Re: Billing a client
On Mon, 2013-02-11 at 07:56 +, Alex Brelsfoard wrote: Here's a slightly off-topic question for you all. I'm planning on doing some consulting work and was wondering what I should expect as the norm for delay between when I bill my client and when I should receive their money. Is there such a norm? Or is it entirely dependent on the client and/or our agreement? It's down to the contract and the client. Specifically the contract sets out what is expected and forms the basis on which you should expect to be paid so if the contract states payment 14 or 30 days after invoice then that is when you should be paid. Some clients will pay on time. Some will delay payment - sometimes for a long time. Those who delay payment are breaching the terms of the contract and are offering you free money (well, it's not entirely free as you have to invoice them for it and may have to use the courts to actually get it) as you are entitled to charge statutory interest on late payments.
Re: Billing a client
On 02/11/2013 07:56 AM, Alex Brelsfoard wrote: Here's a slightly off-topic question for you all. I'm planning on doing some consulting work and was wondering what I should expect as the norm for delay between when I bill my client and when I should receive their money. Is there such a norm? Or is it entirely dependent on the client and/or our agreement? That's the kind of thing that you'd specify in the contract between you and the client. Or, if you didn't do that, you could try putting a payment terms: XX days on the bottom of the invoice. But anyway, most clients will expect to pay an invoice about a month after receiving it. Some clients ask for 90 days to pay. I avoid those clients. Dave... -- Dave Cross :: d...@dave.org.uk http://dave.org.uk/ @davorg
Re: Billing a client
When I deal with small building contractors or consultants they want invoices paid on 14 day or 30 day terms. When I deal with massive multinational IT companies, they agree to pay invoices on 90 day terms. So somewhere between 14 and 90 days seems to be normal practice. I'd generally ask for closer to 14 than 90 all other things being equal. On 11/02/2013, at 6:56 PM, Alex Brelsfoard wrote: Here's a slightly off-topic question for you all. I'm planning on doing some consulting work and was wondering what I should expect as the norm for delay between when I bill my client and when I should receive their money. Is there such a norm? Or is it entirely dependent on the client and/or our agreement? Thanks for any advice. --Alex
Re: Billing a client
IME, about a week or two after your 30 day terms expire. Sometimes much much later, very rarely sooner. Bizarrely, agencies are often more reliable about paying invoices promptly (or at least within the terms) than any company I've worked for directly in the last 4 years. Alex Brelsfoard alex.brelsfo...@gmail.com wrote: Here's a slightly off-topic question for you all. I'm planning on doing some consulting work and was wondering what I should expect as the norm for delay between when I bill my client and when I should receive their money. Is there such a norm? Or is it entirely dependent on the client and/or our agreement? Thanks for any advice. --Alex -- Sent from my mobile phone. Please excuse terseness, typos and top-posting.
Re: Billing a client
Oh, I did have an engineering report - in that instance, they refused to give me the report until I'd paid them for it (they're also giving me an implicit support agreement for the life of the project with that deal). The surveyor on the other hand asks for 30 day terms (and they charge for everything they do). I think the best compromise is to state terms explicitly in the contract. Withholding until payment is a good way to fix the problem in absence of a contract. On 11/02/2013, at 6:56 PM, Alex Brelsfoard wrote: Here's a slightly off-topic question for you all. I'm planning on doing some consulting work and was wondering what I should expect as the norm for delay between when I bill my client and when I should receive their money. Is there such a norm? Or is it entirely dependent on the client and/or our agreement? Thanks for any advice. --Alex
Re: Billing a client
On 11 February 2013 07:56, Alex Brelsfoard alex.brelsfo...@gmail.com wrote: Here's a slightly off-topic question for you all. Oh - I'd say that's bang on topic for this list ;-) I'm planning on doing some consulting work and was wondering what I should expect as the norm for delay between when I bill my client and when I should receive their money. Is there such a norm? Or is it entirely dependent on the client and/or our agreement? As others have said - it depends on client contract. Some tips that have helped me move it depends closer to now. * Bill everything up-front. * Bill significant chunk up-front. * Roll expenses into price and don't bill them separately (avoids argument about details which then spins off invoice into the next 30day payment cycle) * Offer a X% discount if paid within N days (in effect a late payment penalty - but phrasing it as a discount gets better results in my experience) * Get to know the folk in the department that pays the bills personally * Where at all possible work directly for the person who signs off on payments * Where at ll possible work for somebody above the finance department in the org chart * If somebody pays late (politely) only work for them again if they pay N% up front. (if anybody has any more I'd love to hear 'em ;-) Adrian -- http://quietstars.com adri...@quietstars.com twitter.com/adrianh t. +44 (0)7752 419080 skype adrianjohnhoward pinboard.in/u:adrianh
Re: Billing a client
A few other points on this: you might like to agree some standard for agreeing when a piece of work has actually been done.Without this, it could get messy if the other company decides not to pay. The most common method is probably getting time sheets completed and signed off. Alternatively (and I have never done this personally) - if you have entered into a fixed price contract to deliver something, agreeing ahead of time what the acceptance criteria for the deliverable is. This might imply having a well defined requirements/design document. Aside: It used to be said of a well-known software consultancy (which I won't name) that they bid low to get the work - knowing the requirements document would always turn out to be inadequate. They would then make their money on the change requests. I have only once had to sue someone for non-payment. It was a short 4 week piece of work and there was a plethora of evidence that the work had been done, but the company was short on cash (not my problem). So I lawyered up. There's a procedure that then has to be followed. Don't take this as legal advice but some of the steps I recall were: I send a letter to the company requesting payment, time passes, my lawyer sends a letter to the company requesting payment, time passes, my lawyer sends a letter threatening to wind up the company, time passes, we issue winding up orders on the company. The first step of this is it has to be advertised in one of a few specific journals. It was when we advertised the winding up petition that the company's bank (and I believe this is obligatory but don't quote me) froze their bank account. At this moment, the company suddenly paid attention to my request for payment, paid in full, and paid my solicitor's fee. Chris
RE: Billing a client
One other thing. I'm not suggesting lawyering up should necessarily be your first port of call. The longest arrears I have ever had was something like 5 months, but there was a lot of goodwill and trust on my part in that case. I was working for a software house that was running low on cash. They were attempting to refinance themselves but the problem was the company founder didn't want to dilute his holding too much so was trying to (effectively) get money from his mates to maintain his shareholding when the new cash came in. I, and the other contractors, kept getting reassurances that there was no issue about being paid: it was just a question of when. I had had a fair amount of money in my corporate account so I was able to live off that for a while - but about the 5 month mark, I did have to say to the company that it was getting past a point of goodwill - and was getting to the point where I was physically not going to be able to continue for financial reasons. At which point, they found some money to pay me some (not all) of the arrears. And eventually they completely caught up. Obviously the high level risk in these circumstances is that contractors are very low down the pecking order if the company were to go into receivership. Chris
Re: Billing a client
Yes, this happened to me too, twice. My take: The first time, the company went bankrupt and I was lucky to be working for an agency, so *they* paid. The second time, the company was just limping along, and waiting for the next big client. They also paid, but it was after about six months, and there really was no good will left by that time. A month or two in arrears could be seen as quite acceptable in some cases, and can even be helpful to each other, if you have a worthwhile working relationship. -- Ciao Richard Foley http://www.rfi.net/books.html On Mon, Feb 11, 2013 at 01:21:17PM +, Chris Jack wrote: One other thing. I'm not suggesting lawyering up should necessarily be your first port of call. The longest arrears I have ever had was something like 5 months, but there was a lot of goodwill and trust on my part in that case. I was working for a software house that was running low on cash. They were attempting to refinance themselves but the problem was the company founder didn't want to dilute his holding too much so was trying to (effectively) get money from his mates to maintain his shareholding when the new cash came in. I, and the other contractors, kept getting reassurances that there was no issue about being paid: it was just a question of when. I had had a fair amount of money in my corporate account so I was able to live off that for a while - but about the 5 month mark, I did have to say to the company that it was getting past a point of goodwill - and was getting to the point where I was physically not going to be able to continue for financial reasons. At which point, they found some money to pay me some (not all) of the arrears. And eventually they completely caught up. Obviously the high level risk in these circumstances is that contractors are very low down the pecking order if the company were to go into receivership. Chris
[ANNOUNCE] Reminder: Croyden.pm, this Thursday, 14 Feb
An gentle reminder, gentle folks, that Croyden.pm will be meeting at the Dog Bull, Surrey St, Croydon, CR0 1RG, on Thursday 14 Feb. -- David Cantrell | semi-evolved ape-thing There is no one true indentation style, But if there were KR would be Its Prophets. Peace be upon Their Holy Beards.
Re: Billing a client
wow, Thank you ALL. Massive amount of info. Sorry I didn't respond earlier, been a bit of a crazy day. But this was all REALLY helpful. Thank you all for sharing your stories and advice. This sets me straight and prepared. Cheers all! --Alex On Mon, Feb 11, 2013 at 2:04 PM, Richard Foley richard.fo...@rfi.netwrote: Yes, this happened to me too, twice. My take: The first time, the company went bankrupt and I was lucky to be working for an agency, so *they* paid. The second time, the company was just limping along, and waiting for the next big client. They also paid, but it was after about six months, and there really was no good will left by that time. A month or two in arrears could be seen as quite acceptable in some cases, and can even be helpful to each other, if you have a worthwhile working relationship. -- Ciao Richard Foley http://www.rfi.net/books.html On Mon, Feb 11, 2013 at 01:21:17PM +, Chris Jack wrote: One other thing. I'm not suggesting lawyering up should necessarily be your first port of call. The longest arrears I have ever had was something like 5 months, but there was a lot of goodwill and trust on my part in that case. I was working for a software house that was running low on cash. They were attempting to refinance themselves but the problem was the company founder didn't want to dilute his holding too much so was trying to (effectively) get money from his mates to maintain his shareholding when the new cash came in. I, and the other contractors, kept getting reassurances that there was no issue about being paid: it was just a question of when. I had had a fair amount of money in my corporate account so I was able to live off that for a while - but about the 5 month mark, I did have to say to the company that it was getting past a point of goodwill - and was getting to the point where I was physically not going to be able to continue for financial reasons. At which point, they found some money to pay me some (not all) of the arrears. And eventually they completely caught up. Obviously the high level risk in these circumstances is that contractors are very low down the pecking order if the company were to go into receivership. Chris
