Non-payment by clients


Front Page Looking For… Training Service Providers Non-payment by clients

This topic contains 15 replies, has 9 voices, and was last updated by  Skills Universe 2 years, 2 months ago.

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  • #39562

    I’d love to hear how other members would handle this problem.  A long-term client of mine, a large organisation, last year was extremely poor in their administration of our payments for training interventions.  Many of our invoices attracted interest after being, in some cases, up to 4/5 months in arrears.  This considerable interest is still unpaid by the client, and I have tried to claim it through their accounts procedures, but my client, faced with exposure of his department’s inefficiencies, has declared that unless I reverse the interest charge he will withdraw future work for my company.  Clearly this form of blackmail, designed to ensure he protects his own reputation internally, is against this company’s code of professional conduct.  However, if I take the problem higher it will most likely result in the said “protected” manager becoming even more antagonistic and result in the loss of my relationship with the client.  Sadly, trying to engage with more senior management has only resulted in my being shunted back down the line.  It’s a catch-22 situation.  Have any other members found themselves in similar situations?

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  • #39574

    Yes this happens often, I can suggest in the initial stage to at least request a “cover deposit” to break even your expenses for that session/product, we also use debit order systems, as policy, to deduct especially with clients with poor administration. Its tricky, but in some cases we have to turn our back and refuse!

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  • #39573

    Craig Woodward
    Participant

    I do something a little different;  For cetain (untested clients – my term for iffy clients) I offer ‘discounts’ for early payment.

     

    I invoice for the ‘full contracted value’ of the work, and then stipulate discount periods – 7 days 10% and 10 days 5%… this tends to get my payments made within 14 days… 

     

    Cheers

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  • #39572

    Des Squire
    Participant

    Once again I must state that protecting the identity of the company or a specific departmentsl head achiecves nothing and just shows how we are prepared to condone this behavioour. If you had to train on financila management at this compay what information would you impart in this regard? Why do differently now?

    I had a similar problem and stood my ground. I advised the company concerned that my terms of payment were there for a reason and that it was my terms that applied as I provided the service to them. I then made contact with the financial director and laid a complaint agains the accounts department. After much discussion and fighting I was eventually paid. After receiving payment I sent a letter to the director thanking him for his involvement and thanking those involved for eventually making the payment. I did not anticipate ever getting any more business from that company – Guess what – I am training there again in the next week or two. 

    It is our principles that are important and if we lose business for standing by our principles then so be it. We need to take a stand once and for all. If all fruit fails –  NAME AND SHAME.  

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  • #39571

    I am in exactly the same position, however my client continues to move the goalposts and uses stalling tactics. So much so that I was prepared to cut ties with them all together last week in a heated meeting. I am not the only person in this predicament … there are other service providers in the same boat.

    The sad part of this is that they have been paid by the stakeholders as a “middle man” and we are all doing the work. Our job is to ensure accountability … we did our job too well, and are now being victimized by so-called “managers” who are trying their utmost to sabotage us. I have finally sent a letter off to the directors of the company and have exposed the managers. Let’s see how the Directors handle this …

     

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  • #39570

    This is a situation all of us face who consult to other companies, organisations and government (National, Provincial and Loca) etc. I am not sure that there is a single solution which one applies universally, however I do believe there are certain principles worth utilising. The most important start out point is having an effectively prepared contract which your client signs before you do any work. It should contain terms of payment and consequences of non-compliance (ie interest etc). You also need to be sure that person has the authority to sign that contract. Large companies and government organisations are notorious for tardy payment of invoices and forget about getting them to pay interest. You are going to have to persistently chase them up for payment. If you are not a constant reminder for them, they are going to do what is inevitable and they will ignore or forget about you. Become very persistant, they end up paying as its the only way that will make you go away. But sometimes you will reach a point where you decide that you would not want to work for that company again, then you write letters to the CEO or even instructing an attorney to issue a summons.

    Having to chase up outstanding invoices is something many of us do not like and avoid it. The clients soon cotton on to it, and so you do not get paid. The implication is, start out with good processes in place, and persistently and relentlessly stick to them and you will find that your invoice will get paid more consistently than other consultants

      

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  • #39569

    Yes, I agree with all you say, Godfried.  Regardless of  the systems we put in place, and the numerous attempts to get our clients to adhere to our systems, sign our contracts, and the amount of times we bug them for payment, it seems that there are some clients who are better just avoiding.  What I would love an answer to, however, is how to go about highlighting these problems to the CEOs of the client concernes.  In my case, I believe the compliance department, CEO or COO concerned would be horrified to know that agents of the company are behaving this way.  Yet, if one takes the problem to the top, there is always the possibility that those decision-makers concerned simply hand the problem on to a subordinate, who in turn passes it back to the originator of the problem, who in turn refuses to have anything more to do with the supplier.  We need to find ingenious ways of exposing departmental managers who use bullying tactics.

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  • #39568

    All the best, Terence.  I really hope the Directors concerned takes this seriously to protect the reputation of their organisation, and don’t just “pass the buck”.  Wouldn’t it be nice if we could expose the companies who allow this sort of unethical treatment of suppliers?

    Terence Olivier said:

    I am in exactly the same position, however my client continues to move the goalposts and uses stalling tactics. So much so that I was prepared to cut ties with them all together last week in a heated meeting. I am not the only person in this predicament … there are other service providers in the same boat.

    The sad part of this is that they have been paid by the stakeholders as a “middle man” and we are all doing the work. Our job is to ensure accountability … we did our job too well, and are now being victimized by so-called “managers” who are trying their utmost to sabotage us. I have finally sent a letter off to the directors of the company and have exposed the managers. Let’s see how the Directors handle this …

     

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  • #39567

    Skills Universe
    Keymaster

    I recently read a post from someone who runs a web based business suggesting that sometimes we should “fire” a client. Maybe this is called for here.  Takes a lot of courage I know, but I wonder if the person who is blackmailing you would not back down – especially if you advise the CEO of the organisation as to why you don’t want to do business with them. It is just so unfair that they hold you to ransom, and what’s more holding on to a customer who doesn’t pay you on time, just because they are a big company, is not good business anyway.

    A small business owner once said to me that small businesses don’t go out of business because they don’t give service; it’s because they are not paid for service.

    However, there is a saying that goes “The bluntest pencil is better than the sharpest memory” , the point being  that if it is in your contract that interest would be charged, then they don’t have a leg to stand on. I have a client who had a long term contract with us, and each year would ignore their billing for at least 6 months. I would then send a lawyers letter, which meant the matter went the their legal department, and lo and behold not only would the invoice  amount be settled but the increase paid as well.  

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  • #43358

    Skills Universe
    Keymaster

    I recently read a post from someone who runs a web based business suggesting that sometimes we should “fire” a client. Maybe this is called for here.  Takes a lot of courage I know, but I wonder if the person who is blackmailing you would not back down – especially if you advise the CEO of the organisation as to why you don’t want to do business with them. It is just so unfair that they hold you to ransom, and what’s more holding on to a customer who doesn’t pay you on time, just because they are a big company, is not good business anyway.

    A small business owner once said to me that small businesses don’t go out of business because they don’t give service; it’s because they are not paid for service.

    However, there is a saying that goes “The bluntest pencil is better than the sharpest memory” , the point being  that if it is in your contract that interest would be charged, then they don’t have a leg to stand on. I have a client who had a long term contract with us, and each year would ignore their billing for at least 6 months. I would then send a lawyers letter, which meant the matter went the their legal department, and lo and behold not only would the invoice  amount be settled but the increase paid as well.  

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  • #44398

    Skills Universe
    Keymaster

    I recently read a post from someone who runs a web based business suggesting that sometimes we should “fire” a client. Maybe this is called for here.  Takes a lot of courage I know, but I wonder if the person who is blackmailing you would not back down – especially if you advise the CEO of the organisation as to why you don’t want to do business with them. It is just so unfair that they hold you to ransom, and what’s more holding on to a customer who doesn’t pay you on time, just because they are a big company, is not good business anyway.

    A small business owner once said to me that small businesses don’t go out of business because they don’t give service; it’s because they are not paid for service.

    However, there is a saying that goes “The bluntest pencil is better than the sharpest memory” , the point being  that if it is in your contract that interest would be charged, then they don’t have a leg to stand on. I have a client who had a long term contract with us, and each year would ignore their billing for at least 6 months. I would then send a lawyers letter, which meant the matter went the their legal department, and lo and behold not only would the invoice  amount be settled but the increase paid as well.  

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  • #39566

    Hi Joanna, that is why I referred to being relentlessly persistent in making contact with the manager and you are right, one has to find creative ways of doing so in different ways. Bug them enough, be a constant reminder, be nice all the time, but keep at it. The secret is as you say, be creative (by being a constant reminder).

    Joanna Housdon Cooke said:

    Yes, I agree with all you say, Godfried.  Regardless of  the systems we put in place, and the numerous attempts to get our clients to adhere to our systems, sign our contracts, and the amount of times we bug them for payment, it seems that there are some clients who are better just avoiding.  What I would love an answer to, however, is how to go about highlighting these problems to the CEOs of the client concernes.  In my case, I believe the compliance department, CEO or COO concerned would be horrified to know that agents of the company are behaving this way.  Yet, if one takes the problem to the top, there is always the possibility that those decision-makers concerned simply hand the problem on to a subordinate, who in turn passes it back to the originator of the problem, who in turn refuses to have anything more to do with the supplier.  We need to find ingenious ways of exposing departmental managers who use bullying tactics.
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  • #39565

    Hi Joanna,

    Not everyone will agree with this but I suggest the following if you really want to get your money:

    DRAFT (NOT FOR IMPLEMENTATION) an open letter to the local press complaining about the unnecessary and sometimes fatal pressure this non-payment puts on the survival and sustainability of small business. In it you refer to the organisation concerned and the nature of services provided by you and the efforts you have made to obtain payment. Include the statement about losing future business. Then send the draft to the offending official and request he address the matter before such and such a date in order to avoid the publication.

    Then address a letter to the CEO (as recommended by others here) and explain the difficulty you have experienced and ask him to help ensure fairness in your future dealings with the company.

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  • #39564

    Deon Binneman
    Participant

    I had a similar experiences and when I reacted I was even threatened by legal action.

    They were also very upset about my blog article –Differentiate your Suppliers and pay them accordingly.

    But it is nonsense. Stakeholder Management is about being sensitive to the needs and expectations of your stakeholders and to take that into account in your planning.

    Unfortunately the back offices do not have a clue nor understanding of the word stakeholder management nor customer service.

    I have done speaking & consulting work in 11 countries and have only had that problem here in South Africa.

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  • #39563

    Skills Universe
    Keymaster

    The Most Potent Lawful Weapon a Small Business can Wield

    The commercial affidavit process does not require a lawyer, is very cheap and makes people think twice before messing with you.

    What does it do?
    It allows you to express your truth in law. If you cannot afford to sue someone, then serve them with a commercial affidavit instead. In fact, even if you CAN afford to sue them, you should still start the process in this manner.
    The difference between a commercial affidavit and an ordinary affidavit is you cannot lie by omission. In other words, it is the entire truth. When you serve it on someone, they have to serve you one in return. And when they do, they have to rebut every single one of your points! They cannot lie or be deceitful in any way, so provided that you are in the right then your affidavit will stand as Truth in Law.

    How do you do it?
    You need to list every point relating to the issue at hand, including the date that each event took place. This can be time consuming, but what’s a couple of ours of admin when you stand to gain so much? Once you have written your affidavit, there are three ways of getting it certified:
    1. You can get three other people to witness your signature and sign it (this is obviously very cheap)
    2. You can put it under Notary Seal. (This is still cheap, but highly recommended. A Notary Public will testify that this document is the truth, the whole truth and nothing but the truth.)
    Both options should be posted by registered mail. However, there is also a third option:
    3. You notarise your affidavit as per point two, but you get the Sheriff to serve it instead. (This is way more expensive, but it does have the added feature of scaring the living daylights out of the recipient).

    Does it work?
    Well, commercial affidavits have not been fully tested here in South Africa because it is a non-judicial process. This means it doesn’t require the expensive services of a lawyer or even the “legal system” as we know it. Overseas it is catching on like wildfire. Just think about it logically: if you are one of 10 creditors of a particular client, serving them with a notarised affidavit can only move you up the priority list. And as for anyone who screwed you over in a business deal, they are going to get quite a shock when the truth is shoved in their face.
    …oh yes, and did I mention that this process targets not only the company that hurt you, you but also the individual/s within that company? This means that corporate and government employees are going to have to start doing their jobs properly because they can be held personally liable.

    Is this all I need to do???
    In many cases, yes. However, sometimes they will ignore your affidavit. That’s when you have to take things to the next level. This is more complicated and I won’t go into it here. Let’s just say that you have a very powerful weapon at your disposal and you would be crazy not to use it.
    Luther Diedericks from Business hub
    (Join the http://www.jojou.cc/ community for more detail on the real lawful system. It is all relevant to South Africa)

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  • #43357

    Skills Universe
    Keymaster

    The Most Potent Lawful Weapon a Small Business can Wield

    The commercial affidavit process does not require a lawyer, is very cheap and makes people think twice before messing with you.

    What does it do?
    It allows you to express your truth in law. If you cannot afford to sue someone, then serve them with a commercial affidavit instead. In fact, even if you CAN afford to sue them, you should still start the process in this manner.
    The difference between a commercial affidavit and an ordinary affidavit is you cannot lie by omission. In other words, it is the entire truth. When you serve it on someone, they have to serve you one in return. And when they do, they have to rebut every single one of your points! They cannot lie or be deceitful in any way, so provided that you are in the right then your affidavit will stand as Truth in Law.

    How do you do it?
    You need to list every point relating to the issue at hand, including the date that each event took place. This can be time consuming, but what’s a couple of ours of admin when you stand to gain so much? Once you have written your affidavit, there are three ways of getting it certified:
    1. You can get three other people to witness your signature and sign it (this is obviously very cheap)
    2. You can put it under Notary Seal. (This is still cheap, but highly recommended. A Notary Public will testify that this document is the truth, the whole truth and nothing but the truth.)
    Both options should be posted by registered mail. However, there is also a third option:
    3. You notarise your affidavit as per point two, but you get the Sheriff to serve it instead. (This is way more expensive, but it does have the added feature of scaring the living daylights out of the recipient).

    Does it work?
    Well, commercial affidavits have not been fully tested here in South Africa because it is a non-judicial process. This means it doesn’t require the expensive services of a lawyer or even the “legal system” as we know it. Overseas it is catching on like wildfire. Just think about it logically: if you are one of 10 creditors of a particular client, serving them with a notarised affidavit can only move you up the priority list. And as for anyone who screwed you over in a business deal, they are going to get quite a shock when the truth is shoved in their face.
    …oh yes, and did I mention that this process targets not only the company that hurt you, you but also the individual/s within that company? This means that corporate and government employees are going to have to start doing their jobs properly because they can be held personally liable.

    Is this all I need to do???
    In many cases, yes. However, sometimes they will ignore your affidavit. That’s when you have to take things to the next level. This is more complicated and I won’t go into it here. Let’s just say that you have a very powerful weapon at your disposal and you would be crazy not to use it.
    Luther Diedericks from Business hub
    (Join the http://www.jojou.cc/ community for more detail on the real lawful system. It is all relevant to South Africa)

    Share on Social Media
  • #44397

    Skills Universe
    Keymaster

    The Most Potent Lawful Weapon a Small Business can Wield

    The commercial affidavit process does not require a lawyer, is very cheap and makes people think twice before messing with you.

    What does it do?
    It allows you to express your truth in law. If you cannot afford to sue someone, then serve them with a commercial affidavit instead. In fact, even if you CAN afford to sue them, you should still start the process in this manner.
    The difference between a commercial affidavit and an ordinary affidavit is you cannot lie by omission. In other words, it is the entire truth. When you serve it on someone, they have to serve you one in return. And when they do, they have to rebut every single one of your points! They cannot lie or be deceitful in any way, so provided that you are in the right then your affidavit will stand as Truth in Law.

    How do you do it?
    You need to list every point relating to the issue at hand, including the date that each event took place. This can be time consuming, but what’s a couple of ours of admin when you stand to gain so much? Once you have written your affidavit, there are three ways of getting it certified:
    1. You can get three other people to witness your signature and sign it (this is obviously very cheap)
    2. You can put it under Notary Seal. (This is still cheap, but highly recommended. A Notary Public will testify that this document is the truth, the whole truth and nothing but the truth.)
    Both options should be posted by registered mail. However, there is also a third option:
    3. You notarise your affidavit as per point two, but you get the Sheriff to serve it instead. (This is way more expensive, but it does have the added feature of scaring the living daylights out of the recipient).

    Does it work?
    Well, commercial affidavits have not been fully tested here in South Africa because it is a non-judicial process. This means it doesn’t require the expensive services of a lawyer or even the “legal system” as we know it. Overseas it is catching on like wildfire. Just think about it logically: if you are one of 10 creditors of a particular client, serving them with a notarised affidavit can only move you up the priority list. And as for anyone who screwed you over in a business deal, they are going to get quite a shock when the truth is shoved in their face.
    …oh yes, and did I mention that this process targets not only the company that hurt you, you but also the individual/s within that company? This means that corporate and government employees are going to have to start doing their jobs properly because they can be held personally liable.

    Is this all I need to do???
    In many cases, yes. However, sometimes they will ignore your affidavit. That’s when you have to take things to the next level. This is more complicated and I won’t go into it here. Let’s just say that you have a very powerful weapon at your disposal and you would be crazy not to use it.
    Luther Diedericks from Business hub
    (Join the http://www.jojou.cc/ community for more detail on the real lawful system. It is all relevant to South Africa)

    Share on Social Media

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