Posted by doctorhandshake 6 hours ago
- Payment is due X days after receipt of invoice, or immediately after the consultant has addressed any quality issues, whichever is sooner
- Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
- In the event of a late payment the invoice for the next deliverable shall immediately fall due.
- The consultant shall be entitled to shift deadlines on deliverables in the event of a late payment as a result of any work disruption, without incurring any liability.
- Payment shall be made in X currency, or an exchange rate at X date on Oanda.com shall apply.
- The client is responsible for any bank fees incurred by their, or any intermediary bank. In the event of a SWIFT transaction it shall be made with the OUR payment code.
- The jurisdiction in the event of a conflict shall be England and Wales. Neither party shall be bound by arbitration.
- The client and consultant shall both indemnify the other up to the total value of the contract and shall not under any circumstance be liable beyond X GBP.
We also no longer share downloadable links of our deliverables until they are paid up. They get a view/comment only link for reports/data etc.
We’ve found that clients that aren’t willing to accept these terms won’t pay you either way.
We determine the net days on the invoice based on the credit rating of the client. Ironically, the good clients pay within 2-3 days normally, and the difficult ones are very “long tail”. About 1% of contracts tend to fully or partially default on their payments.
We’re in a particularly credit poor industry but our average delay due to late payment is 23 days. Those clients where we stop delivery pay on average 11 days sooner than those contracts where we don’t stop delivery.
This is based on around 2,000 invoices sent over the last 5 years.
It costs something like 80 quid to file for recovery in court and in our experience invoices are immediately paid up when a “Letter before action” is sent.
You burn the relationship, but arguably you probably don’t want it anyway.
I believe this is what we call small claims court in the United States. The threshold varies by state, but it is a very effective way to deal with recalcitrant companies both large and small.
Do you mean 8 percent, or 8 percentage points?
They mean “percentage points”.
https://www.gov.uk/late-commercial-payments-interest-debt-re...
As I understand it, from our lawyer, is that this exact wording is automatically enforceable in UK courts and easiest in the event of a dispute. It’s also generally internationally accepted.
Why ironically? Isn't that exactly what you'd expect?
Kind of mirrors "it's expensive to be poor"
In a different domain, this is the painful lesson of almost anyone who tries to help people in a bind -- you can try to help, but yours is unlikely to be the advice that sets them straight, so you shouldn't get too invested with unproven or, especially, proven unreliable actors.
Neatly distilled I believe you are correct
It should be, oh, short-term rush job in a foreign country for a sketchy client? That is most definitely cash up front time. Oh, you can't afford that? Sucks to be you, not going to do it.
Be pleasantly surprised when a poorly run project is being run by nice, honest people. Prep for the opposite.
It isn't, but you can't get blood from a stone and squeezing costs money.
It sounds like the entity that the contract is with has no real assets and/or is based in a jurisdiction which is hard to enforce judgements in. That's a case where you need to get paid up-front, which is the real lesson in this article.
Or at least in very small batches and with very short due dates.
Often paid late, but FIVE times, I never got paid at all, one time it was several thousands over the course of months and I almost pursued it in court, but in the end I took the L.
It's always these incubator types, they're the absolute worst clients. They have the cash in the bank too, they often just forget or feel entitled and don't want to back down.
NEVER work for a YC founder.
https://en.wikipedia.org/wiki/Sweat_equity
Of course, the startup doesn't go anywhere, and your sweat equity never materializes, so you're left with just the pitiful pay.
I went through this in my late teens/early 20's, along with many friends.
I would generalize this to "don't work for someone whose ability to pay is based on a high-risk gamble".
There are certainly shady people who can pay but don't because they are greedy avaricious bastards. But there are also plenty of people who would like to pay but whose business venture fails and with it goes their funds.
In the author's story, they probably should have concluded fairly early on that a team that wildly incompetent was also unlikely to produce a product that satisfies their client. And if the client doesn't pay, no one gets paid.
However them dissolving the entity and moving their assets and IP around is also not free and will incur overhead, if they actually did it.
Threatening to dissolve the entity seemingly admits that they do have something worth collecting against. In my experience the companies who run out of money just tell you that they’re out of money and they also start losing key employees and your email contacts because they’re not getting paid either. If the company continues to exist and they’re threatening you to not sue, that might be a sign that they do have the money but they’re relying on intimidating contractors to not try collecting it.
Legal action is not free, so all of this has to be weighed.
EDIT: I should explain how I know this. Younger me took a job with a startup that got in over its head with spending but the CEO didn’t want the party to stop. His strategy was to stop paying any vendors and use the remaining cash flow to only pay past invoices for vendors that we needed something from (more work, more product) or anyone who looked like they were going to sue us. If someone got lawyers involved, they got paid. Needless to say I didn’t keep that job very long.
Definitely bring it up with your lawyer.
The weirdest part to me, receive a call and just get up and go? Priorities? Did you write this blog post from the doghouse?
The author does contracting in niche topics. When your contracting domain is uncommon you have to go where the work is.
You can charge higher prices for niche work and therefore tolerate more time in between contracts. This person may be spending more time not working and with his family than the typical FTE in this arrangement, even if the jobs occasionally require them to fly somewhere for a month.
Apparently doing emergency repair work can be extremely well paid.
(His wife was fine with it, but when there's great inconvenience for the family balanced by great pay for the family, you've got to get paid)
Or... maybe he needs income to exist.
atleast that's my interpretation of it of how logic might follow if they are working in niche space, many people seem to be applying the logic onto themselves into completely standard situation, but I don't suppose that is the case here.
Hope this helps in genuinely understanding their situation, from my reading/thinking about it.
Also, mandatory: https://creativemornings.com/talks/mike-monteiro--2/1
The lesson I learned is that it doesn't matter how long they've been your friend, when it comes time to pay, they may still try to stiff you. The value of your service diminishes infinitely after it has been performed.
Choice quote from the linked talk (aptly titled "F*ck you, pay me").
If I don't get paid for one day of work, I will probably get over it in a few hours. If I don't get paid for six months of work, we will have a serious problem. The tighter and more incremental we can make the delivery process, the less likely anyone gets screwed.
If a party is pushing hard for long-term contracts or large up-front sums of payment, I would walk away from that transaction unless there was a literal golden goose sitting in their lap.
I send a gentle reminder just to my immediate point of contact to start. If that doesn't work, I start sending more business-like requests for payment every week, and I CC anyone I think might help make it happen.
I've never fired anyone, and everyone has eventually paid (knock wood), but there have been times when I assumed the money was a lost cause (though never five figures worth like the person who shared this blog post).
But more than once, I've had a client contact me and request new work, and I've had to remind them they still have an unpaid invoice. I'll tell them I can't start anything new until the old work is paid. They almost invariably blame the delay on their billing department, and the money eventually finds its way to me.
Some favorites:
- No way they would actually screw me over! We're buds/they got me tiger balm/they paid some/I did them a solid
- Thin veneer of safe fallbacks that doesn't hold up under scrutiny. Legal or other 'repercussions'
- Endless delays and excuses (though it's usually too late by this point)