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Developer open-sources 200+ hr project after client refuses to pay

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Re: Developer open-sources 200+ hr project after client refuses to pay

#121

Post by jcrites »

badclient wrote: post #113
tjmc wrote: post #109

Earlier quoted context omitted.

Have you considered using a debt collection agency? On the first consulting gig I ever did, I was owed $10K by a client who refused to pay. After months of patience, including offers to let them pay off the debt over time I went to a collection agency and got the lot back in a court settlement less $1k in fees for the agency (which at least was tax deductable). I should mention that this was in Australia and I had a…

This guy is far beyond the reach of debt collection agency. He has multiple active civil cases re: money owed. His own former lawyers have been owed money to and have obtained default judgement against him and yet have not been able to collect money as of my last conversation.

Was this all stuff that had happened before he contracted with you?

Perhaps the real lesson learned is: check out your clients before working with them.

Re: Developer open-sources 200+ hr project after client refuses to pay

#123

Post by mcobrien »

tptacek wrote: post #119
lsc wrote: post #110

Earlier quoted context omitted.

oh man, this. So I've been doing contracting forever; usually direct to smaller companies or through a middleman who was also pretty small. And most of the time, smaller companies are pretty good about paying on time, and pretty responsive if you say "Hey, this is really important to me, I've gotta pay the power bill." (my power bill, well, let's just say it could buy my car every month.) At my first contracting gig…

They might not even be trying to "stretch" it (a large company could give a crap about the float on an indie consulting invoice); they might just run accounts payable on a state machine in which the part that elapses a timer hasn't started yet. There might be all manner of reasonable reasons for doing it that way; for instance, if they accidentally release payment early, they may screw up projects by blowing expectat…

I once worked in a bank doing tech support and occasionally fixed a few things in the sealed-off internal finance room. The place was littered with red final notices - including utility, phones, everything. As a bank they could easily put to use any extra cash they had, so the official policy was to pay everything late. No doubt everyone knew they would pay eventually, but when you're big you don't have to.

Re: Developer open-sources 200+ hr project after client refuses to pay

#124

Post by CaptainZapp »

tptacek wrote: post #119
lsc wrote: post #110

Earlier quoted context omitted.

oh man, this. So I've been doing contracting forever; usually direct to smaller companies or through a middleman who was also pretty small. And most of the time, smaller companies are pretty good about paying on time, and pretty responsive if you say "Hey, this is really important to me, I've gotta pay the power bill." (my power bill, well, let's just say it could buy my car every month.) At my first contracting gig…

They might not even be trying to "stretch" it (a large company could give a crap about the float on an indie consulting invoice); they might just run accounts payable on a state machine in which the part that elapses a timer hasn't started yet. There might be all manner of reasonable reasons for doing it that way; for instance, if they accidentally release payment early, they may screw up projects by blowing expectat…

When I freelanced one of my customers moved the accounting to SAP, which had the unfortunate consequence that they didn't pay me for four month.

It was, however, a reputable, well known firm and I had no reason to believe that they where playing games or trying to bullshit me.

I was right and got payed in full when the glitches got ironed out. Nevertheless, it was a tad annoying and part of the perils of a freelancer, I guess. Thankfully, while being persistent with their accounting department I never blew up and always stayed civil.

Very much second that setting up the invoicing for a new supplier can take time, especially at multinationals or other large firms. I can understand this due to the fact, that procurement is one of the most sensitive areas when it comes to fraud and dodgy invoicing. Thus firms set up a lot of safeguards before actual money flows.

Re: Developer open-sources 200+ hr project after client refuses to pay

#125

Post by peteretep »

tptacek wrote: post #82
idlewords wrote: post #80

Earlier quoted context omitted.

An additional wrinkle is that oftentimes it can take a while to set up the mechanics of payment with a first-time client. So even if there is goodwill on both sides and a willingness to pay an initial deposit, you might not see the money until you've done quite a lot of work. Since a lot of contract work is time-sensitive, waiting for payment to clear before starting work or handing over an initial milestone might no…

This is a great thing to keep in mind before any of you think of writing an outraged blog post when a client doesn't honor Net+30 on your first invoice cycle. Clients usually don't.

In the UK at least, you may be able to start charging statutory interest after the the second +30. Whether or not you think that's a good idea is up to you...

Re: Developer open-sources 200+ hr project after client refuses to pay

#127

Post by ajhai »

I worked on a project around a year back (something like fetch.io, but a stripped version) and had a deal with the employer that we'll be sharing the profits that are made from the service. He invested on the servers and the premium accounts with various file hosting services. I took care of the entire application. But he scrapped that project even before the beta is launched saying that the operation costs are more and he see no point in launching the service and also partly because of the legal issues involved in downloading and distributing content from other services. After reading this post, I feel like I should open source the code that I'm not using now.

Re: Developer open-sources 200+ hr project after client refuses to pay

#128

Post by ra »

kposehn wrote: post #40
thebigredjay wrote: post #15

Earlier quoted context omitted.

Where is a good place to learn the ins and outs of contracts? Is there a comprehensive website or book that you can recommend? I am early in my career and have been on both sides of writing contracts. While I am figuring a lot of things out as I go it would be nice to sit down and wrap my head around this for good. Also, to the OP, is a few weeks really enough time? If those were 200 billable hours it seems like it's…

I've run my own marketing firm for the last few years and have dealt with similar issues as the OP. How you structure up front payment is always up to you. We've always had a setup fee, typically a few thousand dollars, which is due before any work starts. However, there has been one single thing which has kept our revenue flowing month after month for years: Freshbooks.com I seriously love that site. We use it for:…

Nice. I've started using freshbooks recently but haven't looked at the estimate side yet.

Side question, what (in percentage terms) do you call a 'nasty fee'?

Re: Developer open-sources 200+ hr project after client refuses to pay

#129

Post by lesterbuck »

CaptainZapp wrote: post #124
tptacek wrote: post #119

Earlier quoted context omitted.

They might not even be trying to "stretch" it (a large company could give a crap about the float on an indie consulting invoice); they might just run accounts payable on a state machine in which the part that elapses a timer hasn't started yet. There might be all manner of reasonable reasons for doing it that way; for instance, if they accidentally release payment early, they may screw up projects by blowing expectat…

When I freelanced one of my customers moved the accounting to SAP, which had the unfortunate consequence that they didn't pay me for four month. It was, however, a reputable, well known firm and I had no reason to believe that they where playing games or trying to bullshit me. I was right and got payed in full when the glitches got ironed out. Nevertheless, it was a tad annoying and part of the perils of a freelancer…

Do you think their accounts payable operation froze for four months, too? Didn't think so. Somehow even that big, complicated SAP migration can keep critical business operations going.
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