance as they aren't geared up to it and anyway they will take the attitude why should they unless you are offering something that they can't get anywhere else.

 

[CWT2k1]

We charge everyone upfront, or the vast majority upfront atleast. We also believe that SEO is not a magic bullet and that it takes time, so we only do assignments of greater than 6 months.

 

[Rich Best]

Payment upfront is the best way to work unless you have cash in bank.

Also be very transparent about results and manage expectations. I now focus on PPC Management, but in the past managed a number of SEO campaigns. I often spoke to prospects who just had unrealistic expectations from the start. "Will I be number 1 in Google next week then?". Make sure you manage expectations, make it really very very clear and transparent in your communications and agreement / contract what you will do for them and why, and make it very clear that you are not guaranteeing results and that Google can change algorithm's at any time.

The difficulty about SEO is a) getting people / businesses to understand that Google make the decisions, there is no 'magic' involved and b) you will perform skilled work but cannot guarantee results.

To some extent the same is true with any marketing activity - you can never guarantee a specific result. With PPC management I can model out campaigns and make predictions based on industry averages. But can I guarantee a specific result? No! What I can guarantee is that I am better than most at what I do, and will go the extra mile.

I think every small business has problems with slow payers. And I think the best advice is to always get an agreement signed. Make sure your agreement is legally binding, clear / transparent and fair. Then if you are having trouble, don't waste time just employ a debt collection agency.

There are businesses out there that are run by people who are bad payers. Fullstop. It is nothing personal, these people will simply try it on. Never rely on getting paid until it is in the bank. Always be seeking new customers. Never stand still. Some of my biggest losses have come from what seemed like the best deals!

 

[InFront Digital]

This is a problem in business in general, and today there is a greater need to achieve and produce results.
I guess you just need to be happy that you have given 100% your best effort and that should at least keep your own conscious clear.

Gentle reminders are helpful initially, and offer to discuss what the company is not happy with, which gives you a chance to put it right and closes down the "poor work" avenue.

 

[HazelC]

I worked for an SEO company before and they took payment in advance, months payment was taken before work started and if payment had not been made for the next month only 2weeks work was done to give them time to pay.

I write SEO friendly content for clients (slightly similar to what you do), I charge at the end of the month for the work done in the month, payment is due in 14 days or I stop work.

The invoice is sent out by my accounts lady on 1st of month, and clients are informed payment is due within 14days or a late payment fee of 10% will be added, a 'gentle nudge' is sent on 7th of month and then another 'stronger gentle nudge' is sent on the day reminding client payment is due by 5pm that day or the late fee will be added.

If payment is not received by 9am the next day an email is sent to the client chasing and giving them one week to pay (including the 10%) before it is passed to a collections agency (I use My Credit Controllers) who then chase the payment on my behalf. If they collect the payment they charge me 10%, if not they don't get paid.

That works for me - hope it helps you?

Sorry - incorrect company, I meant My Credit Controllers

 

[Sam White]

Thanks for the mention Hazel,
Your new approach works really well and I am glad we have been able to help.<removed>