Unpaid invoice

[JTM]

Does anyone have any experience/advice on what to do if a customer isn’t paying up? There isn’t any dispute, but the invoice is a month overdue and they’re ignoring my emails and phone calls. Not sure what to do from here!

Thanks.

[gpuss]

Yes! Plenty! They fall into three categories: (1) those who are generally honest but not very well organised; (2) those who willingly disappear into the shadows in an attempt to avoid payment; and (3) those who have a genuine grievance about the quality of your work/deadline-meeting etc.

Judging by the fact that they are ignoring you, I'd lean towards the second, although you can't rule out the first. If they are not happy, they should have let you know by now and either asked you to redo it or given you a good reason for their dissatisfaction. The fact that they have not is good news for you as they would find it difficult to claim this retrospectively.

I wouldn't get too worried about payment being a month late, as that seems about normal these days, but the failure to respond would make me send them one last message threatening legal action and setting a rigid final payment date. If there is no response or timely payment, go to Money Claim Online, which sounds like one of those daytime TV accident compensation advertisers but is in fact a streamlined HMCS web-based small claims service. You'll have to pay costs (I think it was in the region of £30) but that will be added onto the bill for the client to pay, so you wouldn't be out of pocket. If they choose to contest your claim it will go to court, but I doubt if most solvent companies would go that far unless it's a significant amount of money.

The worst-case scenario is that they have gone into liquidation, in which case your options might be limited.

[JTM]

Thank you, gpuss - this is very good advice. I'm pretty sure there's no grievance with the quality of work as they gave me a second job and praised the work I did. I'd like to think they are just not very well organised, but the lack of communication from them points to avoidance.

I sincerely hope they haven't gone into liquidation as I have another invoice due to send them this week for a second job I did for them!

Thanks again.

[gpuss]

Oooh ... so you did one job, then a second and now you're invoicing for the first? (I.e. they have never paid you?) You should probably chase this one up pretty urgently. Do you have a postal address / landline number or was it all done online?

Actually, one of my non-payers had actially moved house and Money Claims Online traced him down pretty quickly.

Please let us know how this goes.

[JTM]

I did one job and sent off an invoice with 30 day terms. Then I did a second job, but I've not yet invoiced for that as I'm waiting for the author to answer some queries.

Payment was due at the end of December (after 30 days had passed), and I've emailed several times and left phone messages.

I followed your advice and decided to give them one last phone call before I went down the claims route. Anyway, my contact refused to come to the phone but this time at least passed a message onto the receptionist to say a cheque will be posted at the end of the week. I get the impression I annoyed them by having the audacity of not getting it when I'm being ignored, but tough - I'm a sole trader and can't afford to give out free credit. Looking forward to seeing how the next invoice goes ...

[toom]

I've been on both sides of this situation - as a freelance and as a commissioning editor. In my experience the problem with the one month rule is that invoices have a habit of sitting in people's inboxes for a while, at various points in the accounts process, but cheques tend to be signed off monthly, so it's very easy to miss the monthly window

Imagine the following situation:
Cheques for invoices are signed by the MD/accountant on the 1st of each month. You email in your invoice on January 20th. Your contact lets it sit in his inbox for a few days before signing it off and passing it on to his boss. His boss saves up all the invoices to do at once, and doesn't sign it off for a week and a half, by which time it is February 5th. This means the cheque won't be written until the next month's sign-off date, March 1st. This is just before the weekend, so the cheque doesn't reach you until March 5th. It's been about a month and a half.

Now imagine another situation:
This time, your contact gets your email on January 20th but totally forgets to process the invoice. He doesn't even realise this until you send him an email on February 25th. He checks back, realises he's buggered up, and signs it off immediately. But it still sits in his boss's inbox for a few days, by which point it misses the March 1st sign-off date and the cheque doesn't get written until April 1st. By which point it has been about 2 months, you're getting desperate and bombarding your contact with emails, but he's ignoring them because he doesn't want to have to admit he's buggered up.

It's amazing how often this situation arises. The problem is, there's little reason for companies to change their habits - they're just keen to have the money sitting in their account earning interest for as long as possible.

[gpuss]

... interest ...

You'll have to remind us what that is.

[JTM]

Well, it's happened again. Same company, second invoice - now three weeks late. The first one got paid eventually (it was six weeks late), but only after a lot of harrassment on my part.

Needless to say, I won't be working for this company again. They don't pay very well anyway - a lot of work for not much money and a whole load of hassle.