I’ve just finished working as a freelancer on a project which had a few issues and over ran and didn’t really work that well. The bits I worked on were fine and to spec so I billed the full amount, but because the whole project was not a success and they didn’t make any money on it they are proposing to only pay some of the bill (50%). It’s too much money to write off, which I have done in the past. I’d also like to maintain a good relation with the customer so I don’t want to get all legal and aggressive straight away.

Any suggestions on the next move? I was going to offer a reduced rate for some of the work as a compromise (about 90% over all) just to keep the good relationship. If that doesn’t work then I suppose it is small claims, etc. I was thinking that if I do need to go down that route then I’d rather claim for the full, original amount as the relationship will already be soured. Would offering the reduced rate compromise this? And advice gratefully received.

Im a freelancer.. people expect stuff for nowt.. does my head in!

Try joining a freelance forum and asking this question rather than a mountain bike forum 😕

just pu without prejudice on your letter – it is not legally binding and they will note that this means you intend to get all legal on them – this may be a good or a bad thing though.

Probably best to explain you are sympathetic to their situation but you delivered all that was asked of you so you feel you have fulfilled the contract, Ask them to hit those who failed to deliver rather than those who did.

Would you really want to work with them again?
Do you have to?
Would the consequences of annoying them be ultra critical to your business?

this may affect how angry you wish to be

If that doesn’t work then I suppose it is small claims, etc

Not sure you can TBH, I don’t think it caterers for business debt

Try joining a freelance forum and asking this question rather than a mountain bike forum

STW knows all. I’m a regular here but not a big hitter 🙂

Ask them to hit those who failed to deliver rather than those who did.

That was them IMHO

Would you really want to work with them again?
Do you have to?
Would the consequences of annoying them be ultra critical to your business?

Probably not critical but they do have interesting projects. They are generally good to work with, it’s just gone a bit wrong this time.

You could offer them payments terms eg installments over a year of a deferral on part of the debt?

My company is terrible at paying its suppliers, using them as free banking to manage cash flow. Some of the more savvy ones starting sending invoices for interest on the outstanding debt, which normally means they get paid promptly. The naive ones just endless email / phone for months and eventually get paid (up to 6 months late).

I’ve been a freelancer for almost 20 years. Seems to me that they’re trying to pass the hit they’ve taken on, what I assume was, a fixed price contract onto you.

There’s also the question of what the T’a & C’s in your contract with them say. However if you delivered what was required, and to the necessary level of quality they have no reason not to pay you or to offer a reduced rate. Unless there’s provision for that in the contract.

Being the t****r I am, I’d be inclined to get somebody to run an insolvency report on them right now just to make sure they have the ability to pay me, and so i know who I need to go after if they don’t.

Also worth noting that if your payment terms state 30 days you are legally entitled to add 8% above base rate if payment is late.

just put without prejudice on your letter

Just looked that up, that’s useful, ta

Seems to me that they’re trying to pass the hit they’ve taken on, what I assume was, a fixed price contract onto you.

That’s it, although the ‘contract’ is a few emails which complicates things a bit.

Lesson learned there – before you do anything like that make sure you define what you are doing, you know, the scope, deliverables and costs. Then it makes it less subjective when stuff like this happens. It will come down to a negotiation.

Ask them to hit those who failed to deliver rather than those who did.
That was them IMHO

So are you bothered about upsetting an employer who makes you both look stupid and loses you money?

That’s it, although the ‘contract’ is a few emails which complicates things a bit.

lesson in there, IMHO

not being smug, just have life experience of making life hard for myself with “wooly” financial arrangements.

The clue is in the term Free lancing, they hired you because if it failed then they got you free, its going to take a lot of timeand effort and money to get paid, but they probably have staff employed to just not pay you and many others as well.

Make a fuss send letters and emails, finally a visit to their office with a clipboard printed on a sheet of paper, this company dont pay their bills, so im staying here till they pay, and show it to everyone who enters.

Worked for me with a restraunt.

The clue is in the term Free lancing, they hired you because if it failed then they got you free

This may or may not be from project’s weird and wonderful world.

The clue is in the term Free lancing, they hired you because if it failed then they got you free

If it works do you go lancing then?

The bits I worked on were fine and to spec so I billed the full amount, but because the whole project was not a success and they didn’t make any money on it they are proposing to only pay some of the bill (50%).

So, you did your job and delivered what was agreed. Bill them full amount, let them pay. If its less, then take the appropriate action.

This video says it best to me http://vimeo.com/22053820

It’s not your problem they messed the whole thing up, it’s theirs. I had a boss who used to try that on and without fail, the contractor/agency would just threaten to sue and get their money in the end.

Just as an additional point. If you take the hit and accept a lower rate/payment. Then whats to stop that particular customer doing that to you again in the future ?.

If you can patch things up with this customer, then if it were me, I’d invoice them more frequently, during the project.

Seems they are less bothered about the relationship than you are…full amount as long as you have “some” evidence of what was agreed. Any other subbers on the project that could vouch for you – they might be getting the same treatment. There’s no need to get rude or aggressive but firm and stay firm.

Im sure you will find this video informative some very good advise! http://vimeo.com/22053820

I know hindsight won’t help now but it might in the future. I used to negociate regular payments as work progressed; no pay, work stopped. This limited the damage when one customer went bankrupt.

Do you have someone else who can contact them? In our business my wife made first contact, then me (Ms Nice, Mr Menatally Unstable). If fear of me didn’t work in a week then the accountant rang to point out how much it would cost if we got legal, then I rang again… . By that time anyone that was solvent had a chequue in the post – or had sent somebody round with it. I can’t remember any adverse effects on getting new business, people know when they are in the wrong, besides they were dealing with Ms Nice again.

If they do really well and make loads of money in future.

Are they going to pay you double?

Didn’t think so, think that gives you the answer. Screw them, they agreed to pay you a figure for work done, you did they work so they owe you for it.

It’s all been said ^^^. With nothing (much) in writing, you may find it hard to get the full outstanding amount as they’ll know there’s very little legal recourse.

Maybe treat it as a learning experience (after putting up a decent fight) and get everything down in writing next time.

Best way to deal with this in an initial face to face meeting. You do need to be prepared though, almost to the point of a script, prepare what you want to say all the key points about what you did and the deliverables. Ask for the full amount due, don’t be apologetic its a business arrangement they have with you.

You have some leverage with them as if they don’t pay you you can register non payment with the credit bureaus.

Statement of the obvious but they are trying to squeeze you on the basis you need them more than they need you.

These are tough times, in future I would ensure you move to weekly or at least monthly billing. A good friend of mine recently told a good client it was payment in advance from now on, they suggested 50/50 and he was quite firm, upfront or no work.

Just because you don’t have a formal contract doesn’t mean you can’t sue-in fact that’s nonsense.

Offer the 10% off for quick settlement, without prejudice. Check the Late Payment of Commercial Debts act and you man be able to sue for interest too.

Suing doesn’t need to ruin the relationship, if they like your work and are prepared to pay.