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.
<br><br>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.<br><br>eric<br><br><div><span class="gmail_quote">
On 8/16/06, <b class="gmail_sendername"><a href="mailto:consulting-request@drupal.org">consulting-request@drupal.org</a></b> <<a href="mailto:consulting-request@drupal.org">consulting-request@drupal.org</a>> wrote:</span>
<blockquote class="gmail_quote" style="border-left: 1px solid rgb(204, 204, 204); margin: 0pt 0pt 0pt 0.8ex; padding-left: 1ex;">Send consulting mailing list submissions to<br> <a href="mailto:consulting@drupal.org">
consulting@drupal.org</a><br><br>To subscribe or unsubscribe via the World Wide Web, visit<br> <a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting</a><br>
or, via email, send a message with subject or body 'help' to<br> <a href="mailto:consulting-request@drupal.org">consulting-request@drupal.org</a><br><br>You can reach the person managing the list at<br> <a href="mailto:consulting-owner@drupal.org">
consulting-owner@drupal.org</a><br><br>When replying, please edit your Subject line so it is more specific<br>than "Re: Contents of consulting digest..."<br><br><br>Today's Topics:<br><br> 1. Proper Collections Procedure (Michael Haggerty)
<br> 2. Re: Proper Collections Procedure (Khalid B)<br> 3. Re: Proper Collections Procedure (Henri Poole)<br> 4. Re: Proper Collections Procedure (Eric Goldhagen)<br> 5. Re: Proper Collections Procedure (Bill Fitzgerald)
<br> 6. Re: Proper Collections Procedure (Evan Leibovitch)<br> 7. Re: Proper Collections Procedure (Trevor Twining)<br><br><br>----------------------------------------------------------------------<br><br>Message: 1<br>
Date: Wed, 16 Aug 2006 10:48:35 -0400<br>From: "Michael Haggerty" <<a href="mailto:mhaggerty@trellon.com">mhaggerty@trellon.com</a>><br>Subject: [consulting] Proper Collections Procedure<br>To: "'A list for Drupal consultants and Drupal service/hosting
<br> providers'" <<a href="mailto:consulting@drupal.org">consulting@drupal.org</a>><br>Message-ID: <<a href="mailto:20060816145031.0BF68138C51@drupal3.drupal.org">20060816145031.0BF68138C51@drupal3.drupal.org
</a>><br>Content-Type: text/plain; charset="us-ascii"<br><br>I have a question for other members of this list about how they handle<br>collections.<br><br>I have a complicated matter with a client and their delinquent invoices.
<br>They are refusing to make payment on fairly large bill after they have<br>received a lot of custom code and already launched the site on their own<br>servers. The justification they cite is cost overruns in the development
<br>process, most of which were for features not included in the original spec<br>but which they themselves requested. The overruns were within 15% of the<br>total project price.<br><br>I have tried dealing with them reasonably for several weeks and received
<br>multiple payment promises that were broken. The bill is now quite a bit<br>overdue and it's taking a huge amount of time dealing with all the craziness<br>around their tab (they keep requesting further clarification about things
<br>that were done months ago and it's eating up my team's time). They are<br>dealing with other Drupal shops at this point and there is no way for me to<br>cut off services. What really burns me is the site was for a third party who
<br>has already paid them and the cost of development was less than 1/8 of what<br>the third party paid.<br><br>Anyone have any ideas?<br><br>M<br><br><br><br><br>------------------------------<br><br>Message: 2<br>Date: Wed, 16 Aug 2006 11:12:28 -0400
<br>From: "Khalid B" <<a href="mailto:kb@2bits.com">kb@2bits.com</a>><br>Subject: Re: [consulting] Proper Collections Procedure<br>To: <a href="mailto:mhaggerty@trellon.com">mhaggerty@trellon.com</a>, "A list for Drupal consultants and Drupal
<br> service/hosting providers" <<a href="mailto:consulting@drupal.org">consulting@drupal.org</a>><br>Message-ID:<br> <<a href="mailto:4a9fdc630608160812x8d7ed39x42033123d810714f@mail.gmail.com">
4a9fdc630608160812x8d7ed39x42033123d810714f@mail.gmail.com</a>><br>Content-Type: text/plain; charset=ISO-8859-1; format=flowed<br><br>First collect all the info you have on their requests that caused<br>the cost overruns, and make sure that it is documented. This will
<br>prove useful for your case with their management and in courts<br>should that be necessary.<br><br>Try contacting others in the hierarchy in the company if your<br>contact is ignoring you. They may end up just handing it over
<br>to your contact anyway, but at least someone else knows about<br>it now.<br><br>Prepare a complete document recounting the history of the<br>project, original estimates, their requests causing the overruns,<br>and your repeated requests for payments. Present it to higher
<br>up management.<br><br>Courts are the last resort, and the documents above will help<br>if you wish to go that route.<br><br>On 8/16/06, Michael Haggerty <<a href="mailto:mhaggerty@trellon.com">mhaggerty@trellon.com
</a>> wrote:<br>> I have a question for other members of this list about how they handle<br>> collections.<br>><br>> I have a complicated matter with a client and their delinquent invoices.<br>> They are refusing to make payment on fairly large bill after they have
<br>> received a lot of custom code and already launched the site on their own<br>> servers. The justification they cite is cost overruns in the development<br>> process, most of which were for features not included in the original spec
<br>> but which they themselves requested. The overruns were within 15% of the<br>> total project price.<br>><br>> I have tried dealing with them reasonably for several weeks and received<br>> multiple payment promises that were broken. The bill is now quite a bit
<br>> overdue and it's taking a huge amount of time dealing with all the craziness<br>> around their tab (they keep requesting further clarification about things<br>> that were done months ago and it's eating up my team's time). They are
<br>> dealing with other Drupal shops at this point and there is no way for me to<br>> cut off services. What really burns me is the site was for a third party who<br>> has already paid them and the cost of development was less than 1/8 of what
<br>> the third party paid.<br>><br>> Anyone have any ideas?<br>><br>> M<br>><br>><br>> _______________________________________________<br>> consulting mailing list<br>> <a href="mailto:consulting@drupal.org">
consulting@drupal.org</a><br>> <a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting</a><br>><br><br><br>------------------------------<br><br>Message: 3<br>
Date: Wed, 16 Aug 2006 08:24:19 -0700<br>From: Henri Poole <<a href="mailto:poole@civicactions.com">poole@civicactions.com</a>><br>Subject: Re: [consulting] Proper Collections Procedure<br>To: <a href="mailto:mhaggerty@trellon.com">
mhaggerty@trellon.com</a>, A list for Drupal consultants and Drupal<br> service/hosting providers <<a href="mailto:consulting@drupal.org">consulting@drupal.org</a>><br>Message-ID: <1155741859.5052.47.camel@localhost
><br>Content-Type: text/plain<br><br>It's quite difficult to recover after the fact. I've found that the<br>negative energy (and impact on the organization and other clients) is<br>almost not worth the trouble.<br><br>
In the future, you might require upfront retainer that covers your<br>intended billings. At CivicActions, we require all of our clients to pay<br>a retainer that covers our estimated billings for the coming month.<br><br>
We also provide weekly reports that indicate where we are in hitting our<br>estimates, so that they are not suprised if we have mis-calculated how<br>much time something will take.<br><br>We also have setup our billing rates so that we have some wiggle room
<br>for discounts after the fact, which is occasionally necessary in order<br>to maintain positive client relationships.<br><br>I'm not sure how much help this is, after the fact, but I certainly<br>empathize with you. It sucks when this happens.
<br><br>-Henri<br><br>On Wed, 2006-08-16 at 10:48 -0400, Michael Haggerty wrote:<br>> I have a question for other members of this list about how they handle<br>> collections.<br>><br>> I have a complicated matter with a client and their delinquent invoices.
<br>> They are refusing to make payment on fairly large bill after they have<br>> received a lot of custom code and already launched the site on their own<br>> servers. The justification they cite is cost overruns in the development
<br>> process, most of which were for features not included in the original spec<br>> but which they themselves requested. The overruns were within 15% of the<br>> total project price.<br>><br>> I have tried dealing with them reasonably for several weeks and received
<br>> multiple payment promises that were broken. The bill is now quite a bit<br>> overdue and it's taking a huge amount of time dealing with all the craziness<br>> around their tab (they keep requesting further clarification about things
<br>> that were done months ago and it's eating up my team's time). They are<br>> dealing with other Drupal shops at this point and there is no way for me to<br>> cut off services. What really burns me is the site was for a third party who
<br>> has already paid them and the cost of development was less than 1/8 of what<br>> the third party paid.<br>><br>> Anyone have any ideas?<br>><br>> M<br>><br>><br>> _______________________________________________
<br>> consulting mailing list<br>> <a href="mailto:consulting@drupal.org">consulting@drupal.org</a><br>> <a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting
</a><br><br><br><br>------------------------------<br><br>Message: 4<br>Date: Wed, 16 Aug 2006 11:30:53 -0400<br>From: Eric Goldhagen <<a href="mailto:eric@openflows.org">eric@openflows.org</a>><br>Subject: Re: [consulting] Proper Collections Procedure
<br>To: <<a href="mailto:consulting@drupal.org">consulting@drupal.org</a>><br>Message-ID: <p06100540c108e8c29559@[<a href="http://192.168.100.6">192.168.100.6</a>]><br>Content-Type: text/plain; charset="us-ascii" ; format="flowed"
<br><br>At 11:12 AM -0400 8/16/06, Khalid B wrote:<br>>First collect all the info you have on their requests that caused<br>>the cost overruns, and make sure that it is documented. This will<br>>prove useful for your case with their management and in courts
<br>>should that be necessary.<br>><br>>Try contacting others in the hierarchy in the company if your<br>>contact is ignoring you. They may end up just handing it over<br>>to your contact anyway, but at least someone else knows about
<br>>it now.<br>><br>>Prepare a complete document recounting the history of the<br>>project, original estimates, their requests causing the overruns,<br>>and your repeated requests for payments. Present it to higher
<br>>up management.<br>><br>>Courts are the last resort, and the documents above will help<br>>if you wish to go that route.<br><br>The most important thing is to do all communication in writing from<br>now on. No phone calls with promises of being paid. Written emails
<br>with payment schedules. Don't allow phone calls that can be later<br>debated -- get everything in writing for accountability and clarity.<br><br>As Khalid points out, you want payment, not a day in court. Even if<br>you win in court you waste a lot of time and money in the process.
<br>More than once I had to also agree to take a percentage of what was<br>owed, just to get it over with and avoid the lawyer fees.<br><br>Going up the hierarchy of the company if there is one is the best<br>place to start.
<br><br>Do you know anyone that can act as an unofficial mediator? I once had<br>a professional contact that also did work for the same client talk<br>them into paying just by bringing it up and embarrassing them.<br><br>
You could simply refuse to hand over the code until they pay. Will it<br>cost them more to hire someone else to re-create it than it would to<br>complete payment? That can be a motivator for them.<br><br>But, many of your options will be defined by the wording of the work
<br>agreement or contract that you are doing development work under. Many<br>agreements have provisions for mediating these issues.<br><br>Best of luck.<br><br>--Eric<br><br>>On 8/16/06, Michael Haggerty <<a href="mailto:mhaggerty@trellon.com">
mhaggerty@trellon.com</a>> wrote:<br>>>I have a question for other members of this list about how they handle<br>>>collections.<br>>><br>>>I have a complicated matter with a client and their delinquent invoices.
<br>>>They are refusing to make payment on fairly large bill after they have<br>>>received a lot of custom code and already launched the site on their own<br>>>servers. The justification they cite is cost overruns in the development
<br>>>process, most of which were for features not included in the original spec<br>>>but which they themselves requested. The overruns were within 15% of the<br>>>total project price.<br>>><br>>>I have tried dealing with them reasonably for several weeks and received
<br>>>multiple payment promises that were broken. The bill is now quite a bit<br>>>overdue and it's taking a huge amount of time dealing with all the craziness<br>>>around their tab (they keep requesting further clarification about things
<br>>>that were done months ago and it's eating up my team's time). They are<br>>>dealing with other Drupal shops at this point and there is no way for me to<br>>>cut off services. What really burns me is the site was for a third party who
<br>>>has already paid them and the cost of development was less than 1/8 of what<br>>>the third party paid.<br>>><br>>>Anyone have any ideas?<br>>><br>>>M<br>>><br>>><br>>>_______________________________________________
<br>>>consulting mailing list<br>>><a href="mailto:consulting@drupal.org">consulting@drupal.org</a><br>>><a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting
</a><br>>><br>>_______________________________________________<br>>consulting mailing list<br>><a href="mailto:consulting@drupal.org">consulting@drupal.org</a><br>><a href="http://lists.drupal.org/mailman/listinfo/consulting">
http://lists.drupal.org/mailman/listinfo/consulting</a><br><br><br>--<br>-------------------------------------------<br>Openflows Networks Ltd.<br>New York | Toronto | Montreal | Vienna<br><a href="http://why.openflows.org">
http://why.openflows.org</a><br>People are intelligent. Machines are tools.<br><br><br>------------------------------<br><br>Message: 5<br>Date: Wed, 16 Aug 2006 08:35:32 -0700<br>From: Bill Fitzgerald <<a href="mailto:bill@funnymonkey.com">
bill@funnymonkey.com</a>><br>Subject: Re: [consulting] Proper Collections Procedure<br>To: A list for Drupal consultants and Drupal service/hosting providers<br> <<a href="mailto:consulting@drupal.org">consulting@drupal.org
</a>><br>Message-ID: <<a href="mailto:44E33B44.7020700@funnymonkey.com">44E33B44.7020700@funnymonkey.com</a>><br>Content-Type: text/plain; charset=ISO-8859-1; format=flowed<br><br>I have to echo what Henri said -- after the code has been delivered, you
<br>don't have a lot of recourse -- basically, work your way up the<br>hierarchy of your client's organization, or take it to the courts.<br><br>And, at the end of the day, this requires time and energy that can be<br>put to more constructive uses.
<br><br>The cost of these interactions often goes far beyond the dollar amounts<br>in question, but that's a decision each company/individual needs to make<br>on their own.<br><br>Good luck with this -- it's a draining and frustrating situation. I hope
<br>it works out, quickly, and as cleanly as possible.<br><br>Henri Poole wrote:<br><br>>It's quite difficult to recover after the fact. I've found that the<br>>negative energy (and impact on the organization and other clients) is
<br>>almost not worth the trouble.<br>><br>>In the future, you might require upfront retainer that covers your<br>>intended billings. At CivicActions, we require all of our clients to pay<br>>a retainer that covers our estimated billings for the coming month.
<br>><br>>We also provide weekly reports that indicate where we are in hitting our<br>>estimates, so that they are not suprised if we have mis-calculated how<br>>much time something will take.<br>><br>>We also have setup our billing rates so that we have some wiggle room
<br>>for discounts after the fact, which is occasionally necessary in order<br>>to maintain positive client relationships.<br>><br>>I'm not sure how much help this is, after the fact, but I certainly<br>>empathize with you. It sucks when this happens.
<br>><br>>-Henri<br>><br>>On Wed, 2006-08-16 at 10:48 -0400, Michael Haggerty wrote:<br>><br>><br>>>I have a question for other members of this list about how they handle<br>>>collections.<br>
>><br>>>I have a complicated matter with a client and their delinquent invoices.<br>>>They are refusing to make payment on fairly large bill after they have<br>>>received a lot of custom code and already launched the site on their own
<br>>>servers. The justification they cite is cost overruns in the development<br>>>process, most of which were for features not included in the original spec<br>>>but which they themselves requested. The overruns were within 15% of the
<br>>>total project price.<br>>><br>>>I have tried dealing with them reasonably for several weeks and received<br>>>multiple payment promises that were broken. The bill is now quite a bit<br>>>overdue and it's taking a huge amount of time dealing with all the craziness
<br>>>around their tab (they keep requesting further clarification about things<br>>>that were done months ago and it's eating up my team's time). They are<br>>>dealing with other Drupal shops at this point and there is no way for me to
<br>>>cut off services. What really burns me is the site was for a third party who<br>>>has already paid them and the cost of development was less than 1/8 of what<br>>>the third party paid.<br>>><br>
>>Anyone have any ideas?<br>>><br>>>M<br>>><br>>><br>>>_______________________________________________<br>>>consulting mailing list<br>>><a href="mailto:consulting@drupal.org">
consulting@drupal.org</a><br>>><a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting</a><br>>><br>>><br>><br>>_______________________________________________
<br>>consulting mailing list<br>><a href="mailto:consulting@drupal.org">consulting@drupal.org</a><br>><a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting
</a><br>><br>><br>><br>><br>><br><br><br>--<br>Bill Fitzgerald<br><a href="http://www.funnymonkey.com">http://www.funnymonkey.com</a><br>Tools for Teachers<br>503.897.7160<br><br><br><br>------------------------------
<br><br>Message: 6<br>Date: Wed, 16 Aug 2006 11:43:16 -0400<br>From: Evan Leibovitch <<a href="mailto:evan@telly.org">evan@telly.org</a>><br>Subject: Re: [consulting] Proper Collections Procedure<br>To: A list for Drupal consultants and Drupal service/hosting providers
<br> <<a href="mailto:consulting@drupal.org">consulting@drupal.org</a>><br>Message-ID: <<a href="mailto:44E33D14.8080707@telly.org">44E33D14.8080707@telly.org</a>><br>Content-Type: text/plain; charset=ISO-8859-1; format=flowed
<br><br>Bill Fitzgerald wrote:<br><br>> I have to echo what Henri said -- after the code has been delivered,<br>> you don't have a lot of recourse -- basically, work your way up the<br>> hierarchy of your client's organization, or take it to the courts.
<br><br>There's one other route, which is certainly not for everyone -- a<br>commercial collection agency.<br>They'll give you a percentage of the outstanding balance (it could be as<br>low as 50%) -- but you'll get it up-front and they'll handle the rest of
<br>the collection. They effectively buy your receivable; at that point you<br>can wash your hands of the situation, in return for your willingness to<br>recover a fraction of the intended payment.<br><br>Depending on many variables, this option -- expensive at it is -- may
<br>still be cheaper than going to court.<br><br>- Evan<br><br>PS: If you choose not to use the collection agency, don't forget to<br>report the bad debt to D&B and other credit bureaus. Maybe even the<br>threat to do this will help straighten the client out.
<br><br><br>------------------------------<br><br>Message: 7<br>Date: Wed, 16 Aug 2006 11:51:36 -0400<br>From: Trevor Twining <<a href="mailto:email.me@trevortwining.info">email.me@trevortwining.info</a>><br>Subject: Re: [consulting] Proper Collections Procedure
<br>To: <a href="mailto:mhaggerty@trellon.com">mhaggerty@trellon.com</a>, A list for Drupal consultants and Drupal<br> service/hosting providers <<a href="mailto:consulting@drupal.org">consulting@drupal.org
</a>><br>Message-ID: <<a href="mailto:44E33F08.4010905@trevortwining.info">44E33F08.4010905@trevortwining.info</a>><br>Content-Type: text/plain; charset=ISO-8859-1; format=flowed<br><br>Hello everyone, first time poster, lurking for a while.
<br><br>I've had to do this a few times too, and I've found a few things that<br>have helped.<br><br>One way to get the money out of them and maintain good relations is to<br>propose you take the outstanding amount (possibly negotiating it down),
<br>and because it's in dispute the two organizations donate it to a charity<br>of their choosing. The company actually pays the money out, and the two<br>of you get the joint publicity of presenting a cheque to an org, plus
<br>you've turned something negative into something positive.<br><br>For all my clients I charge deployment separately from development. I<br>don't release any code until the development project is completely<br>signed off and paid for. Then I charge a nominal fee for deployment on
<br>outside servers. That way I maintain control over the product until I am<br>compensated, and if they stiff me on deployment, I'm not out for the<br>entire project.<br><br>Hope this helps.<br><br>Michael Haggerty wrote:
<br>> I have a question for other members of this list about how they handle<br>> collections.<br>><br>> I have a complicated matter with a client and their delinquent invoices.<br>> They are refusing to make payment on fairly large bill after they have
<br>> received a lot of custom code and already launched the site on their own<br>> servers. The justification they cite is cost overruns in the development<br>> process, most of which were for features not included in the original spec
<br>> but which they themselves requested. The overruns were within 15% of the<br>> total project price.<br>><br>> I have tried dealing with them reasonably for several weeks and received<br>> multiple payment promises that were broken. The bill is now quite a bit
<br>> overdue and it's taking a huge amount of time dealing with all the craziness<br>> around their tab (they keep requesting further clarification about things<br>> that were done months ago and it's eating up my team's time). They are
<br>> dealing with other Drupal shops at this point and there is no way for me to<br>> cut off services. What really burns me is the site was for a third party who<br>> has already paid them and the cost of development was less than 1/8 of what
<br>> the third party paid.<br>><br>> Anyone have any ideas?<br>><br>> M<br>><br>><br>> _______________________________________________<br>> consulting mailing list<br>> <a href="mailto:consulting@drupal.org">
consulting@drupal.org</a><br>> <a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting</a><br>><br>><br><br><br>--<br>==================================<br>
Trevor Twining<br>Internet Programmer<br><a href="http://www.trevortwining.info">http://www.trevortwining.info</a><br><a href="mailto:email.me@trevortwining.info">email.me@trevortwining.info</a><br><br><br><br>------------------------------
<br><br>_______________________________________________<br>consulting mailing list<br><a href="mailto:consulting@drupal.org">consulting@drupal.org</a><br><a href="http://lists.drupal.org/mailman/listinfo/consulting">http://lists.drupal.org/mailman/listinfo/consulting
</a><br><br><br>End of consulting Digest, Vol 9, Issue 15<br>*****************************************<br></blockquote></div><br>