DON'T sell the accounts receivable to a factoring company. they won't give you enough money to make it worth while.
DO:
1) talk to the client and find out why they are not paying
2) get them on a payment plan if necessary
3) or get them to pay w/a credit card (through square, paypal, etc)
4) deal with their concerns, if they have any (such as problems with their payment system, a problem with your invoice, etc)
And, when do you get tough?
If I think there is an issue, I get tough right away. Usually, I am calling them if it's more than 30 days. If it gets to 60 days I'm getting seriously tough. Really, I should be getting tough a lot faster (14 and 30 days) but I'm short staffed.
It depends on the ammt of money too - a client who owes me $500 isn't as serious as one who owes $50,000.
It also depends on how well I know the client. One who is a continual client will get more slack than a new client. But everyone has to pay.
In other words, my client who is bringing me a new project every month gets cut slack when his invoice is overdue because he is on vacation.
this is a tough one....as an architect and owner of an architectural company in seattle, i can say for certain that getting paid is the single most important yet challenging thing about running an architectural design firm. we always want to remain cordial with our clients but if/when they stop paying, it can strain the relationship. the first thing you want to know is WHY. are they unhappy? are they just too busy? this will be important in deciding how to handle it. i usually start with an email that says something like: "i know you are very busy , but....." and add in a little statement about why prompt payment is important to you...something like "i hate to need to bring this up, but with a business of my size, we count on prompt payment to ensure our cashflow is intact....when might we expect payment?" and you could always imply that youll need to charge interest on their past due invoices....we do it on anything more than 60 days out...that seems to help and since its in the agreement there isnt much they can argue about. you never want to give away the work (i.e.file for permits or deliver it to them) until their account is fully up to date. ALWAYS get a retainer and hold it until the end. hope this helps! good luck.
Assuming you are in contact with your client, why don't you just call your client to remind them to pay you... I think having your secretary call instead of you calling personally sets a different tone... they can blow off your secretary, but they can't necessarily blow you off...
I always feel that payment is this subject that no one ever wants to talk about with their clients... being frank with them at the beginning is incredibly important. If you are frank with them about payments from the getgo, calling them to remind them to make a payment should not be an issue... waiting 30 days is wayyy longer than I would ever expect.
Clients want to see results. Sitting in one client meeting after another revising/reworking floor plans and looking at the same or slightly different renderings/models isn't the way to get paid... Invoicing them after something has actually been accomplished is always the better way to go... In other words: invoice your clients after major milestones- whether or not they occur in the beginning or in the end of the design/construction process. Don't do a bunch of renderings and schematic plans, have your clients feel as if you are all still digging to find "the solution" and invoice them just because you need to get paid for the work. Sure- you must get paid; but making your client feel that the work you do has actually led to progress is the reason for why they will want to pay you... I'm not a psychologist, but it seems as if clients pay out of satisfaction rather than necessity. If you have to have the conversation about whether or not they are satisfied, then you are doing something wrong...
This won't help with your current situation, but for the next time, inoculate yourself as much as possible from exposure to non-paying clients as you can. Over 20 years in (small) practice, I've found that 90% of payment issues come at the end of the project. A certain kind of client gets my last invoice, and announces that they weren't happy with some aspect of the project, or of our services (typically they've never mentioned the problem previously), and therefore they're not paying the invoice.
1. Structure your contract so that you pay back the initial retainer in such a way that you have little/no exposure during construction. I set this up so that I pay back the retainer in increments, and so that the amount of the retainer due back at the end of the project equals 1/2 of our fees during CA. So that when my last invoice is for $x in fees, with a final credit of the same amount for that retainer repayment. There's nothing like the look on a scheming client's face when they realize they can't screw me.
2. I've actually put in a clause that requires both owner and architect to immediately raise any performance or other issues of unhappiness at the time that they occur. The idea being that if something had to be litigated, so if they ambush me with a complaint about something from 6 months earlier, and if the issue went to court, the arbitrator/judge/etc will see that they had an obligation to inform me of the issue at the time it happened, cutting the legs out from their justification for non-payment.
3. As mentioned above, put in the contract that you won't release construction documents, or sign of on DOB close out paperwork, unless their account is current. And include language that the owner is solely responsible for any added costs that are the result of delays due to non-payment.
4. Your contract should state that you have the right to stop work if an invoice is not paid in full within 30 days.
5. Invoice every month, even if it's for a small amount. When you don't invoice for 3 months, you're increasing your exposure.
Apr 14, 15 10:37 am ·
·
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.
client not paying
when do you start getting tough with a client for not paying? and what steps do you take?
Always put a clause stating that the deposit applies only to the last invoice.
Always make sure that releasing drawings is contingent upon having a current account.
when do you start getting tough with a client for not paying?
When they stop paying.
what steps do you take?
Stop working.
lol
DON'T sell the accounts receivable to a factoring company. they won't give you enough money to make it worth while.
DO:
1) talk to the client and find out why they are not paying
2) get them on a payment plan if necessary
3) or get them to pay w/a credit card (through square, paypal, etc)
4) deal with their concerns, if they have any (such as problems with their payment system, a problem with your invoice, etc)
And, when do you get tough?
If I think there is an issue, I get tough right away. Usually, I am calling them if it's more than 30 days. If it gets to 60 days I'm getting seriously tough. Really, I should be getting tough a lot faster (14 and 30 days) but I'm short staffed.
It depends on the ammt of money too - a client who owes me $500 isn't as serious as one who owes $50,000.
It also depends on how well I know the client. One who is a continual client will get more slack than a new client. But everyone has to pay.
In other words, my client who is bringing me a new project every month gets cut slack when his invoice is overdue because he is on vacation.
this is a tough one....as an architect and owner of an architectural company in seattle, i can say for certain that getting paid is the single most important yet challenging thing about running an architectural design firm. we always want to remain cordial with our clients but if/when they stop paying, it can strain the relationship. the first thing you want to know is WHY. are they unhappy? are they just too busy? this will be important in deciding how to handle it. i usually start with an email that says something like: "i know you are very busy , but....." and add in a little statement about why prompt payment is important to you...something like "i hate to need to bring this up, but with a business of my size, we count on prompt payment to ensure our cashflow is intact....when might we expect payment?" and you could always imply that youll need to charge interest on their past due invoices....we do it on anything more than 60 days out...that seems to help and since its in the agreement there isnt much they can argue about. you never want to give away the work (i.e.file for permits or deliver it to them) until their account is fully up to date. ALWAYS get a retainer and hold it until the end. hope this helps! good luck.
Assuming you are in contact with your client, why don't you just call your client to remind them to pay you... I think having your secretary call instead of you calling personally sets a different tone... they can blow off your secretary, but they can't necessarily blow you off...
I always feel that payment is this subject that no one ever wants to talk about with their clients... being frank with them at the beginning is incredibly important. If you are frank with them about payments from the getgo, calling them to remind them to make a payment should not be an issue... waiting 30 days is wayyy longer than I would ever expect.
One more thing:
Clients want to see results. Sitting in one client meeting after another revising/reworking floor plans and looking at the same or slightly different renderings/models isn't the way to get paid... Invoicing them after something has actually been accomplished is always the better way to go... In other words: invoice your clients after major milestones- whether or not they occur in the beginning or in the end of the design/construction process. Don't do a bunch of renderings and schematic plans, have your clients feel as if you are all still digging to find "the solution" and invoice them just because you need to get paid for the work. Sure- you must get paid; but making your client feel that the work you do has actually led to progress is the reason for why they will want to pay you... I'm not a psychologist, but it seems as if clients pay out of satisfaction rather than necessity. If you have to have the conversation about whether or not they are satisfied, then you are doing something wrong...
This won't help with your current situation, but for the next time, inoculate yourself as much as possible from exposure to non-paying clients as you can. Over 20 years in (small) practice, I've found that 90% of payment issues come at the end of the project. A certain kind of client gets my last invoice, and announces that they weren't happy with some aspect of the project, or of our services (typically they've never mentioned the problem previously), and therefore they're not paying the invoice.
1. Structure your contract so that you pay back the initial retainer in such a way that you have little/no exposure during construction. I set this up so that I pay back the retainer in increments, and so that the amount of the retainer due back at the end of the project equals 1/2 of our fees during CA. So that when my last invoice is for $x in fees, with a final credit of the same amount for that retainer repayment. There's nothing like the look on a scheming client's face when they realize they can't screw me.
2. I've actually put in a clause that requires both owner and architect to immediately raise any performance or other issues of unhappiness at the time that they occur. The idea being that if something had to be litigated, so if they ambush me with a complaint about something from 6 months earlier, and if the issue went to court, the arbitrator/judge/etc will see that they had an obligation to inform me of the issue at the time it happened, cutting the legs out from their justification for non-payment.
3. As mentioned above, put in the contract that you won't release construction documents, or sign of on DOB close out paperwork, unless their account is current. And include language that the owner is solely responsible for any added costs that are the result of delays due to non-payment.
4. Your contract should state that you have the right to stop work if an invoice is not paid in full within 30 days.
5. Invoice every month, even if it's for a small amount. When you don't invoice for 3 months, you're increasing your exposure.
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.