[BNM] Harsh economic times - protecting ones interests

[Sam Michel]

Hiya Matt,

Horrible situation, sorry to hear it. Been faced with this (sadly) many times in the past.

We use Thomas Higgins to send out letters and also to take legal action to recover small debts when needed, thankfully pretty infrequently. I've had several conversations with other freelancers and companies about payment times getting stretched out.

You can resort to legal action, but if the company is already wobbling, they'll call in the liquidators and you're likely to get very little or nothing. The best situation is to be honest with the client and ask them to settle as much as they can now and put together a payment plan to pay off the remainder.

As a previous post suggested, you're extending them trade credit every time you do more work for them without getting paid, so best to proceed with caution. If you think they're going to be OK but suffering cashflow issues and it's a long-standing relationshipm you could ask for part-payment up-front especially for small jobs.

One thing that caught us out in the past was invoicing on the same terms for all jobs big and small. It costs the same to chase an invoice for £100 as for £1,000. Consider the time, hassle and effort involved, might be worth having a minimum amount for credit invoices and asking for small jobs to be paid in advance or on a 50%:50% split.

Good luck. Nasty position to be in. Could be worse, just seen a list of creditors for a not-to-be-named dotcom and several of their suppliers are out over £10k. Not a nice Christmas present.

Toodle Pip

Sam

-----Original Message-----
From: bnmlist-bounces at brightonnewmedia.org [mailto:bnmlist-bounces at brightonnewmedia.org] On Behalf Of Adam Mould
Sent: 02 December 2008 13:47
To: Brighton New Media
Subject: Re: [BNM] Harsh economic times - protecting ones interests

gits!...

I've been there and it's not nice... :-(
I guess TRY and put in PART invoices for work signed off to date  
rather that wait till the end...
If you don't mind getting heavy... I used: http:// 
www.thomashiggins.com/ before... they will, for £2 issue a LETTER  
BEFORE ACTION on your behalf... if the client doesn't bite then the  
Solicitors chase the debt... I suppose it all depends on whether they  
are worth keeping as a client... the 'good' ones should let you know  
if they are struggling and perhaps offer part payments themselves...

Ad


On 2 Dec 2008, at 13:34, Derek Clarke wrote:

> If they go under there's nothing you can do to get paid.
> Non-preferential creditors get very little in such circumstances.
>
> So stop throwing good money after bad and stop any work you're doing
> for them in favour of paying clients (if you have any!).
>
> It also depends upon what sort of corporate entity they are. If
> they're a limited company or plc a possible threat is to take the
> company down yourself in the form of a winding up order. If they have
> some money left they might pay you rather than go down!
>
> Really the best thing to do is not to let a debt grow to this point in
> the first place. You're extending them trade credit every time you
> issue an invoice and it's up to you how much credit you extend to your
> customers. Unfortunately this is easier advice to give than take!
>
> I hope you've also taken precautions like keeping title to all work
> until all bills are paid.
>
> On Tue, Dec 2, 2008 at 1:19 PM, matt zb <bnm at zenbullets.com> wrote:
>>
>> Hi BNM,
>>
>> Some freelancing advice required.
>>
>> I've got a client, who owes me a considerable amount of money, who  
>> I suspect
>> are struggling quite a bit cashflow-wise. They are very over-due  
>> on invoices
>> and are reacting very badly to enquiries.
>>
>> Is there anything I can do to ensure I get paid if they were to go  
>> under, or
>> would receivers take care of that? I'm also worried that if I were  
>> to start
>> any action against them it might push them over the edge.
>>
>> Your thoughts appreciated.
>>
>>
>> matt zb
>>
>>
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