An additional thought on this. I know business is tough these days and work
somewhat hard to get....but....as Steve noted, it's about the contract....if
they aren't playing by the rules they agreed to (because they're big and
you're not), perhaps you don't want to continue doing business with them.
I've been self employed since 1992. I have stuck by one overriding rule:
If we can't look each other in the eye, shake hands on an agreement, then
live by that, I refuse to continue to do business with them. Yes, it's cost
me some business. But it's also lowered my stress, heartburn, and ulcer
rate.
I also build late payment penalties into my contracts, which I've had to
enforce on a few occasions. And if they balk at signing a contract with
late payment penalties, ask them why. Do they plan to pay late??!! It's
your prerogative to enforce collection of a late payment fee. If they
notify you the payment will be late, you can choose to allow that without a
penalty.
Of course, as Steve says, it never hurts to schmooze the AP department a
bit.
Either way, it's about respect and honesty. Obviously they don't respect
you enough to honor their contractual agreement with you.
Al
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Today's Topics:
1. working with IT Services firms (Jim Franz)
2. Re: working with IT Services firms (Steven Keil)
3. Re: working with IT Services firms (Ken Shields)
4. Re: working with IT Services firms (Carl Asplund)
5. Re: working with IT Services firms (rob@xxxxxxxxx)
6. Re: working with IT Services firms (John Myers)
7. Re: working with IT Services firms (Booth Martin)
----------------------------------------------------------------------
message: 1
date: Sun, 14 Jun 2009 14:54:58 -0400
from: "Jim Franz" <franz400@xxxxxxxxxxxx>
subject: [Consult400] working with IT Services firms
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
------------------------------
message: 2
date: Sun, 14 Jun 2009 15:55:05 -0400
from: Steven Keil <skeil@xxxxxxxxxxxx>
subject: Re: [Consult400] working with IT Services firms
My former career involved administering Accounts Receivable at IBM for
may years and I had some big accounts. I carried this into my
business when I went solo. The biggest blessing of the experience was
learning the skill of speaking openly about about money. As a result,
collections are part of my normal part of my business.
You don't say if this is a sub job or direct for them. If you are a
sub contractor, don't involve the client unless it's critical (greater
than 90 days or they may go out of business). This is between you and
the contracting firm.
First thought: It's owed. It's in the contract. No apology, you are
just reminding them of the agreement they signed. Approach it from
this fact.
Second thought: You've allowed a precedent to develop. You will need
to think ahead and plan a meeting to remind them of your terms and
what will happen if they continue to ignore them. If you tell them
consequences and don't follow through, you will be ignored in the
future. (The only way to change a habit is to be up front about it.
My experience tends to tells me it will take about 90 days to change
their habits/process.)
You don't need to be loud about this, just persistent and follow up
the day after terms are not met (example- call on the 31st day if no
check in that days mail.)
Here is an example of how I handle local accounts:
On the 31st or whatever day, call. I offer to drive by and pick it
up, since it should be ready. Make friends while you are there or on
the phone. AP people are used to getting negative calls. Be
friendly, but firm. (I've even brought them a small gift for the dept
like a small box of chocolates or something small). It must be
sincere- You don't use people and it need not be a confrontation.
Once you have a relationship, you may find your invoice rises to the
top of the pile to be paid or you have a friendly face to speak to
next time it's delayed.
Just a few thoughts.
Steve
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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