[consulting] being a listed consultant

Fri Apr 6 16:26:20 UTC 2007

On Fri, 2007-06-04 at 07:47 +0200, Gerhard Killesreiter wrote:
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> Dominic Ryan schrieb:
> > There are some really bad Paypal stories here, I had no idea it was that 
> > bad. I always thought transaction could only be contested if the payment 
> > was made with a delivery address? Have any of you used moneybookers.com 
> > ? I've used that a couple of times to pay for development work, and 
> > seems pretty good.
> 
> I've stopped using any of these services and insist on using wire
> transfer. Mainly because paypal charges an arm and a leg.

For us the Paypal charges were not that much of an issue but when
someone files a claim after they pay - you don't have control and you
pretty much lose the money. Paypal is very bad to sellers. Some
customers just use it for their advantage and try and push you to give a
lot lot more than work order scope. If you don't and if they file
dispute, you are out of luck.

We have long back stopped taking Paypal payments. We ask clients to
either Wire funds or mail us a Cheque.

> 
> > As for payment, as someone who has paid for 
> > development work several times I always think it is perfectly reasonable 
> > to ask for a percentage up front.
> 
> This will you protect you from new clients not paying, but how about
> existing ones? It has happened twice to me now that after a while of
> good cooperation and regular payments these payments stopped and I was
> left with unpaid bills. While in one case I am confident that I'll
> eventually get the money, I am less confident in another case.

We also had to write off about $3000 in a similar situation. But as a
Service provider, you want to build relationships so you have to be
prepared that such things will happen. Every such experience will help
you tighten your work order, assumptions and the way you manage the
financials.

We work with lot of clients on Drupal projects and 95% of clients are
very understanding and we love to work with these but 5% are very tough
and there is no way you can know this unless you engage with them.

Here are few examples  that may throw some light.

Case 1
-------

In this first  case, we did give a quote and start the project with
assumptions that Project Communication will be 'x' hours, Training and
Documentation will be billed separately, Deployment is assumed to take 2
hours, Any changes in core/contributed module would be billed
separately.

What clients don't understand that from the specs to final end product,
there would be some or in few cases a lot of deviations and adjustments
and effort/price will also have to be adjusted. There was  lot of
progressive elaboration in this project and we EXACTLY delivered to a
large extent for in-scope work. We never came across such a client. Over
2 months of a project, the client on average sent 2 to 3 mails a day -
either asking 'How to do this' - 'How to do that' and some of it was
basic Drupal knowledge. Can you just add this or that. The project had a
tight deadline too.. so we did't want to put speed breakers  on every
such request and get approval for 2 hours, 1 hour extra time. Also they
got a dedicated server and we had to configure it for them.  This was
absolutely not a pleasant experience with client. In this case, this
project was subcontracted to us by another US firm because of our drupal
expertise.

We did get compensated for 10% of the extra time but 90% we just had to
write off.  

The project is a great success and is sure to go very high up as a solid
Drupal reference site. This was Phase 1.  

Client is also very happy with our work and there is potential of Phase
2.   

As a company here is what we are planning to do = we won't do Phase 2
unless our Phase 1 deficit have been recovered or we are given strong
publicity on the project.

Case 2
-------

Another Client - A very very large and reputed enterprise. We are never
having any issues on effort, etc but their payment cycle we agreed was
45 days and every time they have missed the 45 day period and we have to
send reminders and then they will mail out the cheques.  Sometimes its
over 100 calendar days after you deliver the service that you see the
cheque.

I always thought that a company of this size will make automatic
payments on time.

Case 3
-------

Another interesting  client - Got the Custom Module, tested it on
staging, we deployed it and invoiced the client.  Client said they still
haven't got time to test the module on Live site and haven't been using
it. It was after 2 months, they used it and payment came through 30 days
later.

In all these cases, we as a service provider had atypical experience.
Clients can't get away not paying employees on time but they sort of
always delay, defer or want invoices adjusted. 

In all these three cases, we have excellent relationship with the
clients and there is good repeat business. In 2  cases - we have been
given a pass through to work with direct end client so we can get higher
rate. I think its all about education. If you can work through these
issues, it will be a win-win situation. You don't want to spoil the
relationship after doing lot of hard work. We do get lot of repeat
business from our clients.

Consulting is always a challenge.  We have to mitigate the risks as much
as we can by tight contracts, solid assumptions and firm commitment on
payments. 

When we started the company, we never took down payment. Payment was
upon delivery. Looking at the cases of delayed payments and learning
from that experience we have started taking 50% down.

Also we encourage the clients to sign an Annual Maintenance / Product
Support contract with us. Typically clients do sign up for 10 hours/
month of support where they need help in Training/Consulting or minor
fixes. We make it clear in such contracts that any enhancements / new
development would be separate work order.  Our On-Demand Support rates
are also at least 30% or more higher than the development rates.

> 
> Seeing that both ex-clients are on the other side of the Atlantic, I
> don't really see the option of legal action.
> 
> The problem which makes it even worse is that in that second case I got
> a personal friend of mine to complete parts of the project and he didn't
> get paid either.

Its a very bad situation when you have a friend and him not getting
paid. I live in beautiful Vancouver and have been encouraging as web
developers and designers I come across to seriously look at Drupal.
When I come across something that is of small size which we don't want
to take on, I pass it to them but I definitely tell them to do their own
due diligence. That way, I stay out of the picture.

We do pick clients very carefully and once we start the project, we just
go as far as we can to make the project a success. At this stage, we
put 'Drupal first' as our goal and then always work to make project a
success. A happy customer and a successful Drupal implementation will
bring more clients to Drupal. This is good for Drupal, Service Providers
and for Clients too.

Roshan Shah
CEO - BPO Canada
http://www.bpocanada.com
1-604-630-4292
P.S : I do reiterate - if you take Paypal payments, you are at high
risk. Wire Transfer or Physical cheque is safer.

> 
> Any ideas?
> 
> Cheers,
> 	Gerhard
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