Re: working with IT Services firms

If Jim hadn't told us that this firm was a LARGE firm, I would have
recommended a different tact. You can deal with a small firm in the
manner that both you and Al Caswell recommend in your postings. Large
firms tend to not operate in a personal manner! Large firms also have
CFO's and lines of credit to smooth over fluctuations. Many CFO's are
judged by their "cash flow days" ... which they manage by promptly
collecting receivables & putting off vendors. His problem MAY have
nothing to do with the health of that business!!!

In Jim's posting, I got the sense that he felt that he felt that he
was captive to the situation. I wanted to ensure that he got the
message that he does have rights ... and that an agreement is only as
good as the people who are involved. In any event, a contractor with
only one revenue source is at peril ... especially today!

I should have asked Jim if the employees of this firm were having
their paychecks delayed ... if so, then he should work with them as
you advocated ... if not, then I stand by my opinions!

While I've rarely used 1099 contractors, I've always wanted to treat
them as I would want to be treated. More often than not, I've given
them more consideration than what was in our agreements. The last
contractor that we worked with was feeling some financial heat. While
our agreement said that he would get paid when we got paid, we chose
to pay him as soon as he handed in his time sheet (bill to us) for the
week.

Booth ... back in the CPF0000 days, we were often at the opposite ends
of the political spectrum. Hey, conservatives occasionally DO have
hearts (grin)!

When people are "embarrassed by their situation", they tend to cover
things up. This creates an unhealthy situation. While I don't
advertise our firm's cash balances, we do put a graph on the wall each
week that shows this year's YTD revenue by week vs last year's vs our
goal. We do this for each business unit and the company as a whole.
This gives people a sense of "how things are".

I'm proud of my Motor Vehicle industry staff who are operating at 10%
over 2008 levels! The reason we are doing well in a down market is
due to a customer non-payment situation of about 8 years ago. In 26
years, there are two situations where we haven't collected 100 cents
on the dollar from our customers. Both were situations where we knew
that we were taking a risk & managed it accordingly. Several years
after one of those situations, the company's then-CEO started another
(much more successful) company. When they needed systems, we were the
only choice that they considered ... because he remembered the
consideration that we showed him when he was down. Today, he is
featured in Business Week!

Rob ... we do work with our customers ... but we don't want to be
taken for granted as I'm afraid is happening with Jim.

It's a long life & a small world ... live your life that way & life
will be much simpler!

John
Strategic Business Systems, Inc.
www.sbsusa.com
jmyers (at) sbsusa.com

On Mon, Jun 15, 2009 at 11:25 AM, Booth Martin<booth@xxxxxxxxxxxx> wrote:

Times are tough this year.  Lots of companies are feeling stresses they
have never felt before.  Yes, there are the deadbeat firms out there,
and yes, there are also firms about to fail.

But there are also a whole lot of firms out there who are hanging on by
their fingernails and who are mightily embarrassed about their cash
position.  Most of these firms will survive.

I would suggest that shared miseries are ties that bind.  If you like
these people, this could be an opportunity to develop a life-customer
who will stand by you when you need it most.

If you like this outfit and want to continue with them you made need to
be flexible.  They have needs, but so don't you.  Honest talk is
important.   You need to be careful in talking with the customer, but I
am curious if the customer is also paying slow?   That might make a
difference in your choices.





John Myers wrote:

Jim,

I assume that you are spending 100% of your time working with this one
firm ... it sounds like you have an "undiversified revenue portfolio"
... many 1099's are in this situation!

When my company was a startup, I had one account that was a deadbeat.
After I followed much of the steps that others had offered here as
advice ... I told the deadbeat that I would be back when they had a
check for me ... and went on to work on other projects.  Usually about
a week later, that check would materialize & I would shift some of my
time balance back to the deadbeat ... until they got slow with me
again.

Soon, I had enough work to hire other people and eventually
decommitted from the deadbeat to support my employees in accounts who
paid regularly.

I understand that you might not be looking to be a boss ... but you
are facing a challenge that many 1099's face in that you have only one
source of revenue with zero commitment that it will continue!  You are
in a situation similar to the Enron employees ... who only owned one
stock ... and it imploded.  Anyone who is slow-paying 1099's  in this
economy is either in danger of collapse or is a scumbag who feels that
they can exploit their 1099's!  Neither are good for you ...

If I were an IRS auditor, I suspect that you would be deemed to be an
"employee" of the contracting firm ... because you don't seem to be in
control of your destiny (no matter what your contract says)!  That may
be useful for leverage as you look ahead!  Check out:
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

The company who you are "contracted with" appears to have breached
their agreement with you.  As such, your sense of obligation to "live
within that agreement" may be suicidal to you.

I'd strongly encourage you to "vote with your feet" and look for other
sources for 1099 work ... so that you have either an alternative
source of revenue or a source of leverage to get them to pay up.

Please feel free to contact me, off list at jmyers (at) sbsusa.com or
at the phone number below, if you want to talk about this in more
detail.

John

John Myers
IBM Certified Specialist - IBM PowerSystems for i Technical Solutions Design
IBM Certified Specialist - Advisor for e-Business
President and CEO
Strategic Business Systems, Inc.
17 S. Franklin Turnpike, Ramsey, NJ 07446  USA
E-mail: jmyers (at) sbsusa.com   Phone: +1 (201) EASY 400   x131
Web:    http://www.sbsusa.com      Fax:   +1 (201) 934-5684

Free Sports League Management - Powered by PowerSystem i
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Get and route intelligence from your IBM i web site - WebSurvey/400
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    http://www.VehicleSystem.com

On Sun, Jun 14, 2009 at 2:54 PM, Jim Franz<franz400@xxxxxxxxxxxx> wrote:

How does one deal with the large IT Services firms when they become very delinquent in paying invoices?
For many years I've only dealt direct with a customer.
Now working for a large firm. on 1099, have a contract (their contract)
for payment xx days after billing, regardless of whether they have been paid by end customer. But they are regularly 30 days beyond that.
I send reminders, called, and occassionally get a check, but never catch up.
Do I tell the customer?
Does it take having a lawyer?
In 25 years I've never walked out on a customer's project.
jim

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---------------------------------
Booth Martin
http://www.Martinvt.com
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