Help with problem customer.

[David Hammond]

1 word. DEPOSIT.

Sure try and invoice him, but what you going to do if yhey don’t pay?

[Steff Davison]

Dont waste any more of your time with this lead, its dead. Send him an invoice for your work, I presume you have sufficient proof he placed an order.

If he doesnt pay take him to small claims court for your money. Claim the full value of the job.

Good luck.

[Rich Cooper]

Thanks for the replies,

thats pretty much my thought process, ive got genuine customers waiting so id rather spend my time with these.

yes i do have the full conversation start to finish as this was done entirely by email.

i will be invoicing him first thing tomorrow.

Thanks again

[NeilRoss]

I agree with David – take a DEPOSIT.

First thing it does is covers you for some of the cost, but it also puts them in a position where they want to get what they have already paid for – as soon as possible. And the only way the are going to get that is by having the job completed. Unless they have an established credit account with you, you should be getting paid the balance before they take possession of the finished job.

Neil

[Phill Fenton]

I use a team of enforcers called the R&R debt collection agency. They will ensure you get paid in return for taking a small percentage of your profits. Nice guys and very presentable

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[NeilRoss]

quote Phill Fenton:

I use a team of enforcers called the R&R debt collection agency. They will ensure you get paid in return for taking a small percentage of your profits. Nice guys and very presentable

Do R&R do the gardening work as well. That’s a tidy looking estate!

[Sean Foster]

quote NeilRoss:

I agree with David – take a DEPOSIT.

First thing it does is covers you for some of the cost, but it also puts them in a position where they want to get what they have already paid for – as soon as possible. And the only way the are going to get that is by having the job completed. Unless they have an established credit account with you, you should be getting paid the balance before they take possession of the finished job.

Neil

This attracted my attention too as I’ve been in a similar position recently.
Could I ask what percentage deposit is generally taken?

I’ve had a situation where I’ve completed a job on a van, asked for payment (as previously agreed) and been told that the customers ‘chequebook is in his other car’. Other than removing the graphics (which could be tricky after he’s driven off) how can you prevent them taking posession? 😕
Fortunately I did get the cheque but it did make me wonder (other than small claims court) what action you could take.

[NeilRoss]

quote Sean Foster:

quote NeilRoss:

I agree with David – take a DEPOSIT.

First thing it does is covers you for some of the cost, but it also puts them in a position where they want to get what they have already paid for – as soon as possible. And the only way the are going to get that is by having the job completed. Unless they have an established credit account with you, you should be getting paid the balance before they take possession of the finished job.

Neil

This attracted my attention too as I’ve been in a similar position recently.
Could I ask what percentage deposit is generally taken?

I’ve had a situation where I’ve completed a job on a van, asked for payment (as previously agreed) and been told that the customers ‘chequebook is in his other car’. Other than removing the graphics (which could be tricky after he’s driven off) how can you prevent them taking posession? 😕
Fortunately I did get the cheque but it did make me wonder (other than small claims court) what action you could take.

I think 30% is fair, but I’ve heard of some taking 50%. I’ve also heard (anecdotally) from garages that they don’t have the legal right to withhold the customer’s car until payment is received. No idea if that is indeed the case or not.

[Martin Cole]

My advice is to write it off and move on.

Use it as a learning curb to always take a deposit.

He may well yet come back..

[Jon Marshall]

Yes, just send him a friendly email saying you need to invoice it and the graphics will be ready to fit when he has time. If you have a chain of emails then he can’t really argue.

[David Hammond]

As a general rule here’s how we deal with ‘walk in’ customers.

Agree a price – Take deposit – Send design – Balance on approval of design – Book in fitting

Your deposit will vary, as a general rule if it’s less than £100 100%, over £100 50%, or at the very least enough to cover the artwork.

Sitting making pretty pictures for every Tom, Dick & Harry that walks through the door doesn’t pay the rent and wages at the end of the month.

[Martin Oxenham]

Don’t take cheques ! Get a credit card machine. Take a deposit usually around £40 on the average van. Don’t Email artwork until you have had a deposit. If you use cards, you can if you want do it all over the phone so no excuse for not be able to come by and see you. Get final payment on the day. Make sure the customer knows this before hand.

[Phill Fenton]

Neil[/quote] I’ve also heard (anecdotally) from garages that they don’t have the legal right to withhold the customer’s car until payment is received. No idea if that is indeed the case or not.[/quote]

I think the opposite is true (at least in Scotland) you are entitled to hold onto the vehicle and not release it until the bill has been paid in full. I’ve had to do this a couple of times but it works wonders

[NeilRoss]

quote Phill Fenton:

Neil

I’ve also heard (anecdotally) from garages that they don’t have the legal right to withhold the customer’s car until payment is received. No idea if that is indeed the case or not.[/quote]

quote :

I think the opposite is true (at least in Scotland) you are entitled to hold onto the vehicle and not release it until the bill has been paid in full. I’ve had to do this a couple of times but it works wonders

As I say, Phill, I’m really not sure if this is the case or not. I’ve been told by a guy who owns a motor repairs business (in Scotland) that they aren’t allowed to withhold the motor until paid for in full. I don’t do vehicles these days but it would be interesting to find out for sure. Would certainly be the way to go if it’s legal.

In the past I’ve seen (on more than one occasion) a business owner have his van dropped off for lettering. When ready for collection (in the knowledge that it needs to be paid at time of collection), they drop off an apprentice to collect it, and shoot off leaving him stranded just at stopping time. The apprentice has been told to pass on the message "John" will be calling in tomorrow to square you up! Oh yea?

[Hugh Potter]

I’ve had this before, even after taking a deposit. In the end I just invoice tham and tell them that the materials need paying for, the balance (the installation labour cost) will be due when they bring in the van to be finished.

[Simon Worrall]

When I had a sign shop in London, I took no less than 50% deposit before I touched a job.
Now I live in a small town in New Zealand, things are more laid back, everyone knows everyone’s business, and it would look very bad for them to be anything less than a paying customer.
Payment terms here are the 20th of the following month and no deposit is ever taken.
So far no problem.
Simon

[Ian Jenkin]

Its very easy to fall into the trap of being too trusting.
I know that first hand.
We’ve had issues with large multi-nationals and small individuals not paying when you would there would be no problem at all.

Rule of thumb for me…

Large Corporates – Order Numbers!
Individuals – Deposit or a card number on file!

[Bob Buchanan]

We always take a deposit. generally 50% depending on the size of the job.
over the years i have found, if they have a problem paying a deposit, they are very likely to have a problem paying in full when the job is complete.
on your own customer, i think the idea of a politely worded email advising that you have to invoice for your time and materials to date would be how i would proceed, if i heard nothing back at that point id just forget about it.

[Paul Hodges]

The deposit approach is sensible, but I would go one step further…

Anyone I don’t know or don’t have a trading history with, I always take full payment before a job.
I’ve found this to be the best approach because it’s bullet proof. You will find out straight away what kind of customer you have. The serious ones pay up without any fuss, the tricky ones don’t come back.

It saves you all that admin time chasing people for the money too. Customers who pay a deposit are also quite often hard to get the balance from, so that’s more time you have to commit to that.

What I have noticed, is that when you get full payment first, no one ever complains about the job you’ve just done, so you have to come to the realisation that pretty much most customers who quibble over payment because they have issues with your work, do it just because they don’t want to (or can’t) pay for it.

I think it’s fair too because when you buy goods from ebay or internet, you pay fully, you don’t pay a deposit, and you don’t know who those sellers are most of the time. At least with a local sign place, as a customer you know exactly who you’re dealing with.

[Rich Cooper]

i think from now on i will be taking a 50% deposit before any work is carried out.

do you guys do any design work at all before taking deposits? if not how do you know what the final price will be? this may sound a daft question but some jobs i do can be on the same model of van but can vary quite a lot is cost, depending on the work/design needed for that job.

Also regarding keeping the vehicle until you receive full payment, ive already ran this idea past a friend of mine who works in litigation, they said this is ok as long as the final value of the job is greater than the value of the vehicle, so if someone was to have a £8000 van designed and fitted with graphics at a value of lets say £250, then you would be breaking the law by keeping said vehicle,

I Hope this helps

[Warren Beard]

100% payment upfront with first order and a completed credit account form if they intent to ask for credit on future orders. This should make sure most of your customers are payers ……

…. I wish I would take my own advice 😉 lol

The problem is that as you grow (well I’m just speaking from my experious and opinion) your client types will change to various degrees. Larger companies sometimes will only deal with companies who give 30 days or more, if you want their work then you accept it but the chances are usually extremely good that you will get paid but will take longer. If cash flow allows this then it’s a no brainer really. Other medium businesses who are "trying" to be big business will often insist on a credit account but in reality can easily do a Bacs or send a cheque with no problems and if they want to use you then they will.

We have the same problem with "estimates" mainly on vehicle graphics because you don’t know what the final price will be if it’s a rough brief but getting some sort of deposit is advised.

To be 100% honest we are too trusting and 95% of the time give credit which then gives the customer the leverage to pay when they want, we try get payment on collection of vehicles or the rare signs that are collected otherwise everything is invoiced on completion with a due date of the same date as the invoice. A week later my system will automatically chase payment if not received yet and usually once they get the chaser email it usually gets paid.

Like most businesses it’s not ideal and we do have a lot of money outstanding at any one time but we generally know it’s coming in on a regular basis, our cash flow is good so we try not stress too much until it’s 30+ days overdue and then they get a phone call.

It’s part of running your own business and the more you do the worse it gets 😉 We do have some plans to try clamp down a bit on this in the future as we have a few big things going. This and HR in my opinion will always be your 2 most frustrating parts of your business 🙂