[Question] what to do with clients who don't pay?

[SilverNodashi]

I recently did some work for a client who only paid half of the original agreed upon amount for the work done.

Now I can't get the money (R3000) out of him, he doesn't answer my calls or emails, or return voice mails / messages left at receptionist.

So, what do I do to get the money? I'm thinking I should just blacklist him - I'm tired of people who think they can walk all over me. BUT, what's the correct ways in doing this, if this is the only way I can (possibly?) get the money from the client?

Or, what other steps can I take?

[Dave A]

Hand over to a debt collector that works on a percentage of money recovered and/or write it off as a bad debt.

If I know they're genuinely in trouble and they've played as fair as they can I tend to just write it off. It's when they stuff me around I go the whole way.

[BBBEE_CompSpec]

There is a very easy way to get moneys less than R7000-00 out of a client. How is your company registered?

[BBBEE_CompSpec]

The DTI does have a system to blacklist businesses and any business that does work for them. But blacklisting the company does not do anything in getting your money back. What it does do is create large scale unemployment.

[SilverNodashi]

Hand over to a debt collector that works on a percentage of money recovered and/or write it off as a bad debt.

If I know they're genuinely in trouble and they've played as fair as they can I tend to just write it off. It's when they stuff me around I go the whole way.

The guy has got money, believe me, that's not the problem. He recently employed 2 new staff members, and spend about R70K on new equipment.

There is a very easy way to get moneys less than R7000-00 out of a client. How is your company registered?

The company is registered as a CC. Please tell me more about this.

The DTI does have a system to blacklist businesses and any business that does work for them. But blacklisting the company does not do anything in getting your money back. What it does do is create large scale unemployment.

I understand that, but won't it make it more difficult for him / his company todo trading, and thus force him to settle his account?

[Dave A]

Debt collecting is about doing the right thing at the right time. If you're at the stage of being ignored, you need to up the anti.

I had a debtor that tried to fob me off with BS yesterday. Basically told me we were contracted to provide a quote, not an inspection, and then got far too busy to continue the conversation. So I faxed this letter:

Att: Mrs.
BY FAX TO: 6th November 2009


Dear Mrs. ,

Re: Account for entomological inspection at

Our telephone conversation of this morning refers.

I respectfully point out that contrary to your contention of this morning, the fee raised is for an inspection and not a quotation. Following please also find your endorsement of the fee to be raised in this regard.

There being no objection raised to the findings of our inspection and report thereon, I regret that should we not receive payment of our outstanding invoice no. in the amount of R400.00 by the close of business on Tuesday 10th November 2009, the matter shall be handed over to our collection agents to pursue further.

Yours sincerely

Following was the signed off instruction and the invoice. By the end of yesterday the money was in my account and she had found the time to call me to try to pick a fight. I simply thanked her for her prompt payment and constructive criticism.

Nothing works every time, but if you have a process you improve your odds. We had delivered on every undertaking we had made through the whole transaction, so there was no reason for the debtor to believe that we would not do the same here.

Next Friday she would have been handed over, with whatever consequences that might have entailed (some things are best left to people's imagination) and I'd get on with the job of finding customers who do pay.

[SilverNodashi]

Thanx for the input Dave.

I just don't know if this will work as much. I had another client (who I also want to pursue) with a similar problem, and she had her attorney call me and tell me to cancel the invoice and any further communications with the client. Her reason was that I was too arrogant - irrespective of the amount of time I put in fixing issues on their PC's and network. She felt I was too arrogant and refuse to pay me.

So, again, what do I do?

[Dave A]

Arrogance is a good reason for your client not to use your services again, but it's a pretty poor defence in a court of law as a reason for non-payment.

[Dave A]

ps. You might want to read this - I noticed it came up in the similar threads below, and it does have some relevance.

[BBBEE_CompSpec]

I do work for multi billionaires. They have money. If they don't want to pay they don't. Its a game to them. You have to get the authorities to force them to pay.

The NCR regulates how Debt Collectors work. If a Debt Collector works against the grain, you as creditor lose. Not the Debt Collector. The regulations are clear and the Debtor is well aware of the rules.

This matter is below R7000-00. It will cost you for the delivery of a Final Demand and a Summonds, and a hour in court. You don't need legal council.

[IanF]

This matter is below R7000-00. It will cost you for the delivery of a Final Demand and a Summonds, and a hour in court. You don't need legal council.

Shaun
Tell us more I also have some debts below R7k that if collected would make a good bonus.

[BBBEE_CompSpec]

I need to see two CCMA clients on Monday, then pop into Total in Rosebank. I was planning to come and see you about those folders you are advertising on your web site. I will show you how then. That advice won't cost you a cent.

[IanF]

Shaun
Sounds good

[SilverNodashi]

Does anyone know of a reputable debt collector in the JHB area that I could make use of?

[desA]

I recently did some work for a client who only paid half of the original agreed upon amount for the work done.

Now I can't get the money (R3000) out of him, he doesn't answer my calls or emails, or return voice mails / messages left at receptionist.

So, what do I do to get the money? I'm thinking I should just blacklist him - I'm tired of people who think they can walk all over me. BUT, what's the correct ways in doing this, if this is the only way I can (possibly?) get the money from the client?

Or, what other steps can I take?

A few thoughts:
1. South Africans have an international reputation as clients who do not pay their bills.
2. They often abuse the legal system as cost of recovery often makes it a waste of time.
3. In some countries you can lodge an unpaid claim against the business in question & ask for it to be declared insolvent. (This often gets a sharp response).
4. Adjust your payment structures -
For software projects: 50% upfront / 50% before final release
5. Always use the client's money for material projects, not your own.

I suffered, in my earlier years in business in SA, with people who did not pay their bills. This was one of my original reasons for moving into the wider world.

Contrast this with Nordic countries who are prompt payers & will hound you for your invoice so that they can pay on time. They have a legal framework in Sweden, for instance, which can attach a debtor's assets, sell them & force payment, of unpaid bills. It would be nice if SA could do something similar.