Protection again slow/no payment when dealing with services companies

[wjgray]

So, I took a job when contacted by a consulting firm in Ohio here near Seattle, WA. Piece of cake, double memory in 3 desktops and one server and do a general cleaning/diagnostic of each machine in an automobile repair shop. I estimated the job could take anywhere from 2-6 hours depending on what was found in diagnostic. They were happy and sent along a contract which I signed and returned promptly. They scheduled the appointment.

The machines were very clean and I finished the task in 2.5 hours. The repair shop manager seemed very pleased and I had him sign the service order noting time start and end. I sent an invoice to the service organization in Ohio that afternoon. The representative there acknowledged receipt and said she would pass it to accounts payable.

This was over 30 days ago and I still have not received payment. I sent a second invoice last week with a note to accounts payable asking if they had received it as I am sure it must have been "lost in the shuffle".

Admittedly, this is a small amount and I am not going to sweat it much. But, my experience leads me to wonder if doing business with service organizations is such a good idea when compared to working for the clients directly.

Does anyone else have experiences/opinions along these lines?

What recourse does the small-guy computer tech have to get paid in a timely manner?

What should I do if they get to an aged invoice of 60 days?

Was there something I could have / should have done up front to protect my investment in their solution?

Thanks!

 

[14049752]

If it's only been a little over 30 days, they'll probably still pay you without any problem. I've noticed that most places like that really drag their feet, to the point where I actually tell them up front that I require credit card payment when the service is complete.
The best thing to do is just make a friendly phone call to them, asking when you can expect the check. Write down when you called, who you spoke to, and their answer. If you have to call back, have that information handy and ask for a check number.

 

[lazzo71]

Also keep in mind, most businesses take care of the financial side of things once a month ie:make their payments. You are probably in their list of things to do.
If you haven't received anything in the next couple of weeks, I would send them a letter.

 

[hawks5999]

What were the payment terms in the contract? Did you have your lawyer review the contract before you signed?
Most places specify Net30 terms on payment, but I make all invoices due on receipt. In the case of working with an agency in Ohio (btw Sarcom?) you'll be somewhat at the mercy of their A/P since you aren't going to pursue an inter-state suit for 2.5 hours of work.

 

[ebs]

Theres an important question which hasn't been answered - what were the terms of the invoice?

It's also an example of why having proper credit control procedures are important - you need a checklist - for example

- Send Invoice
- Day 7 - Give a ring to check they have received with no problems
will help no end, as if you wait 30 days before asking, they have an excuse
- Day 14 - Send reminder email that invoice is due within 7 days, if they have any problems, give you a call
- Day 22 - Give a call, asking if they've paid the invoice, and if not, when they expect to.
- Due + 8 Days - Send Letter - first credit control notice
- Due + 10 Days - Give Call - check if recieved and when will be dealt with.
- Due + 15 Days - Send Letter - second credit control notice
- Due + 17 Days - Give Call - check if recieved and when will be dealt with.
- Due + 25 Days - Send Letter - final notice, 7 days to pay or we'll instruct our debt recovery facility to take over the debt
- Due + 35 Days - Pass to debt recovery to handle.

I haven't got the process to hand, so the days may be wrong, but thats the gist of it - we always remain friendly, and remind customers that if they're having financial difficulties, we can look at alternative methods of payment (installments).

Ultimately, we will instruct a no win no fee debt recovery agency to recover the debt (they'll take 20%). It's important to follow the process, even if its a previously good client - extending more credit when they can't afford to pay what they owe is not a good idea

 

[Wheelie]

Most businesses that do more than $5MM per year pay at 30 to 45 days. Standard practice from what I've experienced They want to maximize the interest they earn on their cash accounts (i.e. they have a CFO somewhere in the org.)

And, yes, what were the terms on your contract? Should've been specified there.