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Ask Slashdot: How To Collect Payments From a Multinational Company?
An anonymous reader writes "I run a small dev shop focused on web development, based in Europe. For the past six years we've had lots of successful projects with clients from CEE, Western Europe and the U.S. One of our main clients was based in the U.S. We started working for them in 2008, while they were a 'promising start-up' and everything went smoothly until they were bought by a multinational corp. We couldn't be happier to work for such a big player in the market, andwe even managed to get by with huge payment delays (3-4 months on a monthly contract), but now, after more than two years working for them, I have the feeling we're getting left out. We have six-month-old unpaid invoices and we're getting bounced between the E.U. and U.S. departments every time we try to talk to them. What can a small company do to fight a big corporation that's NASDAQ listed and has an army of lawyers? They've been getting a lot of bad press lately so I don't think that will scare them either."
Seems to work in other situations.
Name and shame.
And point out that they're costing jobs by not paying invoices.
So there I was, scribbling down some notes off the PC screen by hand, when I reached for the keyboard and Ctrl-S'd.
I guess it's Nokia.
Send them an invoice with the maximum late payment penalty that the law AT BOTH SIDES allows, with a giant red statement that they're half a year late, and send it it to the person responsible, with a clear explanation of how much each increased payment delay costs.
If they delay you even one month beyond that, send a new invoice with the expected increase, and cc: it with a copy of all the others you've sent to the person responsible, their manager, accounts receivable, and the office of the president.
StoneCypher is Full of BS
The anti-union types will hate this idea, but STOP WORKING FOR THEM!
If you're essential they'll find a way to pay you.
Three Squirrels
... grow some cojones and when requesting help on Slashdot, name the freaking company. The odds are that some of the people reading this thread either work for them or know someone who does. If you're not willing to stand up, we can't show you how to box.
Support microSD: in a post 9/11 world, it is unwise to carry your data on media that you cannot comfortably swallow.
Your contract should have stipulated payment terms and periods. If they are defunct on a payment, it is within your rights to garnish that amount from their accounts (you will need a court order to do so). Once you've issued the invoice, they must pay you.
But what it comes down to is that the next step is to talk with a lawyer, which you should do today or tomorrow. Delaying any longer will only hurt your case.
tl;dr lawyer up
have an attorney in the usa draft them a letter asking for a simple explanation along with a detailed sequence of events.
this will mean they will ask their own attorney to give a response.
their own attorney will tell them they better avoid legal issues over a startup purchase. how would google look if it didnt pay off youtube debt holders when buying the site?
File a lien against them, and make sure you inform Dun and Bradstreet of the lien.
They do business in EU, as do you. The solution should be obvious. Drag them into court.
Shut down the service, revoke the licenses and stop supporting them. Give them a final warning to be fair and send it to every contact you have with the company.
I've been in IT at a major corp and had a supplier that I worked with personally come to me due to non-payment. I had to go pretty far up my chain of command before I found someone who would apply pressure to finance to pay up on the contract that they signed and approved. Had I not been there to facilitate it would have taken even longer, if they got paid at all. The supplier was international so they got a runaround. Wish I had a better answer, but finance depts sometimes like to collect interest on their bank accounts even at the expense of the company's reputation.
for them until you've been paid in full and then say good bye. Such "customers" are of no use. They drain attention away from your business that can be (and should be) going into something more productive than chasing old bills...
They're done with you. Might as well sue them now, start to document everything assuming this will end in court. Sue their local operations, often those are cash poor but I'm assuming you invoice is a rounding error to them.
You should have put teeth into your terms as soon as the big corporation got involved. 1%/day late payment. Back then they might have needed you badly enough to agree.
Now you are at mercy of the courts.
What ever you do, don't take their web sites down. Then they will own you.
The multinationals internal IT is bad mouthing you. They will almost certainly screw up replacing whatever you are doing. That won't help you at all, but might make you feel better.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Find a tentacle close to you and say that you have to pay rent so sadly you're going to have to sue said tentacle. Take an an onion and maybe a friendly, competent, but not-massively-expensive lawyer.
In the UK, any invoice not paid for 21 days beyond the agreed date renders the non-payer liable to liquidation. Liquidating clients is not great (though you should have acted on your credit control rather sooner) but I once had to threaten a major banking client with it and at the end of a memorable Friday I got my very very overdue money and my client got itself a new head of accounts, and I found that I had a few powerful friends inside the company amongst those pleased with my work for them.
6 months is technically known as "taking the piss".
Stop doing any further work until you get some sort of staged payment started, or start legal action. If you're entitled to the money and you take it slowly and gently and without grandstanding, you may well get it, and may even keep the client.
Start credit control earlier in future: that's your responsibility to limit damage.
Rgds
Damon
http://m.earth.org.uk/
STOP WORKING FOR PEOPLE WHO DON'T PAY YOU!
i know.. it should be obvious. but it's clearly not to you guys.
Really? This is /. I would hope that you already knew this was coming.
Plus, then you wouldn't have to worry about payment processing fee, at least not for a decade or so.
What can a small company do to fight a big corp that's NASDAQ listed and has an army of lawyers?
Irrelevant.
...after more than 2 years working for them I have the feeling we're getting left out,...
"Left out"? As in never getting paid?
If you are concerned that you will never get paid and they're having business issues, then you must do whatever you can to collect on old invoices, cease doing any further work for them until they are caught up and then cash only after that. If they don't like it; fuck'em. Let them bleed someone else - like your competitors.
Customers like these will ruin your business and you're better off without them.
http://en.wikipedia.org/wiki/Lien
It might be too late and you'll need the assistance of an attorney familiar with international contracts. But the next time the board of directors flies that company jet into St. Moritz, its yours.
Have gnu, will travel.
I am not a lawyer. You need a lawyer.
You need to talk to a local lawyer that understands your local claim which hopefully you can file locally and then who can get advice from counsel in the US about local enforcement.
You have to decide whether doing business with them is worth it. If sales to this company is necessary, start raising your price to factor in the cost of the hassle factor. After you have done so you can then offer then a %deduction in price for 'early' payment. Early payment being standard Net 30 or whatever. So raise the price 20%, then offer them a 10% discount for early payment at Net 30.
replace there web page with one saying web site down due to nonpayment.
Keep in mind that this is a huge bad sign. Either they don't have the money, they are too disorganized to pay some small fry, or they are just bad people. Any which way that is not how to run a business.
A potentially similar sign came shortly before the big sub prime disaster. A guy had money in a Big Euro Bank money market fund which, in theory, will return your money in about 24 hours. So a really good deal came up on a house (house prices were about to crash but hadn't yet) and he needed a big down payment of a million dollars. So he goes to his guy and says, "Withdraw a million." the guy invokes some obscure clause and says NO. He freaks out and then demands all his money. They say they can delay something like 30 or 90 days and they do. So it turns out to be fortunate and he misses out on the house and eventually gets his money. But when I told this to a person I know who is a huge trader he just told me I was wrong wrong wrong, the Big Euro Bank was probably the most sound bank in the world and that they were old and had a huge reputation and wouldn't screw someone like that in a million years. He went on to say my money market friend was probably lying to cover up the fact that he was out of money, not the bank. Needless to say that bank went right to the brink and without government intervention would have died.
The take-away is that either the people who are handling your account are incompetent, are mean, or that you now have a valuable insight into a company on the brink.
If you are providing ongoing work, use that as leverage. Inform the client that work will cease until they are current, this is VERY effective if there are open issues that the client wants fixed.
You could also send them an invoice along with a letter stating that the invoice is overdue and will go into collections if not paid within 30 days. You should be able to find a collection agency pretty easily, many of them work by buying the debt from you at ~25 cents on the dollar. Many companies will try to avoid collection as it will impact their D&B rating.
Do what thou wilt shall be the whole of the Law - Aleister Crowley
Do everything by snail mail.
If you talk to people over the phone/casually about it, confirm it with snail mail.
Clearly mark your time to payment terms on your first bill.
Send your recall bills by registered mail, if they are late, send in the monkeys (lawyers/debt collectors).
You will find they will react quick if you do it by mail, they do not want to be seen to have black marks for credit reasons.
However it is normal for corporates to take longer to pay up. (Though funnily they want you to pay their bills within 14 days)
Bills can go through various dept. as each dept. needs to mark it against their internal budget before they get checked off by an accounts dept.
I call it the corporate washing machine. wash, rinse, spin dry.. . 30 days to 6 weeks is reasonable though for extremely large corporates.
Pieces of dead tree still hold a lot of power.
Are you still working with them / do you want to continue working with them? If so, the approaches you might take may well be different to those if you were "just" after your money.
I've not idea where you live, but it's worth being careful that breaching a contract yourself (such as failing to provide services which you are obliged to provide) is not excused on the basis that the other party is not complying with its obligations — unless your contract says that you can stop providing services if you have not been paid, simply ceasing to do so might put yourself in breach. But consider what the risk is to you, if the company really is that far behind in payments to you.
Depending on where you are, how about a letter before action — that, unless you are paid, you will take legal action? Depending on the sum you are owed, you might have a route through a local small claims procedure, even a money claim online — if it's a case of a project manager causing delays to try and stretch their budget, this approach might just get it before the company's legal team. If you've got as strong a case as your summary suggests (that might be a big "if," of course), it may be in the company's interests just to settle, to avoid litigation; you may just be looking for their legal department to put a boot up the backside of the relevant business unit to stop messing about and get it paid. If no response, go to court seeking default judgment, or perhaps see if local laws support you applying for the company to be wound up on the grounds that it is not able to meet its liabilities as they are due — even if you do not want to wind the company up (you want your money), it can take something as drastic as this to get someone to sit up and take notice.
Some companies publicise their CEO's details — try looking for those, and writing directly. Else, write a snail mail letter to the CEO's office, or the head of legal, explaining the problem succinctly, and asking that they personally attend to getting the matter fixed.
If you have no other way in, contacting them via Twitter might work, even if they are already receiving bad press — as long as you are polite and accurate, could it do anything but help at the cost of a few (more minutes) of your time?
Many lawyers will offer a free / fixed fee initial consultation — if nothing else, find out how much they would charge to take your case. Push for a fixed fee; you'll pay more for the certainty, but you will have certainty rather than billable hours which are harder to control. If the cost of getting a lawyer involved increases the likelihood of recovery sufficiently, you'll get less overall than you were hoping for, but that might be better than nothing.
There are fixed procedures for collecting payments, and they differ from country to country. Just follow that, and they normally pay just before it goes to court. If you have doubt if they can go bancrupt before they pay you, insist on prepayments for all further work.
It depends mostly on what's in your contract. Not just one clause, but many different things. Read and understand the contract before you do anything else, including stopping work.
Suing a multinational is not hard, but you really have to understand your position first. And if you did a poor job negotiating the contract then you have no one but yourself to blame.
You had strict payment terms in your contract like net30 right?
You need to understand that vendor abuse is the modus operandi of large multinational corporations.
I used to work for a 30B DJIA company, and during my tenure there, during the 2000's first recession, they started pushing back terms on all of their vendors. First it went from 30 to 45, and when the vendors didn't complain much, they took it to 60... still no major complaints, as the larger vendors were happy to take the business from smaller vendors who couldn't afford to loan us millions for months at a time.
Then it went to 75.
Then to 90...
Then to 115...
When I left the company in 2010, they had pushed standard vendor terms out to 120 days, with plans to go to 180 by the end of 2015. This is how some VP was making his bonuses - by constantly pushing out due terms and increasing "cash flow."
The moral of this story is, this big multinational doesn't give a shit about ever paying you. They know there will be zero consequences if they don't. If you sue them, they'd rather pay their lawyers to tie you up in court forever than to pay you what they owe. Their credit rating will not be affected by your lawsuit, or your report to D&B, because as a smaller company, D&B doesn't give a shit about you, either.
You'd be best to just cease working for them and write off the balance owed as uncollectible debt. You will never see a dime of it once you stop delivering. They will be happy to string you along and dangle carrots on sticks in front of you to keep you working, but seriously, just do yourself a favor and stop it.
What you need to do is to go onto Slashdot and ask for legal strategy advice.
Seriously, they are 6 months behind and you keep sending them completed work?
Stop sending them code until they pay up. If they drop you then sue
I dealt with this, myself. I worked as a hired gun for a very large TV marketing company in the US that decided they didn't want to pay me for my work as a developer. I regular ol' lawyer got me paid in a matter of hours (minus his cut, of course) by contacting their legal department. They were clearly wrong, and didn't want to spend more than a few minutes' of their legal time looking into it, so I was paid the same day my attorney first contacted them. It was for an amount in the low 5-figures.
Of course, I didn't want to have to pay an attorney every time I wanted to get paid for a job, so I quit working with those kinds of companies.
I don't respond to AC's.
This is not legal advice until: I go to law school, graduate law school, become licensed in your jurisdiction, and confirm your retainer check had cleared.
Talk to a lawyer to determine where they can be sued. If you provided code to them, revoke the license to use/distribute that code and inform them of that. File a copyright on that code. Then sue them for piracy, breach of contract, fraud, promissory estoppel, unjust enrichment, etc. Once you get a judgement, seize assets, have the court find the corporation in contempt, lock up the officers. Have a blue police box wait for a few people who can help. Essentially, go to war.
Fight Spammers!
For several years, I also ran a software business in Europe. When we started, our attorney had one bit of advice: never take a customer in the USA. We made exactly one exception, out of good will, and - sure enough, we regretted it.
If you are not based in the USA, it simply isn't worth the hassle and the risk. If they don't sue you (screw your contract, they'll sue you in a US court, which will claim jurisdiction using the long-arm doctrine), they'll screw you (as you are experiencing).
It doesn't help you in your situation, you're already there. However, for anyone else who may not yet have taken the plunge, don't. Ethics and law in the US reminds me of adventures in third world countries - it's just as dishonest and corrupt, only with prettier window dressing.
Enjoy life! This is not a dress rehearsal.
I feel your pain. Solution: Pretend to be on good terms with them. Get yourself involved in a critical new project, then halt abruptly right when they need your work the most. Offer them an ultimatum - either pay up all the outstanding money or you are walking. After a brief round of bluffing, you will be surprised at how fast your bill gets paid.
then you stop providing services to them. It's as simple as that.
They're probably terrorists. You should report them to the FBI, and let them sort it out.
Seriously, multi-national? That's code for evil terrorism. You'll be doing a duty to America.
STOP GIVING THEM UNPAID WORK! One of two things has happened here:
1. They can't or won't pay you. By refusing to work anymore you're effectively cutting your losses by not giving them more work that won't be compensated.
2. They have their heads up their ass. They want to pay you, but they can't figure it out. In this case, not working will light a fire under their ass and they'll pay you.
Moving forward, make sure that your contract contains a late payment fee. Also, make sure it specifies who is responsible for paying you and who will be held responsible for non-payment. GET A LAWYER INVOLVED TO DRAFT THIS NEW CONTRACT. Don't try to do it yourself, it won't work.
In any case, if they don't pay you within the month then you need to talk to a lawyer about suing them.
-1 disagree is not a modifier for a reason. -1 troll, flaimbait, redundant, overrated are NOT acceptable substitutes.
There are international collection agencies for this sort of thing. It costs about 20% of the amount collected, but it may be worth it. Check out the collection agency thoroughly; there are outfits on the web that claim to be international collection agencies but really just broker bad debt. Find a company that actually has their own staff in the target countries.
Irish law on debt is particularly severe. If you can go after them in Ireland, that's a good option.
Best advice my old boss gave me just before I left Big Corp to be a freelancer:
"Find the person (individual) in Accounts Payable who will actually process your invoice, and make friends. Show the person a sample of your invoices and ask if it is in the format they prefer. If not, alter the invoice till it is easiest possible to process (if necessary, split it in two to get amounts below the authorisation limits for the person you are doing work for so that it doesn't have to be escalated unnecessarily). Then when you have done work, and have prepared the invoice, get it signed off, and take it to your friend in Accounts Payable and hand it to them, or at least put it on their desk. Buy flowers or chocolates for this person on their birthday and Christmas, and whenever they have helped you, if they can accept such. At the very least be friendly, polite, and respectful. This approach not only sharply increases your chances of getting paid on time, it also means that when you don't get paid, you have an insider that you can ask what went wrong, so you can put it right."
I have used this approach at many clients, and it really helps.
"Cock Up Your Beaver" does not mean what you think. This sig is intended to clog filters and annoy do-gooders
On the few occasions bills have not been paid on time I've emailed my contact at their company to ask them why the invoice has not been paid. I outline clearly which invoice it is, what goods the invoice is for, how many months overdue it is.
This is always done politely. No threats, No bad language.
Always get a good response and often an apology. The bill is typically paid or the personal responsible for paying it is chased by my contact and then the bill is paid.
Sounds like you need to work out which part of the main company your customer's company was purchased by. That part is the part that is legally liable for the invoices. Start there. If email doesn't work, get on the phone. At all times, be polite. Do not raise your voice. Do not make threats. Do not use bad language. Just make it clear you're not happy and you would like the problem resolved as soon as possible.
If you must resort to making threats, make sure you can keep them and that you intend to follow through with such actions.
If they are based in the UK you can ultimately approach Companies House to have the company wound up for non-payment of it's debts. This gets the attention of the company officers - they will respond to such action. This should be your last resort.
Several basic principles here, do what we do:
First: No payment == no work Pick one of their major projects that you are working on. Let their management know that work on this is coming to a halt until payment arrives, in full, as you need to pursue other work to pay your bills. Make sure you say it politely, with statements, frequent calls, etc.
Second: Credit impact You are extending them credit, e.g. loaning them your money when you agree to be paid later. Stop doing this. Let them know that late payment will result in an inability to work for anything but prepayment going forward. That you value their business, when they pay.
Third: Prepayment For us, all invoices projected to be above a set amount are subject to a structured payment term. You can't imagine the howls of protest we get for this, but we stand firm, and point out that if the entity in question is at or near bankruptcy, this is the only way you can even consider providing them with product, as you have to bear the risk that they will never pay, and you cannot easily charge them for that risk. They all, and I mean every one of our customers, eventually concedes this point. We set a limit of $50k USD for this, above which we require partial prepayment. Moreover, we offer a discount for pre-payment.
Fourth: Quote language and pricing Make sure you have pricing for prepayment, rapid payment, ontime payment, late payment, and very late payment on your quote. In doing so, you take away any excuse that they didn't know it will cost them more to pay late. Note that these are finance and late penalty charges for lateness, and discounts for early payment.
What you do is to set up a case where it becomes in the customers own best self interest to pay you early and in full, with a full understanding that they will pay you more if they pay late. You cannot let these principles go, cannot let them get negotiated out. They are non-negotiable.
Further, when negotiating contracts, never under any circumstances, blindly accept onerous terms and conditions. Note in your quote that you will simply reject all such terms and conditions on any PO out of hand. Further, on your quote, indicate that a PO not honoring your terms and conditions will be rejected without any further consideration. Otherwise you get POs from purchasing groups which substitute their T&C for yours, and do so with their payment terms. This is non-negotiable. You can negotiate over T&C contents, but it helps to have a simple non-onerous example ready. Start from yours and work with them if they need to modify. If they demand arbitrary and capricious terms, deny them that. If they refuse, this is bad business, and walk away.
Seriously, it is very hard for smaller companies to walk away from crappy business. But you have to if you wish to survive.
I work at a big multinational, and sometimes getting our people to pay bills on time can be a major pain. The company is like a cat playing with its food when it deals with smaller companies. It always prefers to leave money sitting in a bank account collecting interest for as long as possible if it can avoid paying bills on time. I think on big contracts, the delay tactics may actually earn enough people to fully pay for the people doing the delay tactics. So, what works? The company won't easily agree to contracts with useful penalty terms for late payments if it can avoid it. Their legal department is large, and yours is less so. So, they can give you all sorts of reasons to leave that sort of thing out. Apparently, you don't have solid penalty terms in your current contracts either, so you may be facing a similar issue. first, always make sure you contracts have clear due dates and penalty terms, to the extent that you can still get the work. If your terms are that one second late means the price goes up from $1000 to $10 billion, nobody will sighn your contracts, but you do have a lot of room to add teeth. When the big company pushes back in negotiation, you may need to add some flexibility, or reduce the penalties. Try to keep them in some form if you cans till get the work.
But, what happens when you desperately need the work, and they have convinced you that penalty terms in the contract are simply unacceptable? When you send the invoice, add the magic terms "X% discount if paid by date Y." Negotiate all your contracts high enough that you can afford a discount later on. Don't negotiate the discount. Leave it out of the contract. Just add it when you send the invoice. That discount is the fiscal flanking maneuver. It's their opportunity to get free money if they follow your rules, and it throws the delaying strategies out the window. The freelancers who use this strategy with the big company I work for apparently have their invoices rise to the top of thepile, and consistently get paid more quickly.
You can't unilaterally add penalties. You can't be sure that legal action will work in your favor, or that t will happen quickly enough. But you can always unilaterally add the discount for speed.
It's not clear how much they owe you, but if they're 6 months behind on all their payments, that's a substantial amount.
It's also not clear what your company does for legal advice -- whether you have a lawyer in-house (apparently not), or a lawyer that you regularly use, or hire a new lawyer whenever you need one. You must have signed a contract with this company. Did you have a lawyer to review the contract before you signed? A good contract should anticipate every likely problem, including this. Are there any provisions for delayed payments?
But you need to get a lawyer's advice. It might be easy and cheap to collect your debt, it might not be. (In the US, lawyers sometimes charge 30% of the amount to collect it.) You don't know until you've talked to a lawyer.
If the company is judgment-proof, that is, if they're running at a deficit and don't have the money to pay it, you might not be able to collect at all. Or you might be able to get your bills paid before somebody else's. Or before they go bankrupt.
Actually, posting on Slashdot is useful. Regardless of the law, what you ultimately want to know is what happened to other people in your situation. But a lawyer can look at the specific facts and give you your options.
Here's a tip on how to save money on legal fees: Write a detailed, well-organized memo describing the situation for the lawyer. (Organization is more important than detail.) Collect the major documents, contracts, etc. and add them to the memo. Normally, a lawyer will interview you, write a detailed memo for his file -- and bill you for his time. Anything you can do to save the lawyer time will also save you a lot of money.
In my experience, when your clients fall way behind on their bills, it's for one of 2 reasons:
(1) The company is successful but having cash flow problems, they can't get enough capital for everything, they're paying the most important bills first, and yours is on the end of the list. But you'll get paid eventually. You should be able to negotiate with them to get something now even if you can't get the whole amount. Get them to agree on how they pay you from now on.
(2) The company is failing, they're not making enough to pay their bills, and they'll soon be out of business. You may never get paid. But you might get something if you take aggressive measures now (maybe suing them). Or it might be hopeless.
So these are 2 different strategies. The commercial credit rating agencies may help you there. But if they're a large international corporation, their annual and quarterly reports should tell you what their financial situation is.
Step 1, send an invoice with clear payment terms.
Step 2, send one polite reminder maybe 7 days after the due date.
Step 3, send a Letter Before Action, with a further 7 day deadline (use a firm like thomashiggins.com to turn the legal wheels very cheaply)
Step 4, file a claim in the small claims court (again, thomashiggins.com are very good for this). It may take weeks but you can add interest and all the costs you've incurred.
The few times I've done this (as a consumer) the company has coughed up at some point just before or just after the court papers have gone in. For a truly hopelessly disorganised company this is the only escalation method that works.
The furthest it ever got was with Enterprise car rentals - I had a bailiff threaten to tow one of their vehicles before they would write a cheque.
This is all advice for uncontested debts - obviously if the company has a problem with the debt they may choose to represent themselves and argue the point, but if they were going to do that, they'd probably have engaged you first!
Matthew @ Bytemark Hosting
Behold the private sector operating smoothly, efficiently and fairly. Remember this occasion if you ever suspect a "government efficiency" joke might be somewhat unfair.
When I was working (in the EU) for a huge international company based in the US, I had a similar experience and when I realised that my normal contact person could do absolutely nothing, I slowly crawled up the corporate ladder by asking my contact for the details of his manager, whom I contacted. Nothing happened and I asked for the next higher level ... no result. At the third level up, though, it started to happen and after several phone calls, E-mails and a couple of nicely phrased letters, I got my money ... after three more months, making it almost nine months in all until payment.
I never got any of the late payment penalty invoices paid though - they never pay late payment fees as a corporate policy, I was told.
Thank you so much!
Second idea is to simply sell the debt to a factoring outfit. You'll only get a percentage of the headline figure, but the loss should be written off for tax purposes (small comfort).
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
In a similar situation a friend of mine sent his "CFO", a very persistant slightly weird looking math professor, who happened not to believe in shoes....
He went to the company very politely presenting his set of invoices, and various "excuses" sent out in form of emails, and requesting to see his "equivalent" (their CFO), he spent two days comming at soon as they openned the office and leaving when they closed....
They could have called the cops, and threatened too, he explained that they could, his lawyer was waiting in front of the relevant police station just in case...
They could refuse to let him see their CFO, he didn't mind the lobby was warm and they had a coffee machine, and he brought newspapers and food.
They could throw him out, he had friends at various newspapers.
So he saw the CFO, who tried to explain that there was some reasons not to pay, so he called the office on his mobile phone putting it on speaker...
And for everything the CFO said the company had three people calling at once, on all numbers they had of anybody, and norbert made if very clear that he would not leave without closing all the loops and the cash...
Epilog, the company finally nervous accountant sent a payment order to their bank, and a copy to the company (on the insistance of norbert) the company sent a copy to the clients bank and to their bank to make sure that there was no error...
So they ended up being paid twice....
The client to "save face" and stop thinking about sent an "avoir" wich means the the company should provide an equivalent discount on future work...
Of course they never planned to bid on any new projects with this client....
Norbert got a large box of havanas...
I've worked for a very small company that used to deal with big customers, and now I work for a big company. The biggest problem that I find with smaller companies getting paid is that they don't fully understand the payment procedure.
Big companies have major bureaucracy to hamper payments, just to prevent and reduce fraud. They're all different, and they'll all complex.
My advice:
1. Go and sit down with someone in Accounts Payable. Find out exactly how their payment system works.
2. Find out exactly how they like their invoices structured (I've had many invoices rejected because they weren't written out precisely how their accounts department liked it.)
3. Find out who is personally responsible for approving payment on your invoice (most likely the person who commissioned the work, and / or their boss, and call and chase them up regularly.)
4. Find out the size and frequency of invoices they prefer (Generally people have different levels of authorisation. If the person that you deal with one a day-to-day basis only has a small authorisation limit, then send in an invoice every (say) two weeks, that falls inside that limit.) Stops the approval having to go up the bureaucratic chain and disappearing.
Don't do any of the vindictive tactics listed by other posters until you're certain that your being maliciously screwed, and not just being trashed by the bureaucracy.
I used to know 20 years ago a lot of people contracting with Disney. Most were prop builders and designers but one handled their aquariums. Even the aquarium guy had trouble getting paid. Their 90 day payment scam was so you couldn't bother them for 90 days. It didn't mean you'd get paid in 90 days. They took pride in the fact they had drove so many companies into bankruptcy because of all the non payments. The problem is there was always another company out there hungry for the contract. How bad can it get get? I know the aquarium guy was 18 months behind at one point. A lot of these companies will keep delaying payments until they get you six to twelve months behind then they find some one else and hand it off to their lawyers. They know the worst that will happen if you sue them is they will have to pay what they owe. The catch-22 is if you sue them in the corporate world you get known as some one that will sue so you become a risk. I found out the hard way arbitration is a waste of time because the arbiters effectively work for the corporations no matter what anyone tells you. It's like the old Wargames line, the only way to win is not play the game.
A well-established collection group will have their own attorneys, and should only charge you a percentage of the recovery rather than a hefty up-front fee.
US based company goes multinational starts screwing little guy who'd have guessed
1. Nice letter saying "Pay by the end of the month or I'll be forced to file in court."
2. Wait for end of month.
3. File in small claims court the sum of a)what they owe, b)maximum statutory interest, c)filing fees, d)an extra amount that if they will show up (they won't) you'll have to forego
4. Get default judgment when they don't show up
5. Get an order from the court allowing you to garnish their bank account for this amount
6. Provide said order to their bank
That will get you paid. You may even get their attention somewhere between steps 3 and 5.
E
I want to make it clear that I am not a lawyer, so please don't construe this advice as creating an attorney-client relationship. That said, this situation is common and easy to solve if you follow these steps:
1) Go to their offices and beat the shit out the receptionist. Nothing says Serious Business like a bookish-looking receptionist with a busted jaw!
2) A week later return to their offices and get beaten up by their receptionist. Nothing says Serious Business like a willingness to get your jaw broken by a bookish-looking receptionist. Bonus points if at some point during the fight your penis should accidentally slip out.
3) At the next meeting, leap on their back of the most senior person and yell "Giddyap, chubby horsie man!" Under law that person is then required to grant you three wishes.
4) Offer to turn them on to some free porn sites if the payments are settled. Make a wanking gesture, and wink, while doing this.
5) Visit forums of the Sovereign Citizen community. Ask for legal advice, and do everything they say - even if it appears nonsensical. If Sovereign Citizens won't help, claim you were touched by their mailroom guy.
6) Locate a lawyer familiar with local law and your contractual situation. Punch them in their stupid face. Pow! Did you see that mother go down?
Firstly: Never, ever depend one one client for all your income. Ever! I speak from experience. No matter how good relationships are, there will come a time when relations cool down. ,ever trust a big company will continue to want you. Either your part of their strategy in which case your services will be in sourced, or you're not part of their strategy and you will be very replaceable.
Secondly: Never
I hadn't the slightest objection to his spending his time planning massacres for the bourgeoisie... (P.G. Wodehouse)
I hear chains and broken shins work wonders.
DO IT NOW! the Death Star will be built soon, and then all hope is lost (unless the Death Star needs the development you provide).
The G
Every medium & above -sized Corporation has at least two departments, possibly three.
1 - Vendor Management
2 - Supply Chain
3 - Accounts Payable
Find out who the Vendor Relations Manager. Ask your customer at the Company.
Engage them. They should be able to guide you through the abyss that is Supply Chain and Accounting.
Most large Companies have specific guidelines for Emailing or Faxing invoices. Purchase Order numbers typically have to be referenced on all invoices.
Do you have a Master Agreement? Refer to that for remittance instructions.
You don't have a Master Agreement? Don't do any more work until you obtain one.
If this Company doesn't have a Vendor Relations department, ask your contact for a contact in Supply Chain.
Supply Chain would be the one's to work up any Master Agreements between you and them anyway. They'll also be able to provide remittance guidelines and instructions.
Last, ask your Contact at the Company for a name and telephone number of somebody in Accounts Payable. Reach out to them.
It's not that difficult.
But your first stop is with your contact inside the Company, not here on Slashdot.
E.g. If your work is in their website, and your contract is a work-for-hire, it is possible that they don't own the copyright to the pages they are serving. ...?
Maybe this is infringement
Maybe a DMCA takedown notice for their website would be enough to get their attention...?
Protest with a sign in front of one of their main offices. They don't want the bad P/R. Stay on the side-walk though, otherwise they'll arrest you for trespassing.
Table-ized A.I.
... go to court, get a quick judgment, and get the Sheriff or whoever it is that has jurisdiction to enforce you going an emptying a local branch office of whatever you can carry out.
Get paid.
This has actually happened in real life.
http://www.digtriad.com/news/watercooler/article/178031/176/Florida-Homeowner-Forecloses-On-Bank-Of-America
--
BMO
This is why I keep a killswitch type plan in place for web design work. If someone doesn't pay, it says in the contract, I will take down the content I made. It makes perfect sense, is reasonable, and gets bills paid. If they have some sort of notification that they'll change all FTP passwords etc the second your work is done, don't touch the project in the first place. You can also though host a couple individual libraries or graphics offsite and they won't notice. Just pull it or replace it with "this client has not paid their bills - image removed."
If the individual invoices are below small claims court limit, sue them for each individual invoice in small claims court. You get to represent yourself, but they will spend to send a lawyer and have no explanation why they have not paid the bills.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
First.. there is a person or group of people in accounts payables. Call until you can talk to the accounts payable supervisor, manager, director..whatever the title of the week is. Get on a first name basis. Work some humanity into the conversation and get to know this person..not just where the hell is my checks, but, Hi Theresa, how are you today? How was your vacation? If you can turn a personal corner with someone who has an inside track on where your check is you will be miles ahead of the game. I have done this many times and on occasion managed to get checks cut and mailed the same day..with the right person on my side.
The second option is simple. Fire the client. There comes a time when you have exhausted all your resources and every effort and attempt is a slammed door. Cut your losses and walk away. Write off the unpaid bills on your taxes and move on to the next big thing. Unless you are dealing in 6+ figures, the court and lawyers imho are simply not worth it, especially when duking it out with a corp that probably has a whole floor of lawyers sitting around waiting to chew up and spit out a small fry. If you cant get into the AP dept, they wont pay, just write it off, walk away, and learn to get what you need up front next time.
Hire a collection agency. Yes, they do cost money but they know the business. Also it cannot hurt to notify D&B, Coface, Credit Reform or whatever rating agency is relevant to them, because part of the data rating agencies use is how their suppliers' payment experience is.
Even if they have an EU subsidiary, that's almost certainly not who his contract is with. He's not going to be able to get a judgement against any company other that the one his contract is with.
Enjoy life! This is not a dress rehearsal.
I wasn't sure how long can I make the summary so I tried to be as brief as possible. First of all, as someone already said in a comment, the reason I posted this on /. is to get some feedback from people that have dealt with this situation in the past.
Other points not in the summary:
- The contract was terminated with all the proper notifications and acceptances.
- The governing country of the contract is not our own, and we are investigating this with lawyers in that country. (so far we know that our outstanding invoices are over the "small claim court" limit)
- All of the work for the issued invoices was properly received and accepted so there are no issues of disputed claims, as per the numerous "everything is fine on this end, it should have been paid already" exchanges over the past months.
- We do have strict 30day payment terms with (capped) % for late payment, it's way past that at this point...
- I've ran up the "chain of command" as far up as SVP of software dev and SVP of finance. There's always an excuse, always a "corporate hold this month" type of bs.
- I know that "name and shame" is fun and entertaining but common sense says no. Sorry.
I appreciate all your feed-back, especially the posts from similar situations.
HSBC do invoice "factoring" (in the UK) for 3% of the invoice value. They will chase the end customer and they have the muscle to get you the money. Normally they will pay you within a very short period of the invoice being issued.
If they are a publicly listed company, then they will probably have 'Investor Relations' information posted somewhere. This is often the fast route to the top of the corporate ladder. Look at the Board members and VPs and determine who would be most likely responsible. Then try and send them an e-mail. Many e-mail addresses are not posted, but are easy to guess. Try the obvious ones systematically (e.g. joeblow@megacorp.com, joe.blow@megacorp.com, etc, until one does not generate an e-mail bounce. I have had good luck with this method with major corporations, as a mere customer. It has even worked with senior political figures in the US government. If this does not work, then try sending an e-mail to the generic 'Investor Relations' e-mail, do not say too much, but ask to be passed on to the relevant person. Using this method, I was able to get to the top of the BP ladder during the Gulf Oil Spill. Needless to say, I was unable to persuade BP to stop acting like jackasses, but at least I got my concerns heard. A final strategy is to file against them in small claims court. This is often cheap and easy to do and does not require a lawyer. There are usually limits to the amount you can claim, so just file for a portion of the bill. No matter how many lawyers they have, they hate to have to have them show up (usually at US$250+ per hour) and argue the case. Good luck!
If you're an individual, you can get the US Department of Labor to go to bat for you. They take an EXTREMELY dim view of businesses that don't pay for labor. (I was once on the receiving end from them -- long story, it was dispute with employee who would just come in to work without authorization and stack up hours, then complained when we didn't pay him -- and even though we were in the right in that particular dispute, WOW were they a pain to deal with.)
As others have suggested, you also do need to talk to an attorney -- but unless the invoices represent many thousands of dollars, it may not be worth it.
As for the comments here about how corporations can "rip you off" -- the deep, dark secret; the unspoken truth is, if someone won't pay you, your options are limited. Whether it's a neighbor who owes you for a lawn mower or a big corporation that owes you for work and services, you can take them to court, obtain a judgment, then execute same. It takes quite a while, though -- many, many months.
If the other party *can't* pay you, here's an even deeper secret: you're out of luck. Unless they have assets that you can seize, there's not a court in the United States that can force someone to invent money with which to pay you. I realize that's probably not the case here, but I state that just for completeness. Even if you win a judgment in court, if the other party CAN'T pay you, you have a pretty piece of paper and absolutely no money.
Cogito, igitur comedam pizza.
If this was an individual on the other end there would be news coverage of unacceptable moral decline and the need for stricter laws and regulations. Being business depending on who you talk to it can be professional as class distinction.
Depends on the jurisdiction of your invoice. In the UK it's a 222 winding-up order (ask your accountant).
In practice (and I've had to do this myself) you get your lawyer to send them a letter stating that they are in default, that you are to petition the High Court for a 222 winding up order, and that you will call a creditors meeting which will be advertised in the national press. Unless you get immediate payment by return of post.
What got me, was that it didn't even affect my relationship with the client. Their accountants just smirked and said "Ah, you've found out how to get us to pay then". It was like a game to them. Oh, and they sent a man on a motorbike with the money, not even a cheque, so that I had to explain to my bank why I was depositing such a large amount of cash (in the UK, unusual cash deposits are queried and reported to the police).
Small claims court? Depends how big the amount is though.
What can a small company do to fight a big corp that's NASDAQ listed and has an army of lawyers?
There are a few options but only one of them is actually good. Most big companies are actually pretty good about paying though they may stretch out the terms to unreasonably long time frames. Occasionally things fall between the cracks so don't assume malice unless you are sure it is not incompetence. My company deals with much larger companies all the time and most problems we have are simply due to the fact that we are simply an insignificant amount of business to them. $10,000 in parts is huge to us but would be a rounding error to them.
1) You can halt deliveries/services until they make their account current. This hurts you as well (no revenue coming in) but sometime you have to play a game of chicken. If the product is important, you'll get their attention in a hurry. This is most effective for just-in-time deliveries where they cannot get the parts anywhere else easily or quickly.
2) Contact a lawyer. This usually isn't an option for the small guy just because they don't have the revenue to fund a court battle. This is a last resort.
3) Embarrass them publicly. Hard to do and usually not very effective. High chance of backfiring if you plan to ever do business with this customer again.
4) Nag. Call the local accounts payable people every day. Twice a day if you need to. Be extremely polite but firm. This will not make them happy but it does tend to get some results.
5) Best option is that you have to make friends with someone in accounts payable or vendor relations. If you have someone who will go to bat for you then you'll get paid.
If the company isn't paying you because of their own financial problems, you may be screwed. If someone in management doesn't like you, you'll have to play hardball.
... you make him an offer he can't refuse?
Send them a DMCA takedown notice. Under US law, the author retains copyright *even if that work was commissioned by someone else*. Most contracts therefore have a "work-for-hire" clause stating that rights will be transferred to client... but that won't apply if client hasn't met his end of the contract (i.e., paid).
If the risk of ridiculous punitive damages for infringement doesn't get their attention, send a takedown notice to the client's ISP/hosting provider (with proof of your copyright). The ISP is *legally obligated* to take the infringing content offline (i.e., the client's site) else they incur liability too. If that doesn't get you paid, short the client's stock, they're on their way out of business.
IANAL, YMM, who said copyright was all bad?
--Pete
Since I didn't see a ton of comments posted by people who have experience with this, I thought I'd add one.
Delayed payment is normal. Large companies have very complex rules about how to make payments and how to process invoices. You must be extremely persistent and gracious in order to get things resolved. Each company will respond differently, but I encourage you to make use of some (if not all) of these following tactics:
1) Get a "Master Vendor Agreement" in place with the customer that states invoicing terms. This contract may take months to negotiate and require guidance from a lawyer. Once this is done, all of your projects should be addendums to this original master vendor agreement. This reduces the amount of paperwork the large multinational company has to do to validate each of your invoices and speeds them up.
2) Provide both a discount for early payment and a penalty for late payment. Annotate these discounts & payments on each invoice. If you carefully track your effort, you can know how much it costs you to track long term overdue payments. You can use this to determine how much of a discount you can offer for prompt payment.
3) Designate someone within your company as the "Accounts Receivable" person. It is their job to contact each customer with an overdue payment once per month (or week). They should very carefully take notes on all of their conversations and correspondence, but they _must_ be friendly and relaxed. The goal is to establish a positive rapport with the "accounts payable" person on the other side. It may take dozens of polite phonecalls to get routed to the correct person though, so you absolutely must be willing to put in the effort while not creating bad will.
4) Be gracious when payment is offered. Many times, companies may refuse to pay late payment fees; you can simply say, "I'll remove the late payment fee if you wire the money by tomorrow".
5) If desired, you can contact your bank to find out if they will finance your receivables. Some banks will provide you with cash up front (and charge you a fee) since they know how this process works.
6) Don't harass your point of contact until the invoice is more than a reasonable amount late. Generally, in a big company, the person who signs the contract doesn't even know the person who actually pays the bill. You want to avoid harassing your point of contact (who is usually your biggest fan) until you really need their help getting the bill paid.
7) Know your customers' "approval limits". Generally, executives at a large company will have specific approval levels - for maybe $500 they can simply file an expense report; for $2500 they have to file one form with one signature, and for more than that they have to get approval from a VP level person. If you can keep your projects small enough, you can bypass some of the challenges.
8) Once you've read lots of advice on slashdot and picked a strategy, contact a lawyer before doing anything. Most lawyers will be able to confirm whether your plans follow the law quickly. It'll only cost you a small amount.
And finally, remember, "managing receivables" is part of the cost of doing business with large companies. Factor it into your project costs.
Please Consider:
1. You might just be caught between two departments fighting over budgets.
2. Someone might have a choice between paying your bill or firing some friends, which may destroy their finances.
3. Someone made a typo on the budget. It is easier not to pay you for a few months rather then admit error.
4.......
If you sue keep in mind that it could take years, it will trigger a fight response in the company, the company will claim your work is crap and the judge may decide to cut the baby in half as a solution.
First:
Be extremely polite!
Prentend to be somewhat confused, but trying to be helpful.
Make lots of calls.
1) Always have a signed written contract and PO whenever you deal with a large corp
2) Get paid up front before work is performed.
3) If you can't get these things then don't do business with them. Find some other sucker to do it and act as a sub.
Not possible in most cases to get paid before work is performed. Maybe for certain services but that would be the exception. In manufacturing you'll be lucky to get better than Net 60 day terms with a large corp. Don't like it? Too bad. Doesn't matter much what it says on the invoice you send them either. They'll pay you when they want to and they sure as hell aren't paying you up front.
Write penalties for late payments into future contracts. Make these penalties large enough so You are happy when they do not pay on time.
Enforce them as though they were a triviality.
Do keep after them, or You will never get paid.
I've also seen it from the other side. Make sure your customers, the people in the company that you actually do the work for, know about the difficulty getting paid, but be nice about it to get them on your side. It might be helpful to offer to cc them on the bills, so they can see what's due and when so that they can pressure the accounts payable people. If they like your work they can be your allies, and they'll probably be embarrassed that their company treats you this way. I like the "discount" for prompt payment idea, too.
Step 5: Explain what the hell this nonsense has to do with a customer that won't pay their bills.
If this behaviour is intentional you're not going to be paid, no matter what. Get over it.
Going to court will grant you the privilege - after a number of years - to pay an hefty amount in damages (you know, judges are quite cheap today).
Good luck
Mastering the English language is fucking easy: all you have to do is to put an f* word in every fucking sentence.
You are too small to pay.
-Hack
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
Agreed with most of what Joce640k writes.
The most likely explanation is not malice, but that the right person hasn't done their goods receipt so A/P can release the funds. Or they made a screw-up, closed a project or a funding source by mistake, and now need to go through three levels of horror and approvals to get the funding back.
Go and see a lawyer. The charge for the few hours of work will sting but it's surely going to be much less than you're owed. Take careful note of Step 2. Well, ask the lawyer about step 2 and take careful note of what they say. If you can do so, cease your work (hopefully you've got short term work you can get your employees to do in the meantime) and let the client know politely why you're doing so. (Get the lawyer to do it; they're much better at that kind of thing, and they're not going to get emotional. As Joce640k says, businesses are run by grown-ups.) It may feel satisfying to write a screed of anger, but it doesn't get results in the business world. Go out for a drink with a friend and rant to them, if you'll feel better. But be professional in your business dealings.
If lawyer says you can go ahead and stop working on this contract until things get resolved, then l
I wouldn't advise approaching the competitor, at least until you've heard the lawyer's opinion (yes, that too could be a breach of contract on your part).
Don't try the "name and shame" game. As others point out:
* Beware of libel lawsuits. ... that will agree to publish (newspapers are afraid of libel too, and it's probably not that interesting as a story, and classifieds in a big paper/commercial site are more expensive than the lawyer option)? ...that's big enough that the company will notice?
* Where will you go for the "naming" part?
*
*
* And even if they notice, they most likely won't care.
Some simple and practical solutions. - Put your prices up by 20% then offer a 10% discount on all invoices if paid by the 20th of the month following invoice and a 20% discount if paid within 10 days. You will be amazed at how quickly corporates pay if they get a discount, they always prioritize invoices with an early payment discount. If not, then you get an extra 20% to pay for the time you waste chasing them up. - Sell the invoices to a debt collection company. Then you get the money up front and let them chase it up on your behalf. - Withhold the work or IP until payment is received on the oldest invoices.
Just in case anyone thinks this is a good idea (and evidently some of you do, as this is currently scored +4 Insightful)...
No. Don't. You'll be sued, and you'll lose.
It might feel good. It might seem fair. There are plenty of people here who'll say they deserve it. They may even be somewhat correct. Don't do it.
If they're a large multi-national corporation, however, I doubt an external small vendor would have access to do this, fortunately.
Lastly, one should always carefully consider if one really wants to take advice from someone who's suggesting quite major actions of high impact and who gets confused between simple homonyms. (Joe_Dragon, you mean "their".)
You can file a mechanic's lien against your client for the work done/money owed. Initially, nothing much happens. But when they try to borrow money or get involved in M&A, your lien will stop them dead in the water until they resolve it. I have a photographer friend who did this with a Fortune 500 medical device company. They were involved in buying a smaller device company and when they tried to finalize the deal, they couldn't do it until the lien was lifted. He got paid with a cashier's check delivered by courier. http://en.wikipedia.org/wiki/Mechanic's_lien
Let them know that legal ownership of the debt will now belong to mafioso types if they do not pay, and it will be cheaper to settle up with you instead of people who collect using baseball bats instead of letters.
98% of the recommendations made here strike me as wrong.
Here's what you should do: Terminate your business with them.
The funds that they owe you? Move it into the "Bad Debt" section of your ledgers. Don't work for them anymore and don't waste anymore time and money going after what they owe you. Even if you did finally get them to pay you for some of your work, can you trust them?
Move on. They have.
See what happens when you play with the Devil, you get burned...
Tough luck sucker, this is the future of Corporate Rule.
If they are multinational you have the advantegous position that they will also have some office in your jurisdiction, so you can just use your local laws against them. For example in Germany start a Mahnverfahren. You send them a demand note in the correct form and then they either contest it or nor. They will not contest it as that would means it goes to court which means it will cost them much more money (but not you, assuming they really owe you the money). If they not contest it within the right time frame then you get a title, which means you can send a public repossessor to collect any property they have on German soil (I'd suggest against taking their office computers as they get worthless so fast, but if you do not find enough money elsewhere that might be a good way to get someone there to react).
captcha: toasted
Then give them 30 days to send payment. If they don't show up with a sherrif and basically claim their property in the office ( It worked against Bank of America)
UPS Sucks
If your contract doesn't cover this already, then you need to get a lawyer asap to fix the contract, and then try to get them to pay up and renegotiate the new contract.
See this video for examples on how your contract should be protecting you from this already:
http://vimeo.com/22053820
Not sure if you'll see this, but here goes.
I briefly worked as a debt collector (no, not the breaking people's legs kind, the ringing people up and asking for money kind).
Firstly, have you been invoicing them monthly including highlighting outstanding amounts or separate late payment notices? I hope so - it's good to keep a paper trail.
Secondly. Call them. Get through the accounts area in charge of paying your invoice. If possible, get them to commit to a payment date. Do this every week. (I shouldn't need to say this but, keep it professional!).
If none of this makes any progress (e.g. the higher-ups have specifically said not to pay you) then you have 2 options:
1) Start legal proceedings. This may be in the form of a letter threatening to take the matter to court (which you may or may not have the intention of doing). If you go this way, get a lawyer and do everything through the lawyer. This may be expensive depending on how far you want to go.
2) Sell your debt to a debt collection agency. I'm not sure what the rates are but you may be able to get 50% of your money owed this way. Good option if 1) is too expensive.
You probably know this but be careful about working for people who have not paid you. It CAN work out okay and may just be a matter of cash flow or bureaucracy holding up the works but it leaves you open to this sort of situation also.
I hope this helps and good luck!
The general rule is that you can't force anybody to pay you what they owe you. That's why you have to build trust. When dealing with a business partner, you should assume the worst at first. If they don't pay, cut your losses as quickly as you can and move on.
That's good advice for Internet purchases as well. Hell, that's my attitude toward my employer: don't rack up expenses for your employer on the corporate credit card. If they go bankrupt, you are liable for the expenses personally.
Big companies have stupid rules. Ask what's causing the delay and if you can help.
For example, I work for a company that sells expensive software, which is downloaded over the Internet. We have one customer who gets a free blank CD with every order, sent to them by tracked delivery. Their company rules say that they can't pay an invoice until they've received the item, and the rules don't mention this newfangled Internet thing. So they simply cannot pay for downloaded software. So we send them a blank CD with the correct paperwork, then their systems say "goods received" and they can pay us. The people actually _using_ the software download it as soon as they've ordered, then throw the CD away when it arrives.
Yes, this is ridiculous. But blank CDs are too cheap to worry about, so all this is costing us is the postage. And the upside is that we actually get paid.
(And before anyone asks - Yes, I am talking about 2012, and the customer is a big "high-tech" company).
I once had some problems collecting on an invoice from a multinational company in the food service industry. Anytime I would call the manager at the local branch, he gave me the run around: busy crowd, can't talk right now, call back later. Then I call back later and he's unavailable. This went on for months. I then went to their website, initially with the idea of seeing if I could figure out to climb his chain of command. The only number I could find was for their Customer Care. The one that says if you are anyway dissatisfied with our products, please let us know. So I called. I was very polite. I apologized for calling that number, saying that I knew I wasn't calling as a customer, but that I didn't know who else to call. She was sweet as could be, asking for all the details.
The very next day I received a call from the manager of the local branch, apologizing for his behavior. Payment in full was received in less then a week.
No PO or anything (Net-30/60, etc). You require your client to pay for the service upfront, or within a short period of time. Use credit cards, but that could be problematic with overseas clients.
Bank wires are still the safest way to get paid...that's how Chinese/Korean manufacturers get paid (no CC, or PO). The reason is simple, they don't know their clients and more importantly, they have no legal recourse.
Most of this advice is really bad.
http://www.digtriad.com/news/watercooler/article/178031/176/Florida-Homeowner-Forecloses-On-Bank-Of-America This works very well.
Liberty - Security - Laziness - Pick any two.
Let them know this. Let them know it will be cheaper to pay you in full than to deal with people who collect using baseball bats, not lawyers.
Since when are contracts unenforceable by law? You DO have a contract right? What's it say about payment terms, late payments, and deliverables?
My advice:
1) Get a GOOD lawyer experienced in this type of work and have him review the facts and present you with your options.
2) Try a final invoice, with a very bold, very large print letter from your CEO and CFO attached: "Unless payment (now 6 months late) for all invoices currently payable is received by date X, we will initiate legal action against you by doing (summary of what you intend to do to collect - based on lawyer feedback from step #1 above). When we file suit, we will ALSO suspend any additional work on new or existing project work until payment is made. Attached is a list of the current deliverables we owe you, and the projects that will be impacted if we halt work on them."
3) On that invoice & letter, CC:
a) everybody in the "financial/accounts payable" side of their business all the way up to the CFO;
b) the CEO;
c) the CIO / CTO;
d) the key stakeholders of all projects to whom you owe deliverables and for whom project deliverables will be halted;
e) the members of the corporate board;
4) In future contract negotiations, hire better lawyers to review your contracts - if you don't have an escape clause and VERY clear penalties for late payment / late delivery on both sides, then you have been taken for a ride.
5) If they don't come through with payment, then hold to the threatened course in step #2 above - initiate legal action, and halt any new work intake for them, and do everything you can within the terms of your contract (again - lawyer advice from #1 - don't be the ones to appear to be in breach) to *stop projects that are ongoing* in their tracks. You'd be amazed at how quickly a key manager who sees his schedule going up in smoke on a critical project can make things move when he has the proper incentive.
Ok, you people that are talking about lawyers and letters and late fees are just not with the reality of a large company. I am not all that an important an employee at a global 500 company, and I have a good dozen lawyers I know by first name that I might use for various purposes...
For the most part, large companies work from purchase orders. Up front, get whoever you are doing business with in the company to give you a purchase order. Write your contract with the company so that all actual work will be released by issuance of a valid purchase order. If you have a valid purchase order number, and submit an invoice in good format that has the PO # and the invoice total due very clearly displayed on the first page, you have gone most of the distance toward getting successfully paid. Those two things will insure that the invoice has a really good chance of getting coded in their system properly, at least, and then you will be talking in the terms of how to get an invoice that is in their system paid. The less AP has to think about, the better, because those people are not paid to think.
Ideally the company will also have an email address that you can electronically send the invoice, so that you don't get stuck in a situation where you send the paper invoice somewhere and the global company processes all paper invoices on the other side of the world and they all get shipped there without even being looked at... That happens, or used to, at one of the largest companies in the world and so they would insist on 45 day payment terms with all of their contractors.
For whoever is interested, The CEE (European Economic Community) was merged in the European Union with the Lisbon Treaty, Eurataom (european nuclear community) disapeared the same way. The community for coal and steal had a lifespan of 50 years and was not renewed so it had already disapeared. There are no more communities in the european legal framework.
If you don't have a lawyer, get one.
People actually do go to school to learn how to wrangle with international corporations, torts, contracts, etc., and the vast, vast majority of the good ones don't program on the side, or if they did, would give legal advice on an Internet forum.
I work for a small resource exploration company which does some work for (thankfully among others) very large mining companies that sometimes think they are above all laws and have enough lawyers to stall legal actions effectively forever. However they are also inflexible, so when one utter bastard refuses to pay it's often only a year later that somebody from the same company comes in and asks you to do a job (because you are on their contractors list or whatever) and you can hit them upfront for the unpaid bill before you take it on. That works nearly every time since it's either not the previous bastard (thus grubby office politics in those places means it's to political advantage to pay the bill and blame the previous bastard) or the previous bastard is in a tight spot and has come back for help and is willing to discuss terms. In the meantime (which may be years) it sucks while the bill is outstanding, so you may be screwed unless you have other clients to keep you afloat. From what I've seen some fees are just lost forever (typically from the darlings of the financial pages) but a lot get recovered eventually.
The only way is to stop services, until they pay. Halt your next release and don't give it to them till they've paid. This is how I got back payments from Egghead software.
Sue locally. Get a court order that allows you to impound computer/laptop power cables and coffeemachines. Hire a couple of bailiffs and pay a visit. Alternatively, buy a few share (a dozen should be affordable enough). Speak at the next shareholders meeting
You call the switchboard (it can take some digging) and request the office of the CEO, or (better) send an email to the entire executive suite. Frequently email addresses are publicly available or are some variant of first.last@example.com.
I've utilized both techniques at various times.
While travelling in Australia with an (I was told at the sales location) International-capable SIM-swappable phone, that I found out was in fact locked, I emailed the CEO of Cingular, copying a good friend of mine who covers the mobile sector for a tech publication, requesting the phone be unlocked (this after several rounds of frustration on long-distance international tech support). My host was awakened at 5am by a call from the US the next morning.
On discovering significant 419 spam transiting through Microsoft's Hotmail servers, I called the Microsoft switchboard, requested the SVP of the appropriate department, was transferred to him directly, he picked up within two rings, we spoke briefly, he promised that the person responsible would call me within the hour, fifteen minutes later I was talking with the person in charge of Hotmail abuse mitigation, and we worked to resolve the problem over the next several months. I'm no fan of Microsoft, but their response here impressed me immensely.
Another spam issue turned out to be a service run by a contractor at a southeastern university. After getting the brush off from the guy at his personal account (and tracking down his consulting gig), I sent a round of emails escalating one level up the university org chart, eventually hitting the president's office. By the third or fourth round I'd gotten the resolution I'd hoped for in the first place.
Issues with delivery through Yahoo (and months of zero useful responsiveness from their help desk and CTO and the self-reporting web tools) led me to finally email the entire executive suite (as far as I could identify -- this was a few CEOs ago) with an email subject line "Gentlemen, you have a problem", containing a brief synopsis and pflogsum extracts comparing delivery rates and times through Yahoo and other major email service providers. Got a response from the "concierge" desk and resolution within a couple of days.
In another case, an airline's exceptionally poor service led me to write an essay and post it to my website (as I'd promised the CSR I'd do when I requested hotel accomodations to compensate for fouling up both legs of my journey and stranding me at an airport overnight). I didn't get the resolution I'd wanted, but my piece generated a number of emails to me from both other frustrated passengers, and a number of airline employees and investors as the company struggled to stay solvent. It ultimately lost that battle, and I cried very, very little.
Look up "the art of turboing". Realize that politics and sociology of most businesses makes such embarrassments a very high priority to resolve, especially if they're chump change to the organization in question. http://macwhiz.com/blog/art-of-turboing/
What part of "gestalt" don't you understand?
Big companies tend to negotiate long payment periods. We're I work we don't pay anyone within 6 months. We also make it a point to dispute invoices.
Our suppliers have professional salesmen that make a living trying to rip us off.
That's the environment. Play the game- charge more for your next contract, keep trying to collect your invoice, and above all,stay on friendly terms.
You need to give them due process.
That means a Notice of Fault and a Notice of Default. The process needs to be put together in a way that it is self documenting, either in itself of accompanied by your receivables people. I would include a Statement of Account that would enumerate your invoices, fines/fees, monetary corrections, etc etc. in your first mailing that would include the Notice of Fault. And perhaps you would include a letter of intent and/or Affidavit as well as a Bill of Lading (Certificate of Mailing for example) that has been notarized. And you should send the envelope directly to their CFO in their US office.
The Bill of Lading would need to enumerate all the documents sent. It's notarization is essentially the stamp of a 3rd party witness who is authorized by the state to issue oaths, it certifies the authenticity of the mailing in a definitive way.
In you letter of intent, sent with the Notice of Fault you need to clearly express your course of action. Perhaps something like if payment is not received within 15 days, it will cause the emission of a notice of Default. (30 days if you are dealing with government [USC Title 5])
If payment is not received you send the out a similar mailing with a Notice of Default. You give them 5 days to remedy the situation. And then register a UCC1 Commercial Lean against the corporation in the US. That can be done online in most states. You want to register in the state where their corporate HQ is located.
Your mailings need to be done by Registered or Certified mail that have tracking numbers so that you have evidence of service.
With your original contract, unpaid invoices, evidence of the corporate merger, the undisputed Statement of Account sent with the Notice of Fault, the Notice of Default, the certified mail receipts and your UCC1 Lean you have all the evidence you need to have a judge back your collection efforts. A lawyer can be of much greater assistance at this stage rather than merely being a suit who sends out demands. The court will have their own "Due Process" related procedure they follow, but in the end, if the corporation does not manifest itself with payment or a lawyer, the county Sheriff will accompany you to their corporate office and you can take possession of their corporate assets and have a firesale on their front lawn until enough of their property has been sold to cover the unpaid balance.
It's important that in your process, you properly identify exactly which commercial entities you are seeking out because the courts will not permit you to collect from any unnamed third party who has not been given due process. I would include the name of the CFO, he is a corporate officer who is responsible for finances, not a mere employee. If you have a lawyer available to verify your presentations you can get some extra piece of mind. This process done properly will give you all the documentary teeth needed to get court backing. FYI, the IRS performs tax collections is somewhat a similar way, minus that the notarization and certified mailings.
For most people this level of commerce is overwhelming. Most people give value to following corporate procedures or some version of their rules. This process is one where you govern your business according to your rules. That being said there is nothing that says you can't accept some aspects of their policy as they may suggest it in their counter-offers (possibly made by lawyers) so as to facilitate remedy, even if your acceptance is conditional :) The only thing you should _not_ do is ignore anything they send you (counter-offers).
The person dealing with your account is obviously an idiot. Escalate to his/her boss. Keep going up until you get paid. That you are thinking of suing is not going to get you anywhere because, you know, they will win. Even if the judgement is in your favor, they will win. It's one thing to be paid to show up in court, make appeals, etc. It's another thing to go on your own time, angry, and putting up with their constant bullshit.
Seven puppies were harmed during the making of this post.
You should understand big company accounts.
Assuming your invoice is approved then there is an accounts person somewhere sitting on a payments due list.
If cash flow is a problem at this company then this accounts person has been instructed to only pay invoices that are seriously overdue or considered vital. However, they will know how to slide something onto the list.
They're people, they hate that their company isn't paying people. Find them, speak to them. Be nice.
One theme I see throughout modern history is individuals or groups carrying on doing the same thing because it worked in the past. Despite the fact that it's obvious to any rational observer that the justification died a long time ago. Your relationship, intellectual buy-in, mindshare, whatever you want to call it died when this company was taken over. Write them off as a source of future employment and just manage the revenue stream as a diminishing resource while it lasts. Stop wasting your time and energy on them.
We realized long ago that for the time and effort in screwing around with major multi-nationals (including fortune 500), we could handle a dozen smaller clients that pay immediately and buy more services. We are not in the IT biz, but we do hold a monopoly of sorts for what we do. We have the luxury in our niche market that It is sort of deal with us, or don't deal at all.
First, we insist on cash payment up front, in a retainer type strategy for all of our clients. eliminates deadbeats, but also a lot of billing conflicts with clients. Once they use up their credits, they have to renew. We don't play the corporate 6 month supply chain billing game. It really is a pyramid scheme that screws the little guys in the end. We don't give credit to clients, so why would I give credit to a major company?
Even with that however, we found out that large companies take so long to decide and then process the payment (months and years sometimes), that they simply were not worth doing business with. Even after they have paid, the internal bureaucracy for them to make a decision about if we can move ahead with a project takes weeks and months. In other words, they buy much less services, simply because they move so slowly.
Some might say, well you are missing out on making a lot of money. in my market, we make way more money off dealing with other small to medium size clients, without the hassle. Essentially, we deal with the owner directly or otherwise the guy that writes the checks, or we don't deal with them.
Dun & Bradstreet got their start as a collections agency. (This is where the term "dun" and "dunning letter", for debt collector and collections notice, came from. They were persistent.)
They still do that as part of their everyday business.
Corporations live and die based on their Dun & Bradstreet rating. If there is ONE collections agency a large US/multinational corporation is NOT going to ignore, it is Dun & Bradstreet.
Give them a call.
See https://creditreports.dnb.com/webapp/wcs/stores/servlet/SmbSubCategoryDisplay?storeId=11151&catalogId=71151&categoryId=40020
You might want to consider sending a "final warning" letter, CC: to both US and EU branches, advising them that you will place the debt for collection if they don't pay up within 30 calendar days, before you actually sic the Duns on them.
... ideally something of the same value as they owe you. Then don't pay, just tell them to take it out of what they already owe you.
If they sell anything worth having, that is.
Be careful with what you've agreed to, you may find you have explicitly or inadvertently agreed to long credit periods. They may have payment policies somewhere - perhaps on their requestion orders.
That said, there's a good chance that the reason your bills are so late is because either you do not know their procedures or you've slipped through the cracks when admin departments have been merged i.e. nobody there knows who is supposed to be authorising payment. Confirm all the details including your credit terms, address and FAO to send the bill to, and from whom you need purchase requestion orders - which you should send a copy of with your invoice.
Here in UK, and perhaps lots of other places, by statute (and therefore by default, though obviously it is better to state it on the invoices and contracts anyway) you are entitled to apply a high interest rate (currently 8.5%) on late commercial payments (B2B only). This is often good just to have as a negotiating point. An alternative (or combination) may be to offer early payment discounts, though bigger business are often wise to this and they wont pay early unless the discount is higher than their cost of capital (unlikely), and to make matters worse they'll often just see the discounted amount and pay that even when late.
Of course you should consider the impact with your relationship with the client.
Lastly, you could farm it out by factoring your invoices. Your bank or other company will pay you a % of the invoices immediately in return for a cut. There is a "no recourse" option whereby they'll not take the money back from you and will chase the debts for you - of course in return for a bigger cut. This has obvious cashflow advantages, but also that cut might actually be cheaper than your regular borrowing. More to the point perhaps, if the position is getting to the point where you don't want to work for them anymore, this gives the option of keeping the client.
Send a lawyer's notice to Chairman and CEO of the company.
And send a copy of it to Print and Electronic Media.
Casteism
If lawyer says you can go ahead and stop working on this contract until things get resolved, then l
That's a glaringly incomplete sentence, isn't it...
I had in mind a caveat to this. If lawyer says it's okay, and you have other work that you can do, then go ahead and reassign your employees. You may as well get some cash flow going. But keep in mind that if large multinational resolves things very quickly and says "mea culpa, now get back to work immediately please", you probably want to be able to jump. If you come back and say "well, sorry, it'll be two weeks", they will probably understand. It's trickier if you have programmers tied up on something else that's going to go on for the next two months.
If you don't have other work, well, it's a ponderous situation. Is it better to have programmers sitting idle, or to have them working on stuff which is technically billable but you're still struggling to get paid for? The headaches of running a business, I'm afraid.
1. kept reasonably good personal contact and relationship with middle managers who actually "consumed" our work 2. used twitter and other social media to gently reminding them (personally) that I need their help to collect. I never openly shamed and named, but it was implicitly clear that I may start doing so 3. I asked for their advice if posting the company name on the debtor's site would help us get paid 4. I mentioned to them that I am considering to engage commercial collection agency Eventually it has worked and I got paid. I don't think that open treats of action would ever work, and after the action takes place the bridges are burned. If you still work with them, consider to involve factoring agency to pay you upfront and dealing with them for collection. You would have to raise your rate to protect your margins as these agencies charge 25% or more to do it.
I worked as a freelancer in Germany for most of my life.
There is a culture of paying as a last resort with almost every client I had in that time, invoices were never paid on time and only after months of back and forth or by initiating collection through the courts (Vollstreckung). Deutsche Telekom owed me 86000 Euros and it cost me 7000 Eur in attorney and court fees to get it two years later. If there's anything I can give anyone for advise when doing business with Europeans, it is don't unless you get paid a sum up front.
like a dialog box that pops up every day if your client hasn't paid their invoices... maybe something like "i'm sorry but your company is run by douchebag that stooge on thier contractors... if you really want to use this software without annoying "bugs", spam, popups and weird easter eggs, try complaining to your boss"