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View Full Version : For web developers... clients that won't pay.



TRF
02-11-2008, 12:36 PM
I was contracted to do a job, make a specialized web application. people sign up, are mailed a confirmation/activation link, and can then view certain records. Job took about 25 hours of programming and DB design. They contacted me in august, had hosting problems, and finally got me access to their server in mid December. I finished the job about two weeks ago and asked for payment. For two weeks they ignored my request by "forwarding" my request to the proper department. Now they say they can issue my check "sometime in the next 30 days".

Oh, and they want me to add another feature to the application I've already written.:rolleyes:

I know there are a few freelancers here. How have you handled situations like this?

westofyou
02-11-2008, 12:46 PM
I bill net 15 days, and I won't touch code for revisions until I get full payment.

Plus with the BS you're getting I'd demand 50% up front for revisions.

IslandRed
02-11-2008, 01:01 PM
I've been lucky. In my two primary side gigs, the people I'm working with are people I've known a long time and they're the same people who write the checks. No issues.

You said "contracted to do a job" -- was there a contract? Did they ever sign anything at all with respect to typical issues like copyright, delivery, payment expectations etc.? I'm just trying to think ahead to your options if they try to stiff you. Having said that, a lot of companies use net-30 as a default method of Accounts Payable if there's nothing stating otherwise.

Ditto on what WOY said -- gotta get paid for the original job before you talk updates.

TRF
02-11-2008, 01:38 PM
I've done work for them before, and I've known their webmaster for about 15 years. This was all verbal, and last time I was paid pretty quick. But that was three years ago. The bad thing for me is this was a big check ($2500) and I really need the money. I'm considering demanding my code back, but I don't want to burn any bridges.

They are a very prominent business in my community, and can really get me a lot of business. I'm rather conflicted right now.

TRF
02-11-2008, 01:40 PM
Most of the freelance work I do has always been for an acquaintance. I never had to get into too much in to knowledge about accounting procedures and terms. What is Net 15 or Net 30?

RedFanAlways1966
02-11-2008, 10:01 PM
What is Net 15 or Net 30?

Full payment is due in 15 days (Net 15) or 30 days (Net 30). Usually a good idea to state/show this upfront and have an agreement signed.

TRF
02-12-2008, 10:30 AM
got it. Because this was for a friend, i never took that into consideration. the scope of the job should have made me re-think that part of it. I really should take a few business courses. The web stuff I can handle ok. dealing with getting paid, I'm not so good at.

That and I need to stop doing jobs for .org's. They tend to not pay as well.

redsmetz
02-12-2008, 10:47 AM
I'll concur with what others have said. On my consulting work, I'm now asking for a down payment (I just sent a client an invoice for $500 down on a proposed job that could go up to $1800).

Another job I had last year, we started with a down payment and worked it off. Keep in mind what you need for the little quick calls. I made clear to the client (in writing) that those calls would be subject to a nominal minimum, plus travel costs would be included when I had to go to their site.

I just dropped a client late last year who abused that. I did some consulting for them 15 years ago or so, getting them out of a $15,000 lawsuit which didn't take a lot of time - I think my whole consulting fee was about $250 (it was very simple to make these balance due bills go away). He begged me to make my invoice $500 and say I was giving him a half price discount because his boss would have a fit over my invoice. I've told him over the years, if you call me for advice, I have to charge you - it's how I make my living and other folks pay me for my expertise. Last year, he called about some technically aspect of shipping and I took about 15-20 minutes walking him through the freight nomenclature, etc - it was going to save him thousands of dollars on orders going to WalMart - I told had to send him a bill, as I had advised him before. I got a voicemail from him about how upset his boss was and that the boss thought after 20 years of doing business, I could do this favor for them. A $45 bill to a $20M+ company and they're smacking me for helping them save some money. I didn't need that headache anymore for such a paltry sum.

It's always best though to get some advance so you're not out of pocket.

Likewise, 30 days are very common terms and, frankly, in some cases, you're lucky to get that. One of the biggest changes I've seen since I've been in business (1979), is the change in payment terms. Some are 45-60 days. I'm fortunate to have a couple of my retainer accounts place me on "net upon receipt" terms instead of their usual 45 days.

Good luck.

TRF
02-12-2008, 11:01 AM
Redsmetz, thanks for the info. I really need to start putting all my terms in writing. Oral agreements while binding in Texas are vague, especially when you think you have an understanding but rally don't.

redsmetz
02-12-2008, 11:15 AM
Redsmetz, thanks for the info. I really need to start putting all my terms in writing. Oral agreements while binding in Texas are vague, especially when you think you have an understanding but rally don't.

In a preceeding with the old Interstate Commerce Commission some years ago, I quoted Samuel Goldwyn who once said "An oral contract isn't worth the paper it is written on". Now, the truth is, as I understand it, that's not necessarily the case in the law (I'm not a lawyer), it's always best to put it in writing.

It's something I'm always advising clients with their transportation agreements. I've told several sales reps for trucking companies when they indicated they'd only use provisions in their Rules tariffs in extreme situations, I'd tell them then get rid of the item if they weren't going to use it (or exempt my clients from its provisions). In writing, is always best.

And I'd recommend, if you can afford it, to have a lawyer look over your terms and agreements.

TRF
02-12-2008, 12:08 PM
Is there a site ( I suppose there is) that has standard contracts for services rendered? I'm thinking I need to step up the professional agreement aspect of my dealings with clients. I don't want anything to overwhelming, just something that protects me and states what I'm doing, and spells out payment terms.

nate
02-12-2008, 12:52 PM
Is there a site ( I suppose there is) that has standard contracts for services rendered? I'm thinking I need to step up the professional agreement aspect of my dealings with clients. I don't want anything to overwhelming, just something that protects me and states what I'm doing, and spells out payment terms.

I just write "Net 15 days" on my invoices.

In my line of work, I usually get sent some hardware so I typically keep it until I get paid. I really don't care about their policies not paying for "x days"; that's total crap. They needed their project by the day they said they needed it, I delivered, pay me.

westofyou
02-12-2008, 01:07 PM
I just write "Net 15 days" on my invoices.

In my line of work, I usually get sent some hardware so I typically keep it until I get paid. I really don't care about their policies not paying for "x days"; that's total crap. They needed their project by the day they said they needed it, I delivered, pay me.

Yep, I always tell clients that they can't hang on their standard payment policies when they are dealing with independent contractors, that doesn't fly... it can work for a company that sits on capital and long credit line, but the independent operates in a 30 day cycle of cash in and cash out. It would be nice for the folks looking to cut costs by going to the independent to recognize that they should accelerate the payout.

I'd even go as far as creating a system lock on any programing if the capability existed.

But the way to avoid it all is spec out the work and have the client sign off on to, any changes after that are looked at as a CR and have to be priced to reflect that new change. That sets precedent for any future requests (which there usually are tons of) Time is money, programing and managing this stuff is hard, they should pay for it. Otherwise attempt it themselves would be my suggestion to them.

TRF
02-12-2008, 01:49 PM
Yeah, it looks like I really screwed the pooch on this one. I have no doubt I'll get paid, but now I'll do a better job making sure I get paid when I want.

My wife suggested that I pull the project off their server until I get paid. I considered this, but I want to keep them as a client. But then she wants to be paid for the hours I ignored her while working on it. :)

redsmetz
02-12-2008, 02:46 PM
Yeah, it looks like I really screwed the pooch on this one. I have no doubt I'll get paid, but now I'll do a better job making sure I get paid when I want.

My wife suggested that I pull the project off their server until I get paid. I considered this, but I want to keep them as a client. But then she wants to be paid for the hours I ignored her while working on it. :)

I'd still follow up with your contact and explain that you can't have this in their standard 30 day payment window. Follow up in writing.

The bulk of the work I do is overcharge claims recovery - we get the money back, payable to our clients and we send them our invoice for our portion (usually half) - so we're sending them an invoice for $500 with a $1000 check. Those are the ones that are galling when they get Past Due - I ask them how many other invoices they get with twice as much money included. I've moved a couple of clients to authorizing us to deposit the money and sending them their portion.

Usually you can work with folks, but you've gotten some good input from everybody to fine tune your operation.

acredsfan
02-12-2008, 10:28 PM
got it. Because this was for a friend, i never took that into consideration. the scope of the job should have made me re-think that part of it. I really should take a few business courses. The web stuff I can handle ok. dealing with getting paid, I'm not so good at.

That and I need to stop doing jobs for .org's. They tend to not pay as well.
It definitely seems like it would be beneficial for you to go through some business and contract law and financial and managerial accounting classes. I'm in Finance right now at UC, and let me tell you, they are very beneficial.

You could do things to help get payment faster like adding discounts for paying quickly. Although in your case that might not be worthwhile. Something like 2/10 net 30. That means you expect payment in 30 days, but the 2/10 says that if they pay within 10 days they get a 2% discount. Again, with smaller projects thats not really going to be worth while, but basically the first number is the discount, and the second is the term in days that the discount will be offered.

Written contracts are definitely the way to go. Even though oral contracts are legally binding, they are not usually very easy to back up. If you do continue to do oral contracts, recording the terms and everything would be recommended.

On a side note, you have to be careful with contracts. One real example that my professor showed us was a case where a man made a drunken promise on a napkin to sell his house. It was ruled a legally binding contract because he was coherent enough to write and sign it.

gonelong
02-13-2008, 12:21 AM
I demand 25% of estimate before I start coding anything, and this is one of the first things I tell them.

I discuss payment terms upon completion, and I send them an itemized estimate (via email so we both have a record of it) of what they can expect to receive.
1. Registered Domain name (www.blahblah.com)
2. Hosting/Email Setup (gonelong@blahblah.com, etc.)
3. Submission to search engines (yahoo, google, etc.)
4. 9 Pages (Home, About us, etc.)

Total Cost: $1500
25% pre-payment: $375
Due upon completion (net 30): $1125

Hosting billed quarterly @ $25/Month
Additional Development - $50/HR, Image Manipulation - $75 HR

I send this with the message that I will start development upon receiving the 25% payment and an indication that these terms are acceptable.

Not been screwed a single time since I started doing this.

Have also done the 2/10 or Net 30 deal, though mostly the money I make on the side is funny money for me.

I made a deal with the wife that I would do 90% or more of the work after she retired for the evening. Easy deal on smaller projects, but a bit of an issue on larger ones when I basically on have 2-3 hours at night to work on them. I generally don't take projects I suspect will go more than 30-35 hrs or so.

We still get to spend our evenings together and I make some pretty easy disposable income for things like TiVo, a laptop, finished my basement one year, a home theater projector, downpayment on a car, a vacation one year, and the occasional bump to the Roth IRA.

I generally clear from $2000 to $10000 a year doing this, though more often than not its closer to the $2000 figure. I have built up enough clients that I can generally make the $2000 just working with them which is fine by me. I meet one client quarterly because he wants to have beers at BW3's with me. The other clients all interact via email with me. I pretty much take no calls or meetings and work in my PJs while watching TV.

Best. Side-job. Evah.

GL

redsmetz
02-13-2008, 06:40 AM
TRF, as an aside, don't forget to set aside some of that money for taxes. At work you're getting taxes withheld, but you'll need to make quarterly payments to the IRS if you're going to owe (you get a bit of a free pass the first year if you've paid in what you're previous year's taxes were; otherwise, you could end up with a penalty). Even now for me, since I incorporated about ten years ago, I have a savings account that I put withholding taxes into each week so they're there when I have to send the tax payment in. If you're self-employed, keep in mind you'll also have to calculate in the Self Employment Tax (Social Security) which is the same as the SS percentage plus the employer match, although half of that amount is deductible off your income (of course, consult a tax adviser).

TRF
02-13-2008, 10:17 AM
I demand 25% of estimate before I start coding anything, and this is one of the first things I tell them.

I discuss payment terms upon completion, and I send them an itemized estimate (via email so we both have a record of it) of what they can expect to receive.
1. Registered Domain name (www.blahblah.com (http://www.blahblah.com))
2. Hosting/Email Setup (gonelong@blahblah.com, etc.)
3. Submission to search engines (yahoo, google, etc.)
4. 9 Pages (Home, About us, etc.)

Total Cost: $1500
25% pre-payment: $375
Due upon completion (net 30): $1125

Hosting billed quarterly @ $25/Month
Additional Development - $50/HR, Image Manipulation - $75 HR

I send this with the message that I will start development upon receiving the 25% payment and an indication that these terms are acceptable.

Not been screwed a single time since I started doing this.

Have also done the 2/10 or Net 30 deal, though mostly the money I make on the side is funny money for me.

I made a deal with the wife that I would do 90% or more of the work after she retired for the evening. Easy deal on smaller projects, but a bit of an issue on larger ones when I basically on have 2-3 hours at night to work on them. I generally don't take projects I suspect will go more than 30-35 hrs or so.

We still get to spend our evenings together and I make some pretty easy disposable income for things like TiVo, a laptop, finished my basement one year, a home theater projector, downpayment on a car, a vacation one year, and the occasional bump to the Roth IRA.

I generally clear from $2000 to $10000 a year doing this, though more often than not its closer to the $2000 figure. I have built up enough clients that I can generally make the $2000 just working with them which is fine by me. I meet one client quarterly because he wants to have beers at BW3's with me. The other clients all interact via email with me. I pretty much take no calls or meetings and work in my PJs while watching TV.

Best. Side-job. Evah.

GL

I'm hoping for about $2000-4000 per month. Like I said, the market here is thin for developers. I was thinking of charging for SEO based on ranking after say 6 weeks. Using agreed upon search terms, $25 for every term on page 3, $50 for page 2, $100 for page 1 with an additional $100 if it is the #1 listing


TRF, as an aside, don't forget to set aside some of that money for taxes. At work you're getting taxes withheld, but you'll need to make quarterly payments to the IRS if you're going to owe (you get a bit of a free pass the first year if you've paid in what you're previous year's taxes were; otherwise, you could end up with a penalty). Even now for me, since I incorporated about ten years ago, I have a savings account that I put withholding taxes into each week so they're there when I have to send the tax payment in. If you're self-employed, keep in mind you'll also have to calculate in the Self Employment Tax (Social Security) which is the same as the SS percentage plus the employer match, although half of that amount is deductible off your income (of course, consult a tax adviser).

I've worked on the side for a number of years, and the taxes haven't hurt too much, but it is something I have to pay more attention too.

Oh as an update to my current situation, I have sent multiple e-mails to my contact and his boss asking for half now. So far not a single reply. nice.

TRF
02-14-2008, 05:35 PM
well, I reached out to my friend, and his response was I should have expected this. I was prepared for that. What came next however caught me off-guard.

Paraphrasing here...

"We'll try to get you paid in the next 20 days, but it could be longer."

Now, this has me a little hacked. This wasn't the easiest application to write. Plus there were a ton of delays on their part. I should have been done in December. I'm to the point of demanding my product back, but I really need this paycheck.

damned frustrating.

nate
02-14-2008, 06:20 PM
well, I reached out to my friend, and his response was I should have expected this. I was prepared for that. What came next however caught me off-guard.

Paraphrasing here...

"We'll try to get you paid in the next 20 days, but it could be longer."

Now, this has me a little hacked. This wasn't the easiest application to write. Plus there were a ton of delays on their part. I should have been done in December. I'm to the point of demanding my product back, but I really need this paycheck.

damned frustrating.

OK, so if they have a problem with the application you will "try and get it resolved in the next 20 days, but it could be longer."

pedro
02-14-2008, 06:23 PM
OK, so if they have a problem with the application you will "try and get it resolved in the next 20 days, but it could be longer."

yup.

Sorry this is happening to you TRF.

I have my own company and do some web development but mostly client/server stuff and I always try to get as much money up front as I think I can get away with.

Don't be afraid to make people pay for support either or they'll just torture you for ever.

The maxim I always like to use is if you hear my voice, read my words or see my face you better expect to see an invoice shortly after.

TRF
02-14-2008, 07:03 PM
my wife's more pissed than me. we have a trip to Dallas next weekend. My 9 year old is going to a ballet convention. This money was supposed to pay for that.

Ltlabner
02-15-2008, 05:32 PM
my wife's more pissed than me. we have a trip to Dallas next weekend. My 9 year old is going to a ballet convention. This money was supposed to pay for that.

Good luck with this TRF. Sounds like some business classes might be a good investment for the future.

Don't ever be shy about going after the money you've earned. You can't be an ass about it, but you have every right to firmly and professionaly make it clear that you want your money.

I used to be loathe to discuss the price of my products. 13 years ago I'd get all nervous and even lower my voice when discussing price. Now, hell, my products are good, we're helping the customer solve a problem and my technical knowledge is worth every penny of what we are charging.

Like I said, good luck.

TRF
02-15-2008, 06:18 PM
I used to be loathe to discuss the price of my products. 13 years ago I'd get all nervous and even lower my voice when discussing price. Now, hell, my products are good, we're helping the customer solve a problem and my technical knowledge is worth every penny of what we are charging.

Like I said, good luck.

I'm that way too. I really hate talking money, and sometimes feel ashamed of what I want to charge and end up doing it for a tenth of the price I know I can get. That has to stop. I'm doing a site right now that will be combining what could have been 30 websites into one. I'm charging $150 because it's for a friend, but he didn't explain the broad scope beforehand, so he knows he's getting a deal. I need to stop doing jobs for friends and get actual clients.

Ltlabner
02-15-2008, 09:23 PM
I really hate talking money, and sometimes feel ashamed of what I want to charge and end up doing it for a tenth of the price I know I can get. That has to stop.

Yea, I understand. You obviously have some tallents or else people wouldn't seek out your services. There's no shame in being compensated for your tallents and effort.

OldRightHander
02-16-2008, 12:54 AM
It happens in my line of work too. Since I went independent I have had a couple freight brokers take forever to pay for a load I delivered. I have found that offering a discount in exchange for quicker payment usually works. With me, it's important to get paid fast because one run's pay is the next run's fuel money.

justincredible
02-19-2008, 12:32 AM
Where do you guys find these side projects? I wouldn't mind getting into some stuff on the side to start saving for my upcoming first home purchase and wedding.

pedro
02-19-2008, 01:25 AM
Where do you guys find these side projects? I wouldn't mind getting into some stuff on the side to start saving for my upcoming first home purchase and wedding.

You might try craigslist

gonelong
02-19-2008, 09:32 AM
Where do you guys find these side projects? I wouldn't mind getting into some stuff on the side to start saving for my upcoming first home purchase and wedding.

We put up a our own website, worked to get it ranked well in Google/Yahoo, and let the leads pour in from our site. We had 2-3 sites we had already done so we made a portfolio page out of that.

If you live in a large metro area, this might not work for you. If you live in a smallish midwestern town ... BINGO!

GL

TRF
02-19-2008, 10:31 AM
I'm trying to go GL's route. That takes some time though. It does help if you can put up a portfolio of your work. Other than that network as much as possible.