[consulting] Re: consulting Digest, Vol 9, Issue 15

Wed Aug 16 16:19:43 UTC 2006

I agree with Henri that sometimes it's not even worth it to go to court. At
a shop I worked for we had some moderate success just by having our lawyer
send a brief written detail of what is owed and why and that we intend to
seek legal recourse if a payment schedule is not agreed upon.

Sometimes the fact that the letter is on a lawfirm's stationary is enough to
let them know you mean business and motivate them.  It shouldn't cost too
much to have a lawyer do that.

eric

On 8/16/06, consulting-request at drupal.org <consulting-request at drupal.org>
wrote:
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> Today's Topics:
>
>    1. Proper Collections Procedure (Michael Haggerty)
>    2. Re: Proper Collections Procedure (Khalid B)
>    3. Re: Proper Collections Procedure (Henri Poole)
>    4. Re: Proper Collections Procedure (Eric Goldhagen)
>    5. Re: Proper Collections Procedure (Bill Fitzgerald)
>    6. Re: Proper Collections Procedure (Evan Leibovitch)
>    7. Re: Proper Collections Procedure (Trevor Twining)
>
>
> ----------------------------------------------------------------------
>
> Message: 1
> Date: Wed, 16 Aug 2006 10:48:35 -0400
> From: "Michael Haggerty" <mhaggerty at trellon.com>
> Subject: [consulting] Proper Collections Procedure
> To: "'A list for Drupal consultants and Drupal service/hosting
>         providers'"     <consulting at drupal.org>
> Message-ID: <20060816145031.0BF68138C51 at drupal3.drupal.org>
> Content-Type: text/plain;       charset="us-ascii"
>
> I have a question for other members of this list about how they handle
> collections.
>
> I have a complicated matter with a client and their delinquent invoices.
> They are refusing to make payment on fairly large bill after they have
> received a lot of custom code and already launched the site on their own
> servers. The justification they cite is cost overruns in the development
> process, most of which were for features not included in the original spec
> but which they themselves requested. The overruns were within 15% of the
> total project price.
>
> I have tried dealing with them reasonably for several weeks and received
> multiple payment promises that were broken. The bill is now quite a bit
> overdue and it's taking a huge amount of time dealing with all the
> craziness
> around their tab (they keep requesting further clarification about things
> that were done months ago and it's eating up my team's time). They are
> dealing with other Drupal shops at this point and there is no way for me
> to
> cut off services. What really burns me is the site was for a third party
> who
> has already paid them and the cost of development was less than 1/8 of
> what
> the third party paid.
>
> Anyone have any ideas?
>
> M
>
>
>
>
> ------------------------------
>
> Message: 2
> Date: Wed, 16 Aug 2006 11:12:28 -0400
> From: "Khalid B" <kb at 2bits.com>
> Subject: Re: [consulting] Proper Collections Procedure
> To: mhaggerty at trellon.com,      "A list for Drupal consultants and Drupal
>         service/hosting providers"      <consulting at drupal.org>
> Message-ID:
>         <4a9fdc630608160812x8d7ed39x42033123d810714f at mail.gmail.com>
> Content-Type: text/plain; charset=ISO-8859-1; format=flowed
>
> First collect all the info you have on their requests that caused
> the cost overruns, and make sure that it is documented. This will
> prove useful for your case with their management and in courts
> should that be necessary.
>
> Try contacting others in the hierarchy in the company if your
> contact is ignoring you. They may end up just handing it over
> to your contact anyway, but at least someone else knows about
> it now.
>
> Prepare a complete document recounting the history of the
> project, original estimates, their requests causing the overruns,
> and your repeated requests for payments. Present it to higher
> up management.
>
> Courts are the last resort, and the documents above will help
> if you wish to go that route.
>
> On 8/16/06, Michael Haggerty <mhaggerty at trellon.com> wrote:
> > I have a question for other members of this list about how they handle
> > collections.
> >
> > I have a complicated matter with a client and their delinquent invoices.
> > They are refusing to make payment on fairly large bill after they have
> > received a lot of custom code and already launched the site on their own
> > servers. The justification they cite is cost overruns in the development
> > process, most of which were for features not included in the original
> spec
> > but which they themselves requested. The overruns were within 15% of the
> > total project price.
> >
> > I have tried dealing with them reasonably for several weeks and received
> > multiple payment promises that were broken. The bill is now quite a bit
> > overdue and it's taking a huge amount of time dealing with all the
> craziness
> > around their tab (they keep requesting further clarification about
> things
> > that were done months ago and it's eating up my team's time). They are
> > dealing with other Drupal shops at this point and there is no way for me
> to
> > cut off services. What really burns me is the site was for a third party
> who
> > has already paid them and the cost of development was less than 1/8 of
> what
> > the third party paid.
> >
> > Anyone have any ideas?
> >
> > M
> >
> >
> > _______________________________________________
> > consulting mailing list
> > consulting at drupal.org
> > http://lists.drupal.org/mailman/listinfo/consulting
> >
>
>
> ------------------------------
>
> Message: 3
> Date: Wed, 16 Aug 2006 08:24:19 -0700
> From: Henri Poole <poole at civicactions.com>
> Subject: Re: [consulting] Proper Collections Procedure
> To: mhaggerty at trellon.com,      A list for Drupal consultants and Drupal
>         service/hosting providers       <consulting at drupal.org>
> Message-ID: <1155741859.5052.47.camel at localhost>
> Content-Type: text/plain
>
> It's quite difficult to recover after the fact. I've found that the
> negative energy (and impact on the organization and other clients) is
> almost not worth the trouble.
>
> In the future, you might require upfront retainer that covers your
> intended billings. At CivicActions, we require all of our clients to pay
> a retainer that covers our estimated billings for the coming month.
>
> We also provide weekly reports that indicate where we are in hitting our
> estimates, so that they are not suprised if we have mis-calculated how
> much time something will take.
>
> We also have setup our billing rates so that we have some wiggle room
> for discounts after the fact, which is occasionally necessary in order
> to maintain positive client relationships.
>
> I'm not sure how much help this is, after the fact, but I certainly
> empathize with you. It sucks when this happens.
>
> -Henri
>
> On Wed, 2006-08-16 at 10:48 -0400, Michael Haggerty wrote:
> > I have a question for other members of this list about how they handle
> > collections.
> >
> > I have a complicated matter with a client and their delinquent invoices.
> > They are refusing to make payment on fairly large bill after they have
> > received a lot of custom code and already launched the site on their own
> > servers. The justification they cite is cost overruns in the development
> > process, most of which were for features not included in the original
> spec
> > but which they themselves requested. The overruns were within 15% of the
> > total project price.
> >
> > I have tried dealing with them reasonably for several weeks and received
> > multiple payment promises that were broken. The bill is now quite a bit
> > overdue and it's taking a huge amount of time dealing with all the
> craziness
> > around their tab (they keep requesting further clarification about
> things
> > that were done months ago and it's eating up my team's time). They are
> > dealing with other Drupal shops at this point and there is no way for me
> to
> > cut off services. What really burns me is the site was for a third party
> who
> > has already paid them and the cost of development was less than 1/8 of
> what
> > the third party paid.
> >
> > Anyone have any ideas?
> >
> > M
> >
> >
> > _______________________________________________
> > consulting mailing list
> > consulting at drupal.org
> > http://lists.drupal.org/mailman/listinfo/consulting
>
>
>
> ------------------------------
>
> Message: 4
> Date: Wed, 16 Aug 2006 11:30:53 -0400
> From: Eric Goldhagen <eric at openflows.org>
> Subject: Re: [consulting] Proper Collections Procedure
> To: <consulting at drupal.org>
> Message-ID: <p06100540c108e8c29559@[192.168.100.6]>
> Content-Type: text/plain; charset="us-ascii" ; format="flowed"
>
> At 11:12 AM -0400 8/16/06, Khalid B wrote:
> >First collect all the info you have on their requests that caused
> >the cost overruns, and make sure that it is documented. This will
> >prove useful for your case with their management and in courts
> >should that be necessary.
> >
> >Try contacting others in the hierarchy in the company if your
> >contact is ignoring you. They may end up just handing it over
> >to your contact anyway, but at least someone else knows about
> >it now.
> >
> >Prepare a complete document recounting the history of the
> >project, original estimates, their requests causing the overruns,
> >and your repeated requests for payments. Present it to higher
> >up management.
> >
> >Courts are the last resort, and the documents above will help
> >if you wish to go that route.
>
> The most important thing is to do all communication in writing from
> now on. No phone calls with promises of being paid. Written emails
> with payment schedules. Don't allow phone calls that can be later
> debated -- get everything in writing for accountability and clarity.
>
> As Khalid points out, you want payment, not a day in court. Even if
> you win in court you waste a lot of time and money in the process.
> More than once I had to also agree to take a percentage of what was
> owed, just to get it over with and avoid the lawyer fees.
>
> Going up the hierarchy of the company if there is one is the best
> place to start.
>
> Do you know anyone that can act as an unofficial mediator? I once had
> a professional contact that also did work for the same client talk
> them into paying just by bringing it up and embarrassing them.
>
> You could simply refuse to hand over the code until they pay. Will it
> cost them more to hire someone else to re-create it than it would to
> complete payment? That can be a motivator for them.
>
> But, many of your options will be defined by the wording of the work
> agreement or contract that you are doing development work under. Many
> agreements have provisions for mediating these issues.
>
> Best of luck.
>
> --Eric
>
> >On 8/16/06, Michael Haggerty <mhaggerty at trellon.com> wrote:
> >>I have a question for other members of this list about how they handle
> >>collections.
> >>
> >>I have a complicated matter with a client and their delinquent invoices.
> >>They are refusing to make payment on fairly large bill after they have
> >>received a lot of custom code and already launched the site on their own
> >>servers. The justification they cite is cost overruns in the development
> >>process, most of which were for features not included in the original
> spec
> >>but which they themselves requested. The overruns were within 15% of the
> >>total project price.
> >>
> >>I have tried dealing with them reasonably for several weeks and received
> >>multiple payment promises that were broken. The bill is now quite a bit
> >>overdue and it's taking a huge amount of time dealing with all the
> craziness
> >>around their tab (they keep requesting further clarification about
> things
> >>that were done months ago and it's eating up my team's time). They are
> >>dealing with other Drupal shops at this point and there is no way for me
> to
> >>cut off services. What really burns me is the site was for a third party
> who
> >>has already paid them and the cost of development was less than 1/8 of
> what
> >>the third party paid.
> >>
> >>Anyone have any ideas?
> >>
> >>M
> >>
> >>
> >>_______________________________________________
> >>consulting mailing list
> >>consulting at drupal.org
> >>http://lists.drupal.org/mailman/listinfo/consulting
> >>
> >_______________________________________________
> >consulting mailing list
> >consulting at drupal.org
> >http://lists.drupal.org/mailman/listinfo/consulting
>
>
> --
> -------------------------------------------
> Openflows Networks Ltd.
> New York | Toronto | Montreal | Vienna
> http://why.openflows.org
> People are intelligent. Machines are tools.
>
>
> ------------------------------
>
> Message: 5
> Date: Wed, 16 Aug 2006 08:35:32 -0700
> From: Bill Fitzgerald <bill at funnymonkey.com>
> Subject: Re: [consulting] Proper Collections Procedure
> To: A list for Drupal consultants and Drupal service/hosting providers
>         <consulting at drupal.org>
> Message-ID: <44E33B44.7020700 at funnymonkey.com>
> Content-Type: text/plain; charset=ISO-8859-1; format=flowed
>
> I have to echo what Henri said -- after the code has been delivered, you
> don't have a lot of recourse -- basically, work your way up the
> hierarchy of your client's organization, or take it to the courts.
>
> And, at the end of the day, this requires time and energy that can be
> put to more constructive uses.
>
> The cost of these interactions often goes far beyond the dollar amounts
> in question, but that's a decision each company/individual needs to make
> on their own.
>
> Good luck with this -- it's a draining and frustrating situation. I hope
> it works out, quickly, and as cleanly as possible.
>
> Henri Poole wrote:
>
> >It's quite difficult to recover after the fact. I've found that the
> >negative energy (and impact on the organization and other clients) is
> >almost not worth the trouble.
> >
> >In the future, you might require upfront retainer that covers your
> >intended billings. At CivicActions, we require all of our clients to pay
> >a retainer that covers our estimated billings for the coming month.
> >
> >We also provide weekly reports that indicate where we are in hitting our
> >estimates, so that they are not suprised if we have mis-calculated how
> >much time something will take.
> >
> >We also have setup our billing rates so that we have some wiggle room
> >for discounts after the fact, which is occasionally necessary in order
> >to maintain positive client relationships.
> >
> >I'm not sure how much help this is, after the fact, but I certainly
> >empathize with you. It sucks when this happens.
> >
> >-Henri
> >
> >On Wed, 2006-08-16 at 10:48 -0400, Michael Haggerty wrote:
> >
> >
> >>I have a question for other members of this list about how they handle
> >>collections.
> >>
> >>I have a complicated matter with a client and their delinquent invoices.
> >>They are refusing to make payment on fairly large bill after they have
> >>received a lot of custom code and already launched the site on their own
> >>servers. The justification they cite is cost overruns in the development
> >>process, most of which were for features not included in the original
> spec
> >>but which they themselves requested. The overruns were within 15% of the
> >>total project price.
> >>
> >>I have tried dealing with them reasonably for several weeks and received
> >>multiple payment promises that were broken. The bill is now quite a bit
> >>overdue and it's taking a huge amount of time dealing with all the
> craziness
> >>around their tab (they keep requesting further clarification about
> things
> >>that were done months ago and it's eating up my team's time). They are
> >>dealing with other Drupal shops at this point and there is no way for me
> to
> >>cut off services. What really burns me is the site was for a third party
> who
> >>has already paid them and the cost of development was less than 1/8 of
> what
> >>the third party paid.
> >>
> >>Anyone have any ideas?
> >>
> >>M
> >>
> >>
> >>_______________________________________________
> >>consulting mailing list
> >>consulting at drupal.org
> >>http://lists.drupal.org/mailman/listinfo/consulting
> >>
> >>
> >
> >_______________________________________________
> >consulting mailing list
> >consulting at drupal.org
> >http://lists.drupal.org/mailman/listinfo/consulting
> >
> >
> >
> >
> >
>
>
> --
> Bill Fitzgerald
> http://www.funnymonkey.com
> Tools for Teachers
> 503.897.7160
>
>
>
> ------------------------------
>
> Message: 6
> Date: Wed, 16 Aug 2006 11:43:16 -0400
> From: Evan Leibovitch <evan at telly.org>
> Subject: Re: [consulting] Proper Collections Procedure
> To: A list for Drupal consultants and Drupal service/hosting providers
>         <consulting at drupal.org>
> Message-ID: <44E33D14.8080707 at telly.org>
> Content-Type: text/plain; charset=ISO-8859-1; format=flowed
>
> Bill Fitzgerald wrote:
>
> > I have to echo what Henri said -- after the code has been delivered,
> > you don't have a lot of recourse -- basically, work your way up the
> > hierarchy of your client's organization, or take it to the courts.
>
> There's one other route, which is certainly not for everyone -- a
> commercial collection agency.
> They'll give you a percentage of the outstanding balance (it could be as
> low as 50%) -- but you'll get it up-front and they'll handle the rest of
> the collection. They effectively buy your receivable; at that point you
> can wash your hands of the situation, in return for your willingness to
> recover a fraction of the intended payment.
>
> Depending on many variables, this option -- expensive at it is -- may
> still be cheaper than going to court.
>
> - Evan
>
> PS: If you choose not to use the collection agency, don't forget to
> report the bad debt to D&B and other credit bureaus. Maybe even the
> threat to do this will help straighten the client out.
>
>
> ------------------------------
>
> Message: 7
> Date: Wed, 16 Aug 2006 11:51:36 -0400
> From: Trevor Twining <email.me at trevortwining.info>
> Subject: Re: [consulting] Proper Collections Procedure
> To: mhaggerty at trellon.com,      A list for Drupal consultants and Drupal
>         service/hosting providers       <consulting at drupal.org>
> Message-ID: <44E33F08.4010905 at trevortwining.info>
> Content-Type: text/plain; charset=ISO-8859-1; format=flowed
>
> Hello everyone, first time poster, lurking for a while.
>
> I've had to do this a few times too, and I've found a few things that
> have helped.
>
> One way to get the money out of them and maintain good relations is to
> propose you take the outstanding amount (possibly negotiating it down),
> and because it's in dispute the two organizations donate it to a charity
> of their choosing. The company actually pays the money out, and the two
> of you get the joint publicity of presenting a cheque to an org, plus
> you've turned something negative into something positive.
>
> For all my clients I charge deployment separately from development. I
> don't release any code until the development project is completely
> signed off and paid for. Then I charge a nominal fee for deployment on
> outside servers. That way I maintain control over the product until I am
> compensated, and if they stiff me on deployment, I'm not out for the
> entire project.
>
> Hope this helps.
>
> Michael Haggerty wrote:
> > I have a question for other members of this list about how they handle
> > collections.
> >
> > I have a complicated matter with a client and their delinquent invoices.
> > They are refusing to make payment on fairly large bill after they have
> > received a lot of custom code and already launched the site on their own
> > servers. The justification they cite is cost overruns in the development
> > process, most of which were for features not included in the original
> spec
> > but which they themselves requested. The overruns were within 15% of the
> > total project price.
> >
> > I have tried dealing with them reasonably for several weeks and received
> > multiple payment promises that were broken. The bill is now quite a bit
> > overdue and it's taking a huge amount of time dealing with all the
> craziness
> > around their tab (they keep requesting further clarification about
> things
> > that were done months ago and it's eating up my team's time). They are
> > dealing with other Drupal shops at this point and there is no way for me
> to
> > cut off services. What really burns me is the site was for a third party
> who
> > has already paid them and the cost of development was less than 1/8 of
> what
> > the third party paid.
> >
> > Anyone have any ideas?
> >
> > M
> >
> >
> > _______________________________________________
> > consulting mailing list
> > consulting at drupal.org
> > http://lists.drupal.org/mailman/listinfo/consulting
> >
> >
>
>
> --
> ==================================
> Trevor Twining
> Internet Programmer
> http://www.trevortwining.info
> email.me at trevortwining.info
>
>
>
> ------------------------------
>
> _______________________________________________
> consulting mailing list
> consulting at drupal.org
> http://lists.drupal.org/mailman/listinfo/consulting
>
>
> End of consulting Digest, Vol 9, Issue 15
> *****************************************
>
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