Re: working with IT Services firms -- CONSULT400

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 "walk 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

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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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