My advice on this front is the very first thing you do before you make any sale is invest in getting proper, lawyer-speak terms and conditions drawn up. If you don't have proper terms and conditions in place then your contracts are pretty useless and subsequently your ability to recoup any costs via legal means is very limited.
Front and centre in any terms and conditions is the clause that the client will be liable for any costs incurred in recovering late fees or debts. The threat of legal action doesn't always motivate people, but if they know that by putting you off they're going to cost themselves even more money you're likely to get much better response. I recommend these guys: http://www.eccreditcontrol.com. We paid a couple of grand and they did our terms and conditions and for that price also gave us a coupon book for our first ten debt retrievals or something similiar. You know their going to do a good job because the better their terms and conditions the easier it makes them to get the money. I think I'd be many tens of thousands of dollars in front if I'd have done this up front and its much easier to start with proper terms then try and move your clients to them later in the peace as we're finding ourselves having to do. Phil Sim Chief Executive Officer, MediaConnect Australia Pty Ltd www.mediaconnect.com.au [EMAIL PROTECTED] Ph: +61 2 9894 6277 Fax: +61 2 8246 6383 Mobile: 0413889940 On Wed, Nov 12, 2008 at 10:20 AM, Mark Neely <[EMAIL PROTECTED]> wrote: > Nic, > > Some great suggestions from the list thus far. Two additional points: > > 1. Send the LOD via registered mail (you may need to prove the demand for > payment has been made, which will require proof the letter has been sent). > > 2. Don't bother sending the LOD if you don't intend to follow through. Most > lawyers will tell you that people who are serious about suing don't > *threaten* to sue - they just initiate proceedings. If you send a letter of > demand and don't follow through, you've pretty well educated that customer > (a) that they can ignore your invoices and (b) not to get too concerned > should an LOD lob. And, of course, customers talk, so other recalcitrant > customers will learn etc. > > Suing for debts can be time consuming. Unless you're talking considerable > sums (i.e. more than $10K), you're going to be confined to the small claims > court and can't claim costs, therefore you'd probably have to represent > yourself (or spend $ you cannot recoup on a lawyer). Representing yourself > is actually easier than it sounds, but it is bloody time consuming. Drafting > the statement of claim. Getting it served. Producing evidence of service. > Filing application for judgement etc. And if they decide to contest, then > you've got to turn up on the day and wait to get in front of a magistrate. > Sadly, the wheels of justice can be slow and frustrating. > > I don't want to sound too pessimistic, but suing for small debts is > stressful and time consuming. Better to avoid if possible. > > So, as a new thread, what are the options for avoiding being in this > position? > > - Establish credit terms (i.e. don't allow new customers to have anything > on credit until they have demonstrated creditworthiness). I know it is > difficult to say 'no' to a new client when you're starting up, but most > customers understand it is a resonable request. > > - Structure progress payments. On bigger projects, I tend to use a 40:40:20 > (or, sometimes, 40:30:30) formula. 40% payable on commissioning (with 14 day > terms), 40% payable on delivery of project output, and 20% payble at client > acceptance of deliverable. The benefit of this approach is that you stagger > your work to coincide with payment, and if there are payment difficulties, > you still have some bargaining chips (i.e. holding up completion of the > project). There is still some risk - the second you have handed over the > final deliverable, you lose your negotiating clout - but by then it is a > much smaller component of the overall fee. > > - There is a proven impact of delay on successful recoupment of invoices. > Basically, the day you invoice, the client is (presumably) happy with your > product + service. That is when to strike and ask for accellerated payment. > The longer the gap between delivery and payment, the less 'happy' the client > is (in that they may no longer see the 'benefit' you have created, and now > see only the 'cost' of having done business with you). So press for payment > as soon as you can, and leverage the good will that exists. > > Regards, > > Mark > > > > > Does anyone have any experience in issuing Letters of Demand for unpaid >> invoices? >> >> Does anyone have a template they could share? >> >> Thanks in advance >> >> Nick >> >> > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
