The client seems to be always delaying the payment to the point I have to pull the plug and then he immediately pays. However, I don't like to stretch that far every time. Sending the email invoice reminder does not seem to work.
Do you frequently face such a situation; if so, How do you handle such clients?<p>I have few ideas in mind (do you use any of these?):<p>1) Levy a penalty for not paying on time.<p>2) send phone reminders
I work in a collection company. If you want more detailed help please let me know.
Firstly: you have to legally secure your payment in case your client makes problems in the future. That means a written contract that specifies what you do, when and when he pays. This should be signed by your Client, clearly in full name and company stamp.<p>In the contract you include interests for non payment (there are limitations - depends on the country). You should give him bonus for paying on time (eg. 5% off).<p>Give a short time for complaint - include a clause that if no complaint is officially filed the service is deemed accepted.<p>Ask the Client to give you a confirmation when he receives your invoice, and when your service is performed/received. Keep track of everyting you do for him and confirm in writing (e-mail is enough) that he accepts it.<p>Please NEVER trust anyone - I know small family businesses with over $100K of unpaid invoices. Trust is good, but everything changes when you realise you were screwd and did nothing to prevent it.<p>Practice shows that calling every single day is an efficient motivator. Your Client probably delays payments to others as well, when you bother him a lot you'll be the first he pays to.<p>Give deadlines and keep them. Ask him always to pay today, not tomorrow, not by the end of the week. Escalate sanctions. If you shoot all your weapons in the beginning, you will have nothing to say to him later. So first tell him that if doesnt pay today, you will remind him every day. Then tell him that he lost his bonus, then that you will charge interests, then that you will stop the service, then that you will contact a debt collection agency/lawyer.<p>Ask him to make smaller partial payments (could be use in court as a debt acknowledgement.<p>Be always mentally/financially prepared you'll not receive these payments at all. And act fast, statistics show that succes rate drops dramatically when invoices are older than 6 months.<p>Cheers!
No penalties. Diplomacy.
Forcing penalties is acknowledging that you lost. Lawyers love that everyone-lost-lawyer-wins attitude.<p>The best way to adjust client's "too-busy-for-me" attitude is to push client's weak spot.<p>It could be delaying deliverable (until fully paid), it could be disabling features (until fully paid), it could be threat of blogging about client's ability to pay (scares the shit out of clients who are thriving for public impression of success), it could be requirement to pay upfront 50%-100% of contract cost.<p>The key is to be subtle but clear without threats or pressure by presenting your game as business as usual, giving client clear and easy way to solve all issues by paying.
Explain to him that his late payment is causing you difficulty. Make this very clear.<p>Then, refuse to start new work until the previous job is paid up (or... insist on payment in advance).<p>This will result in you either getting paid on time (or early), or the client going elsewhere.<p>Either way... the problem client is solved.
I had a client that was most always 2-3 months behind paying me. I simply laid it out for them. I need to get paid or I cannot support my family. I will also have to take on other work to make ends meet. I was just being honest with them. Nobody is going to look out for me, but me.
I signed on to HN just to answer this question (I've consulted for 8 years). If you continue to allow this "client" to treat you like a beggar pleading for a crust of bread, it is YOUR FAULT, not his.<p>From now on, get full payment in advance. Explain to him why. Give him the truth.<p>Contracts are often more trouble than they're worth. You need leverage. If you have that, use it. And refuse to do any more work until you're 1) paid in full and 2) paid in advance.<p>If you don't do this, your problems will continue and you will have no one to blame but yourself.