the contract stated that the initial payment was to be received by jan 20th. Now we're holding all work waiting for them to call us and the $$$ to arrive. Might not be heading to the big meeting next week at the rate things are going.
Any good stories about recalcitrant clients, the pleasures of saying no, and the pain of not getting the dough?
Well first off, any previous history with them to go on? A small fee with an new unknown client is a little different kettle of fish than a big fee from a familiar (and maybe typically slow-paying) client.
I have a good story. One time we kept working for a client who didn't pay, and we ended up losing a lot of money. Then we did it again. Then we did it again. Then we did it again.
My current client is a "slow payer..." our contract stipulates the std. 30 day payment period...then they requested that that timeframe was not suitable to them...so, now it's 60days. But I constantly have to battle with them over +/- 200k over 120 days...
As SandRoad says, this is a "typically slow-paying client". unfortunatelly we have several Large jobs with them which bring in millions in fee each year...do we get paid? yes...slow, but yes.
We've had problems in the past, but having a large retainer that isn't applied until the final payment has helped us not to have to act like their bank.
we're in bed with a slow payer who stiffed us on half the initial pre-design contract a year ago. we should know better with this guy. the contractual payment date was moved 2 weeks forward to accommodate the client. this payment is only 10% of the contract and a six figure sum. we'll issue a standard invoice on the 1st of the month even if we nothing happens...
we're about to notify the land use attorneys that we're putting all work and the kick off meeting (set for next week) on hold. that should rock the boat. lets see how much water we take on!
We have similar issues - large payments, over 200k ea. One guy is a year late, another 6 months - big boy developers, highrises and shit. One guy who does big strip malls said, after we were done, you know I dont think its worth it. Stopped paying around 60%. Then said lets negotiate. Anyways, now we leined him. Its a big pain. Theyre going to make sure that if you want the work, you'll suck their dicks. If you dont, and you sue, you will spend more than you'll get back. Theyre dangerous people.
In most cases, the only real leverage you can use to get the money you're owed is to withhold something the client needs / wants until he forks over the check.
I think we be in for a rough ride over the next couple of years. When money is flowing people tend to pay quicker. When the
news media starts squawking recession....everyone is hanging
onto everything they have for as long as they can, money is money
and the trickle down theory goes into overtime.
I have noticed since the stock market started swinging wildly back
in the Fall that with the Financial Institutions faltering that people
have been slower to pay.
We seem to have our fair share of people on the slow side when it comes to emptying their pockets. However we call, we invoice and
we withhold things and we always write into our contracts. If payment has not been made for work complete, it is our option to stop working on the project until the client is current with the account.
We also tack on interest and invoice is due ten days from time of
arrival, instood of thirty days. My oil company does the same thing
to me so why shouldn't I be able to do it to my clients. I have yet
to have anyone complain about payment except one time. The
client was not a nice person, payed me but has been know to burn
a number of contractors and other professionals so I have refused
to work for him again, just because I know I will be burned sooner
or later when dealing with fire.
The company I used to work for did over $70,000 worth of work for this retail client, basically helping them set up there new CD template for their new concept. Got two store CD sets out the door, then the company promptly went bankrupt. We never saw that money. The firm wasn't so big, so it was a pretty good chunk o' change not to be getting.
In response to mdler's request for stories of clients paying, I have one.
My little division in my huge firm is working on a pretty big project (size wise) for some pretty hot shots developers (or so we think). Apparently, they don't like to review and pay our invoices. They just send us checks for $50,000 a month. It doesn't matter if we billed them for substantially less, they just keep giving us 50k. No. Matter. What. Oh oh and get this, they make the checks out to the project manager. Our accountant has had to call numerous times to request that they pay the correct amount and make it our to our firm and not an individual team member.
Sometimes clients don't pay because they are confused about invoices. Rather than waste their time on trying to understand the invoices, they may set them aside and not approve them for payment.
The lesson is to make the invoices as clear as possible. It sounds simple, but make sure that you're invoicing to the right contract, contract amount, etc. Attention to detail is key. It also helps to add a description or letter to the invoice to explain the general state of the project or anything that might look odd to the client.
The easier you make it for them, the more likely you are to get paid. In n_'s case, it's probably the easiest for the client to pay a flat fee per month.
more stories of getting paid. . . . we were spending much more in CA than expected. contract stipulated visits every other week but were performing observations every week- this was discussed as several OAC meetings and determined (with the blessing of the owner) that we should be there every week. long story short, we more than doubled our CA fee (~$300k more) in the end and got some extra for the schedule extension, the client loves us and we keep getting more work from them.
quizzical, yes the client is a developer...a newly formed (last 15 years) Billionaire. They are Hotel/Building owners and developers. Not sure how that makes a difference...
We constantly make light of the fact that the guy lives in a 18m Oceanfront mansion (15k sf) and his property taxes alone are enough to pay several salaries in our office...
Our invoices start simple, but because of the way this client operates...we end up with a base contract and 11 add. serv. contracts.
In contrast client #2 always pays on time (or sooner) but will hold payment on hundreds of thousands for an $11 Fed-Ex which he does not recognize the recipient...so we have to send him (and this crazy guy reviews it himself...not some accountant) the back-up info of when it was sent, who requested, who signed, at what time...
Client #3 who is another nuveau-riche douche, asked if he could pay our fees and finance his million dollar (3k sf) office with his Amex Black (of course he took it out...wow!! I was impressed) when that did not go well, he paid in full up front "who do I make out the check to?"
With regards to the current financial situation...I started a thread under prof. pract. about the slowdown, which went no-where fast. Fortunatelly we are well diversified, and a good majority of our clients are foreign doing work in the US or Abroad. not to say people are not nervous, but there seems to be alot of money out there still.
The rich get richer, while the poor will get a $600 refund check in a few months!!!
the client called this morning and was very, very apologetic. said that my boss agreed to accept paper check and hold it until funds are available and that he agreed to proceed.
my boss (who is traveling on the otherside of the planet right now) first said to me 'yes, go'. He had forgotten that on tuesday that he had asked us to hold. then he said 'don't go', then ' maybe go' and then finally 'don't execute consultant contracts, but start the design process'.
he also said 'keep schedule the same' twice, then finally 'should we delay'.
*sigh* my head was spinning, so when my project architect had to call him about the following item, I asked for the verification what we were doing or not doing.
now I'm working on a proposal in the meantime for renovating a civic building in suburbia.
but we had a good firm wide design meeting over lunch for the project and identified several critical issues with the site and program that all can derail the project from ever getting build. so I may be the barer of difficult news to the client...
I hope I'll not be in that position when I own my own practice.
Maybe you could spend each day calling your client and leave messages, this would sure to get him irritated and contact you back. If not, then take him to court. You have the contract, I'm sure you'll win.
keep in mind that one of the primary triggers for E&O claims is overly aggressive efforts to collect an unpaid invoice - especially if the relationship is rocky already.
moral of the story: always get a retainer from developers!
even without any funds, the project is moving forward and we're having a big meeting in a few days. my boss seems to think we'll get paid, but other projects have landed in the same boat before and no $$$.
Well, its not my cash on the line, yet.
I've certainly learned what not to do next time I write a contract.
Jan 29, 08 6:56 pm ·
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when the client doesn't pay....
the contract stated that the initial payment was to be received by jan 20th. Now we're holding all work waiting for them to call us and the $$$ to arrive. Might not be heading to the big meeting next week at the rate things are going.
Any good stories about recalcitrant clients, the pleasures of saying no, and the pain of not getting the dough?
Well first off, any previous history with them to go on? A small fee with an new unknown client is a little different kettle of fish than a big fee from a familiar (and maybe typically slow-paying) client.
I have a good story. One time we kept working for a client who didn't pay, and we ended up losing a lot of money. Then we did it again. Then we did it again. Then we did it again.
anyone have any stories about clients paying?
My current client is a "slow payer..." our contract stipulates the std. 30 day payment period...then they requested that that timeframe was not suitable to them...so, now it's 60days. But I constantly have to battle with them over +/- 200k over 120 days...
As SandRoad says, this is a "typically slow-paying client". unfortunatelly we have several Large jobs with them which bring in millions in fee each year...do we get paid? yes...slow, but yes.
J3 ... they're developers ... right ?
We've had problems in the past, but having a large retainer that isn't applied until the final payment has helped us not to have to act like their bank.
Janosh -- that sounds like a really smart idea. Any suggestions how to get extract a retainer from a typcial client?
we're in bed with a slow payer who stiffed us on half the initial pre-design contract a year ago. we should know better with this guy. the contractual payment date was moved 2 weeks forward to accommodate the client. this payment is only 10% of the contract and a six figure sum. we'll issue a standard invoice on the 1st of the month even if we nothing happens...
we're about to notify the land use attorneys that we're putting all work and the kick off meeting (set for next week) on hold. that should rock the boat. lets see how much water we take on!
lien lien lien lien lien
We have similar issues - large payments, over 200k ea. One guy is a year late, another 6 months - big boy developers, highrises and shit. One guy who does big strip malls said, after we were done, you know I dont think its worth it. Stopped paying around 60%. Then said lets negotiate. Anyways, now we leined him. Its a big pain. Theyre going to make sure that if you want the work, you'll suck their dicks. If you dont, and you sue, you will spend more than you'll get back. Theyre dangerous people.
make sure that the clients dont bond around the lien....
some thoughts on the matter from AIA:
Getting Paid For What We Do
Getting Paid! What Architects Should Know
Communication: Key to Compensation
In most cases, the only real leverage you can use to get the money you're owed is to withhold something the client needs / wants until he forks over the check.
make 'em an offer they can't refuse.
there is always this solution...
the problem with architects is that we will suck dick, not get paid for it, and continue to suck
I think we be in for a rough ride over the next couple of years. When money is flowing people tend to pay quicker. When the
news media starts squawking recession....everyone is hanging
onto everything they have for as long as they can, money is money
and the trickle down theory goes into overtime.
I have noticed since the stock market started swinging wildly back
in the Fall that with the Financial Institutions faltering that people
have been slower to pay.
We seem to have our fair share of people on the slow side when it comes to emptying their pockets. However we call, we invoice and
we withhold things and we always write into our contracts. If payment has not been made for work complete, it is our option to stop working on the project until the client is current with the account.
We also tack on interest and invoice is due ten days from time of
arrival, instood of thirty days. My oil company does the same thing
to me so why shouldn't I be able to do it to my clients. I have yet
to have anyone complain about payment except one time. The
client was not a nice person, payed me but has been know to burn
a number of contractors and other professionals so I have refused
to work for him again, just because I know I will be burned sooner
or later when dealing with fire.
dude people didnt pay fast even in the good times. Its the power of scale, and the curse of cash flow.
What about bosses who don't pay... (I'm talking to all you 1099ers)
"Does your architect look like a bitch??"
architects dont pay either..........................
The company I used to work for did over $70,000 worth of work for this retail client, basically helping them set up there new CD template for their new concept. Got two store CD sets out the door, then the company promptly went bankrupt. We never saw that money. The firm wasn't so big, so it was a pretty good chunk o' change not to be getting.
In response to mdler's request for stories of clients paying, I have one.
My little division in my huge firm is working on a pretty big project (size wise) for some pretty hot shots developers (or so we think). Apparently, they don't like to review and pay our invoices. They just send us checks for $50,000 a month. It doesn't matter if we billed them for substantially less, they just keep giving us 50k. No. Matter. What. Oh oh and get this, they make the checks out to the project manager. Our accountant has had to call numerous times to request that they pay the correct amount and make it our to our firm and not an individual team member.
I love that story, n_.
Sometimes clients don't pay because they are confused about invoices. Rather than waste their time on trying to understand the invoices, they may set them aside and not approve them for payment.
The lesson is to make the invoices as clear as possible. It sounds simple, but make sure that you're invoicing to the right contract, contract amount, etc. Attention to detail is key. It also helps to add a description or letter to the invoice to explain the general state of the project or anything that might look odd to the client.
The easier you make it for them, the more likely you are to get paid. In n_'s case, it's probably the easiest for the client to pay a flat fee per month.
DCA has some good advice. keep it simple, stupid.
more stories of getting paid. . . . we were spending much more in CA than expected. contract stipulated visits every other week but were performing observations every week- this was discussed as several OAC meetings and determined (with the blessing of the owner) that we should be there every week. long story short, we more than doubled our CA fee (~$300k more) in the end and got some extra for the schedule extension, the client loves us and we keep getting more work from them.
quizzical, yes the client is a developer...a newly formed (last 15 years) Billionaire. They are Hotel/Building owners and developers. Not sure how that makes a difference...
We constantly make light of the fact that the guy lives in a 18m Oceanfront mansion (15k sf) and his property taxes alone are enough to pay several salaries in our office...
Our invoices start simple, but because of the way this client operates...we end up with a base contract and 11 add. serv. contracts.
In contrast client #2 always pays on time (or sooner) but will hold payment on hundreds of thousands for an $11 Fed-Ex which he does not recognize the recipient...so we have to send him (and this crazy guy reviews it himself...not some accountant) the back-up info of when it was sent, who requested, who signed, at what time...
Client #3 who is another nuveau-riche douche, asked if he could pay our fees and finance his million dollar (3k sf) office with his Amex Black (of course he took it out...wow!! I was impressed) when that did not go well, he paid in full up front "who do I make out the check to?"
With regards to the current financial situation...I started a thread under prof. pract. about the slowdown, which went no-where fast. Fortunatelly we are well diversified, and a good majority of our clients are foreign doing work in the US or Abroad. not to say people are not nervous, but there seems to be alot of money out there still.
The rich get richer, while the poor will get a $600 refund check in a few months!!!
TK - Any news on the payment front?
TK - Any news on the payment front?
the client called this morning and was very, very apologetic. said that my boss agreed to accept paper check and hold it until funds are available and that he agreed to proceed.
my boss (who is traveling on the otherside of the planet right now) first said to me 'yes, go'. He had forgotten that on tuesday that he had asked us to hold. then he said 'don't go', then ' maybe go' and then finally 'don't execute consultant contracts, but start the design process'.
he also said 'keep schedule the same' twice, then finally 'should we delay'.
*sigh* my head was spinning, so when my project architect had to call him about the following item, I asked for the verification what we were doing or not doing.
now I'm working on a proposal in the meantime for renovating a civic building in suburbia.
but we had a good firm wide design meeting over lunch for the project and identified several critical issues with the site and program that all can derail the project from ever getting build. so I may be the barer of difficult news to the client...
I hope I'll not be in that position when I own my own practice.
Maybe you could spend each day calling your client and leave messages, this would sure to get him irritated and contact you back. If not, then take him to court. You have the contract, I'm sure you'll win.
sue em'
just had to tell a client to fuck off
keep in mind that one of the primary triggers for E&O claims is overly aggressive efforts to collect an unpaid invoice - especially if the relationship is rocky already.
it's a pisser, eh?
moral of the story: always get a retainer from developers!
even without any funds, the project is moving forward and we're having a big meeting in a few days. my boss seems to think we'll get paid, but other projects have landed in the same boat before and no $$$.
Well, its not my cash on the line, yet.
I've certainly learned what not to do next time I write a contract.
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