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Dealing with late payments
Morning all,
I have an existing client who I’ve done a number of vans for. From memory the first couple of vans were paid fairly promptly but from that point I’ve been waiting around 3 months on payment for subsequent vans.
Emails for payment are always ignored and when they are finally paid it always comes with "I have two new vans to do, when can you book them in?"
I’ve got to be honest, I have enough work to not worry about this customer but I’m not one to turn away work and to be fair to him he has always paid, eventually.
Just wondered how you would handle this situation?
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16 Replies
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Anyone that messes me about like that, I just wouldn’t deal with, especially if you have enough work anyway. Don’t encourage these idiots.
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Yea I would just tell him straight. We’ve changed to pro-forma on vans for all customers. Just tell him you don’t have time to chase up payments etc.. and it’s slowing you down.
Ball is in his court then. -
id be telling him its payment upfront in future.
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We use Thomas Higgins for people like this. A letter before action is £3 plus vat. Every time that I have been forced to use their services, we soon hear from the Client. Late payers & non payers are what causes most companies to fold, I don’t want to be one of those
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Companies like that tend to pay those that shout the loudest. I wouldn’t give up on what could be a decent customer with ongoing work. I would simply keep the pressure up to ensure payment is made. Send out a reminder after 30 days and follow up with phonecalls and further emails. No need to involve outside debt collectors. Some of my "Best" (i.e most lucrative) customers are late payers that pay eventualy
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Send them the pro-forma for the two new vans.
If they question it, point out they’ve repeatedly paid late and you will no longer be providing credit facilities to them, but are happy to continue to provide their signage.
We reduced the amount of credit accounts we had, and haven’t looked back. The ones we do have we keep a tight control of.
We credit check customers who ask for credit.
We only give credit to customers who order regularly, and of a reasonable value. No point raising and invoice and waiting 30+ days for £30, and they come every 12months.
If the orders over £100, we expect a minimum 50%. If it’s under £100, then 100%. Nothing get’s booked in, no materials ordered, and nothing produced until then… yep we’ve fallen foul of that before.
Customer needs it doing urgently, they can pay quicker.
Make it normal, automatic, to ask for money. There’s no shame in it. If they don’t like it then alarm bells should ring.
We’ve taken deposits on job’s over £10k without them batting an eye, and have some customers pay on their own personal cards and reclaim the expenses back from their employer.
We’ve found it to be greatly beneficial, for cashflow, and even scheduling of jobs, the pro’s greatly outweigh the cons in our experience.
** That’s not say all our credit accounts pay on time, the majority do, and as Phil says, the ones that take a little longer are worth the wait as they spend big amounts with us.
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I had one of these customer, always took about 3 months to pay. At the end of last year I did 3 vans for them and they failed to pay with me eventually threatening with court, they still wasn’t interested in paying so I took them to court and won. They eventually got in contact and paid just before it goes against their name.
It took 9 months to get payment including the court time.
I no longer deal with the customer and from that point I take 50% up front.Lesson learned
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Thanks for the replies, plenty of differing views.
I think this guy will be pro-forma going forward. It may put him off initially as I’m guessing cash flow is a problem for him. We’ll see..
I don’t feel the need to charge clients upfront. 95% of the time people pay on time, I’ve never had a problem in 6+ years operating like this. Also I find once I’ve received the cash upfront I’ve lost interest in the job. Knowing I have to do a good job to get paid keeps me on my toes.
Of course jobs over a certain amount with a high material cost I usually take 50% deposit upfront to reduce any risks.
That’s a useful bit of info about the letter Vince, thanks. I’m sure I’ll be needing that one day, hopefully not any time soon tho
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quote Daniel Evans:I had one of these customer, always took about 3 months to pay. At the end of last year I did 3 vans for them and they failed to pay with me eventually threatening with court, they still wasn’t interested in paying so I took them to court and won. They eventually got in contact and paid just before it goes against their name.
It took 9 months to get payment including the court time.
I no longer deal with the customer and from that point I take 50% up front.Lesson learned
That’s my worry with him Daniel. I’m guessing cash flow is a problem for him, it’s only a matter of time before it comes to a head and I don’t want to catch that hot potato
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Clients should pay before hand. Full stop.
Ask yourself a question: who gives you credit? And what they do when you don’t pay? -
We are now getting asked for signage that’s paid for in monthly instalments.
Who’s the idiot who started that game :bangshead:
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quote Denise Goodfellow:We are now getting asked for signage that’s paid for in monthly instalments.
Who’s the idiot who started that game :bangshead:
That’s nearly as good as the person I heard telling their partner to buy them an engagement ring on finance. Great way to start a marriage.
How they finance their sign/business isn’t my concern, looking after my own business is.
There are companies who provide retail finance, so you get your cash and they take on the risk.
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quote James Boden:Emails for payment are always ignored and when they are finally paid it always comes with “I have two new vans to do, when can you book them in?”Excuse me, is he blackmailing you with non payment unless you do another two vans?
That is creepy and rude. Totally unacceptable, he sort of has you in an armlock.
Or did I get that wrong? -
quote Simon Worrall:quote James Boden:Emails for payment are always ignored and when they are finally paid it always comes with “I have two new vans to do, when can you book them in?”
Excuse me, is he blackmailing you with non payment unless you do another two vans?
That is creepy and rude. Totally unacceptable, he sort of has you in an armlock.
Or did I get that wrong?Hi Simon, no. He pays his last invoice late and then asks for more work to be done.
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These people are always present with a signmaker. I won’t refer to them as customers, more like time bandits. They feel the need to constantly be one up, if they owe you, they’re winning. I think they regard it as a game, nothing personal. Their car crash business model is always facing some sort of crisis with creditors, inland revenue or vat. They never have any genuine complaint for non payment or reasonable excuse. Yes, they throw you a bone at the last minute to pacify you & more importantly, keep you supplying their needs at your expense. Other than our regular suppliers, have you ever tried to get goods or services from anywhere without being invited to get your debit card out?
We’re expected to give up our time for design for free, buy all of the materials required, produce the work & install it. Then they enjoy the benefits of it while we sit patiently waiting for them to do the decent thing & pay the bill.
I think credit terms should be discussed openly at the beginning, not an embarrassed mumble halfway through the job. Back that up with a written quote containing your terms which must be accepted in writing. A deposit of 40 or 50% is quite reasonable as we provide a bespoke service & after beginning the work, materials are rendered useless to anyone else. Problem with a deposit? There will be a bigger one at the end. If the wheels are falling off their business, make sure its not at your expense, nobody needs customers like that. -
Eeeerm….. Exactly what Kevin says ^^^
We unfortunately caught a cold a couple of times in the early days with non payers, mostly down to my naivety but since then we have been very strict on deposits and payments.
Regardless of who they are, first job is pro forma.
Anything to do with vehicles is 50% down and 50% when they collect the vehicle.
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