Ask Slashdot: How To Collect Payments From a Multinational Company? 341
An anonymous reader writes "I run a small dev shop focused on web development, based in Europe. For the past six years we've had lots of successful projects with clients from CEE, Western Europe and the U.S. One of our main clients was based in the U.S. We started working for them in 2008, while they were a 'promising start-up' and everything went smoothly until they were bought by a multinational corp. We couldn't be happier to work for such a big player in the market, andwe even managed to get by with huge payment delays (3-4 months on a monthly contract), but now, after more than two years working for them, I have the feeling we're getting left out. We have six-month-old unpaid invoices and we're getting bounced between the E.U. and U.S. departments every time we try to talk to them. What can a small company do to fight a big corporation that's NASDAQ listed and has an army of lawyers? They've been getting a lot of bad press lately so I don't think that will scare them either."
Name and Shame (Score:5, Insightful)
Name and shame.
And point out that they're costing jobs by not paying invoices.
Re:Name and Shame (Score:5, Insightful)
Name and Shame violates US consumer protection laws, so it's a bad approach if you plan legal action in the US, or fear the same.
It's multinational? A better idea might be to sue a local branch of the company in your local court.
Re:Name and Shame (Score:5, Insightful)
Indeed. This is the best answer. Sue in U.S. courts. Someone will pick up the story and the naming and shaming will be a part of the system. They will settle. If you get caught up in trying to do this 'on the cheap' (meaning outside of the courts) you may well find yourself in court as a defendant.
Out the multinational using the courts and make your case plainly and honestly.
Re:Name and Shame (Score:5, Insightful)
You don't even have to sue. We had a 6+ month invoice, we just had our lawyer write up a "final notice" letter letting them know that our lawyer was prepared to sue and we were paid that week.
Re:Name and Shame (Score:5, Insightful)
Now for the real best answer. You have to do some of the stuff "Anonymous" was known to do, with out the rest of the stuff "Anonymous" has been known to do ie. ring around making it sound like you are in the know, to get the right contact information, in accounts payable.
Problem is you are at a massive distance to the people who decide who gets paid when. In large organisation getting to know the right people, chatting with them, sending Christmas and Birthday cards and presents. Might seem tright and old fashioned but, when you bills are at the smaller end of the scale, the people that sign off on the checks will remember you and you'll be surprised at how far up the payment schedule you can end up, do it right and less than thirty days is the norm. Make a pig out of yourself with lawyers and watch your contracts dry up.
Re:Name and Shame (Score:5, Insightful)
You know this just reinforces the status quo, right? I deserve to be paid on time and in full for the work I do, as stipulated by the contract signed by the client at the beginning of the work. If they think they deserve some special treatment or privilege, then they should stipulate that before the contracts are signed and damn well stick to them. I shouldn't have to send a case of whisky to some bean counter's house just to get a cheque signed.
Re:Name and Shame (Score:5, Insightful)
Why is name and shame against US law?
If it's true it can't well be libel or slander.
Seriously, I wanna know what stupid law on the books says we can't talk bad about bad companies.
Citation please?
Re:Name and Shame (Score:4, Insightful)
Why is name and shame against US law?
If it's true it can't well be libel or slander.
Seriously, I wanna know what stupid law on the books says we can't talk bad about bad companies.
Citation please?
The fact that it is true is a defence against a slander or libel suit. Whit the right attorneys, it is a very expensive defence against it.
Re: (Score:3)
"If it's true it can't well be libel or slander."
I am rather curious about this too. As a contractor, I have been a victim of corporate dishonesty a couple of times, and both times I could prove it, because I keep records and they tend not to. The first time, they are very lucky I did not set the Feds on them for violating Federal law. I had plenty of proof in black and white. But all I wanted was my money, and eventually I got it. Almost all of it, anyway.
The second time, the firm was in another country, and I was not sure how to proceed. I have consi
Re: (Score:3)
What about reporing the debt/very late payment to one or more of the credit reference agencies?
Re: (Score:3, Informative)
Re:Name and Shame (Score:5, Insightful)
Please do not do this! First off contracts can be more complicated than they seem and if you make a wrong statement it can leave your company open to libel/slander charge. Second, it will mean that company will never work with you again. It will also look bad, even if your in the right, with new clients down the road.
Go hire a lawyer for a few hours and get them to write a notice of payment. Likely you are getting transferred between low-level temps in the accounts payable department who don't know what they're doing. A good lawyer can usually get the attention of someone important. Even if you have to take them to court it won't necessarily ruin your business relationship with the company (this stuff happens all the time) - but calling them out in public will.
Re:Name and Shame (Score:5, Insightful)
And make sure to charge interest on all past due invoices, at the highest legally possible rate.
Re:Name and Shame (Score:5, Interesting)
Plus collection fees. If they don't pay within 3 more months, find out if you can put a lien on U.S. properties. After your final notice for payment, inform them that you have no alternative but fall back on legal remedies to collect your debt. Include the cost of legal representation required to collect on the debt. This may seem like small potatoes to the multinational, but I'm sure you can jack up the potato count substantially. More important you want to get in and out fast, these are flakes.
Re:Name and Shame (Score:5, Interesting)
Yep - put it all together. If you are in the UK, and they have a UK subsidiary, then you can apply to the High Court for a winding up order - you have to serve an order for payment (a "statutory demand") and have some proof that the payment is valid, and if they don't pay within 21 days, you close them down. Brilliant!
I had a friend who, back in the 90's, served such an order on Hewlett Packard's UK arm. Wow baby did it get their attention!! Because if they don't get it sorted, then they are declared insolvent by the High Court and then their accounts are frozen and administrators are called in. They can dispute it and restrain the petition - or they can pay up rather quickly, which in this case they did.
He figured he'd never get any more work from them - but at that point he didn't care because he wasn't getting paid.
Re: (Score:3)
Lien threats generally get things paid quickly. Unfortunately, there are several limits on what and when you are allowed to file a lien. You burn bridges... But you get your money.
My suggestion is to warn of a lien if payment in full is not received within 30 days. You have to follow through though.
Comment removed (Score:5, Interesting)
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Yup, I've seen many small businesses/contractors get starry-eyed like girls at a Justin Bieber concert* when Very-Big-Corp wants to work with them, and almost without fail they get steamrolled and screwed over in some way. 'Been there done that' myself, too, but I saw through the bullshit just in time to not sign on the dotted line. You think you need their business to enter the 'big time' and you imagine you're making 'sacrifices' in order to get to some 'next level' but reality is you're gonna get used up
Comment removed (Score:5, Informative)
Re:Name and Shame (Score:5, Insightful)
Name and shame.
No, don't. Fortune 500 companies tend to be run by grown-ups, not Slashdot posters.
It's most likely a case of talking to the right person at the other company. Call them and ask who's in charge of your invoices, find out what's going on. Don't accept "we'll call you..." or "he's away this week...", ask to talk to the person's boss, go all the way up to the CEO if necessary.
Get a real suit to make the calls. Somebody who speaks the right language in the right tone of voice. Pay a lawyer with an extra-expensive suit to do it if necessary (scratch that, get a lawyer with an extra-expensive suit to do it, period. Show him your contract first).
Chances are, you'll get paid. A contract is a contract and big companies have shareholder reports where lawsuits for breach of them aren't popular items.
Step 2: If you don't have a contractual obligation then stop working for them. If they're not paying you and not telling you why then the romance is gone, somebody in their hierarchy doesn't like you for some reason. Stop working, call their main competitor and tell them what you were doing, they're probably interested.
This (Score:5, Insightful)
Agreed with most of what Joce640k writes.
The most likely explanation is not malice, but that the right person hasn't done their goods receipt so A/P can release the funds. Or they made a screw-up, closed a project or a funding source by mistake, and now need to go through three levels of horror and approvals to get the funding back.
Go and see a lawyer. The charge for the few hours of work will sting but it's surely going to be much less than you're owed. Take careful note of Step 2. Well, ask the lawyer about step 2 and take careful note of what they say. If you can do so, cease your work (hopefully you've got short term work you can get your employees to do in the meantime) and let the client know politely why you're doing so. (Get the lawyer to do it; they're much better at that kind of thing, and they're not going to get emotional. As Joce640k says, businesses are run by grown-ups.) It may feel satisfying to write a screed of anger, but it doesn't get results in the business world. Go out for a drink with a friend and rant to them, if you'll feel better. But be professional in your business dealings.
If lawyer says you can go ahead and stop working on this contract until things get resolved, then l
I wouldn't advise approaching the competitor, at least until you've heard the lawyer's opinion (yes, that too could be a breach of contract on your part).
Don't try the "name and shame" game. As others point out:
* Beware of libel lawsuits. ... that will agree to publish (newspapers are afraid of libel too, and it's probably not that interesting as a story, and classifieds in a big paper/commercial site are more expensive than the lawyer option)? ...that's big enough that the company will notice?
* Where will you go for the "naming" part?
*
*
* And even if they notice, they most likely won't care.
Re:Name and Shame (Score:5, Informative)
I wish I dealt with the people you have. Just a few months ago, I was having an issue with some large name super phone company, and after the first transfer and getting nowhere, I asked for another transfer to their supervisor. They told me there isn't one. No amount of negotiating was getting me past this person. I called back. I escalated up to the same person with the same results.
My point being, the phone is the worst place to asset you mean business. Do it on notarized paper, by certified mail.
Re:Name and Shame (Score:4, Insightful)
Absolutely agree about writing.
I've answered telephones in an office. If I don't want to transfer you, you don't get transferred; doubly so if the person you want to be transferred to has specifically told me not to transfer you to them. I was by no means a tyrannical martinet on the phone - there are people who are much more effective gatekeepers than I - any company trying to delaying paying its bills will have employed such people to ward off telephone calls.
You don't *ask* to speak to the CEO (Score:5, Informative)
You call the switchboard (it can take some digging) and request the office of the CEO, or (better) send an email to the entire executive suite. Frequently email addresses are publicly available or are some variant of first.last@example.com.
I've utilized both techniques at various times.
While travelling in Australia with an (I was told at the sales location) International-capable SIM-swappable phone, that I found out was in fact locked, I emailed the CEO of Cingular, copying a good friend of mine who covers the mobile sector for a tech publication, requesting the phone be unlocked (this after several rounds of frustration on long-distance international tech support). My host was awakened at 5am by a call from the US the next morning.
On discovering significant 419 spam transiting through Microsoft's Hotmail servers, I called the Microsoft switchboard, requested the SVP of the appropriate department, was transferred to him directly, he picked up within two rings, we spoke briefly, he promised that the person responsible would call me within the hour, fifteen minutes later I was talking with the person in charge of Hotmail abuse mitigation, and we worked to resolve the problem over the next several months. I'm no fan of Microsoft, but their response here impressed me immensely.
Another spam issue turned out to be a service run by a contractor at a southeastern university. After getting the brush off from the guy at his personal account (and tracking down his consulting gig), I sent a round of emails escalating one level up the university org chart, eventually hitting the president's office. By the third or fourth round I'd gotten the resolution I'd hoped for in the first place.
Issues with delivery through Yahoo (and months of zero useful responsiveness from their help desk and CTO and the self-reporting web tools) led me to finally email the entire executive suite (as far as I could identify -- this was a few CEOs ago) with an email subject line "Gentlemen, you have a problem", containing a brief synopsis and pflogsum extracts comparing delivery rates and times through Yahoo and other major email service providers. Got a response from the "concierge" desk and resolution within a couple of days.
In another case, an airline's exceptionally poor service led me to write an essay and post it to my website (as I'd promised the CSR I'd do when I requested hotel accomodations to compensate for fouling up both legs of my journey and stranding me at an airport overnight). I didn't get the resolution I'd wanted, but my piece generated a number of emails to me from both other frustrated passengers, and a number of airline employees and investors as the company struggled to stay solvent. It ultimately lost that battle, and I cried very, very little.
Look up "the art of turboing". Realize that politics and sociology of most businesses makes such embarrassments a very high priority to resolve, especially if they're chump change to the organization in question. http://macwhiz.com/blog/art-of-turboing/ [macwhiz.com]
Re:Name and Shame (Score:5, Informative)
No, stay professional. If they're not actively contesting the invoices, just neglecting to pay them, get a debt collection agency (no-cure no-ay if necessary) and send them after them. They may get your money for you, and if not, they may sue them for you.
In any case, don't get advice from random people online, get advice from lawyers and debt collectors who know about this sort of thing. Who know the relevant laws in your and their country, who know relevant treaties, etc.
But surely if you're a dev shop that has existed for more than a year, you already knew this.
Re:Name and Shame (Score:5, Insightful)
In any case, don't get advice from random people online, get advice from lawyers and debt collectors who know about this sort of thing.
Well, yeah. To be blunt, the only advice that should be taken on Slashdot for a question like this is from either people in a similar position who have actual experience of this having having happened to them and/or those few posters with an actual solid legal background. And the former's advice should be "this is how it went for me, blah blah, but you should get proper legal advice".
Too many Slashdotters will come up with "cute-on-paper" sounding ideas (e.g. the name-and-shame idea above) not based on practical experience without understanding the implications in the real world. I've said this many times before, but the problem with many Slashdotters is that they like to think they know how the legal system(s) work when they don't.
This is because they think the law can be deduced and works in a relatively logical manner, i.e. they (a) think they can deduce how a particular law might work logically because (b) they think that the way the law *should* work is the way that the law *does* work; i.e. that it's both fair and logical. But it's not always that way, and the only way to actually know how the law works is to have learned how the law works properly.
I've been attacked on more than one occasion for pointing this out, as if my drawing attention to the fact that this is how the (flawed) system works- like it or not- implies that I approve of it, i.e. shooting the messenger. But, yeah; any answers to this question should be taken as pointers from people who've encountered similar situations and what direction to be heading in, and certainly not taken as final legal advice or anything near it.
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Fairness is a rare thing. I had a problem recently with a company that didn't want to pay me. Well, they did, just not as much as they technically owed me. Fortunately I have a legal insurance that gives me (among other things) free legal advice from a legal expert. Best decision I ever made (well, apart from marrying my wife). He told me that when they contest the invoice, a debt collector agency won't work for me. I need to either get a settlement with them, or sue them, and then the judge will still expe
The typical answer (Score:5, Insightful)
Send them an invoice with the maximum late payment penalty that the law AT BOTH SIDES allows, with a giant red statement that they're half a year late, and send it it to the person responsible, with a clear explanation of how much each increased payment delay costs.
If they delay you even one month beyond that, send a new invoice with the expected increase, and cc: it with a copy of all the others you've sent to the person responsible, their manager, accounts receivable, and the office of the president.
Re:The typical answer (Score:5, Insightful)
Yes this is the typical answer...
But something needs to be said: the law in the U.S. is AMAZINGLY forgiving for multinational companies not fullfilling contracts to individuals. We live in a society that is completely hypocritical when it comes to contracts. The masses seem fine when a company violates contracts to individuals but not vice versa.
I wish I could be positive, but with the laws and the courts so scewed towards the rights of corporations, what realistic chance does the submitter have to get his rightfully earned money?
Re: (Score:2, Insightful)
I would recommend going about it this way.
This late payment is being caused by two things:
1. They don't know who the proper person to authorize payment is after the merger.
2. You don't rate high on the priority list as your invoice is below a certain threshold to constitue an emergency. In other words the penalty that you have built in is seen as a standard cost of doing business.
Most of the time large corporations are not evil just dumb due to corporate enforced amnesia generated by legal/risk calculus
Re:The typical answer (Score:5, Insightful)
Ehhhhh, you can't generalize. I've done business with any number of Fortune 500's. Some are quite good, and they might get screwed up as you say, but they'll fix it if you can get to the right person. Others are actually actively evil and have a policy of just "fuck everyone". They will simply steal from you and flat out have no intention of ever paying.
1) Always have a signed written contract and PO whenever you deal with a large corp
2) Get paid up front before work is performed.
3) If you can't get these things then don't do business with them. Find some other sucker to do it and act as a sub.
4) Never do business with any bank of any sort whatsoever without cash up front. Don't even start until the check clears. All banks are scum, and the US banks are the worst (but not by much, UK banks are hot on their heels).
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4a) Treat all consultancies like US banks.
Re:The typical answer (Score:5, Interesting)
Big companies rarely pay in advance (Score:3)
1) Always have a signed written contract and PO whenever you deal with a large corp
2) Get paid up front before work is performed.
3) If you can't get these things then don't do business with them. Find some other sucker to do it and act as a sub.
Not possible in most cases to get paid before work is performed. Maybe for certain services but that would be the exception. In manufacturing you'll be lucky to get better than Net 60 day terms with a large corp. Don't like it? Too bad. Doesn't matter much what it says on the invoice you send them either. They'll pay you when they want to and they sure as hell aren't paying you up front.
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no if they are one more month late send in your lawyer.
usually the threat of legal action is enough for some one to start double checking the peons work.
The fact is most big companies are hypocrites.
At my work We have exclusivity contracts for the region/ vendor. management is all for these contracts right up until they start getting screwed because of them and we get cut out of certian markets and then they are all against those contracts and deride them.
What's funny is they don't even realize just what
Re:The typical answer (Score:5, Interesting)
Add in a ~10% overhead and markup to all invoices.. then offer 3% net 30 payment terms. Most big companies have an accounting policy that says they must take the 3% discount (because it is the equivalent of borrowing money at >36% interest, something accountants hate.) The late fee is a little trickier, but write on the invoice that late fees of 6% per month are added after 60 days. If they complain about a late fee when you submit the invoice, kindly remind them that it only applies if the payment is later than 60 days, a more than fair period of time.
Lastly, follow up a day or two after you email the invoice. "Hi, just wanted to make sure you got my invoice and check on the status of it.." Make sure you have a name and phone number of the A/P person who will be paying it. Call every day regarding late invoices...
Good Luck!
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Discounts are not usury. Your not increasing debt, you are offering to discount it if paid early. You start with the big number.
It's not really applicable to OPs problem. High charge has to be negotiated up front. Discounts can be offered unilaterally.
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Now, 6% per month late fee, I guess that would depend on whether the jurisdiction's usury law covered an involuntary loan (you've forced your vendor to extend you credit without an agreement to do so).
Aren't there credit reporting agencies for corporations? Isn't there a way this guy could damage the cre
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Definitely be nice and polite to the A/P department you're talking to. Ask them
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If it's anything like the nonsense I've seen they'll make sure there's no-one so simple as 'the person responsible'. They'll make sure the invoice has to be approved by one and sent to another, then the payment has to be approved by a third. More if they can find a reason. And they'll all pretend they don't/can't communicate, or flat out lie. The first will demand a copy of the PO, and then be on holiday or not available, then if they finally approve it the second person will deny receiving the approval. Th
Find other clients (Score:5, Informative)
If you're essential they'll find a way to pay you.
Re:Find other clients (Score:5, Insightful)
Im not a huge supporter of unions, but Im not seeing why I would hate that idea. I think most people would agree that if a customer treats you like crap, dropping them is a really good way to solve the problem.
Maybe next time they send a work request to you just respond "would love to do the work, but my superiors say I cannot begin work until we get at least a partial payment for the past invoices". Thats how we handled it at my past job and it always worked pretty well, both at cutting off people who truly werent going to pay and at getting money from folks who were just a bit behind the curve.
Re:Find other clients (Score:4, Interesting)
Make that: "I cannot begin work until all past invoices are paid in full". You can't stop a problem from continuing if you endorse the behavior on any level. Also, unless it is true, don't claim it is due to a "superior's" edict. If you want them to be honest and straight-forward with you, you need to do the same. otherwise you're a hypocrite.
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You can't stop a problem from continuing if you endorse the behavior on any level.
Its not about endorsing it, its about getting your money. Saying "i wont accept a penny less than full payment" may just end you up without a single penny.
Re:Find other clients (Score:4, Interesting)
That would be my first instinct too. Why would you continue to work for them for 6 months without being paid? That's bonkers.
I had a client that would always pay late, so I told them that if the payment was one day overdue, I would not come in to their offices and do the work they had contracted me to do. They didn't like it at all, but it ensured I got paid. They were so slack at paying that I changed the terms of my invoices from "20th of the following month" to "pay on invoice". Their CFO sees it as standard practice to withhold payment for as long as possible. I saw it as standard practice to withhold my services if I wasn't paid. They were the ones who needed me to work for them - I had other clients who paid as well and on time.
P.S. I don't see what refusing to work unless you are paid has anything to do with being pro or anti unionist.
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These so-called "anti-union" types are for personal freedom, so why are you suggesting that they would be against the choice to not work for someone?
get an attorney (Score:5, Insightful)
have an attorney in the usa draft them a letter asking for a simple explanation along with a detailed sequence of events.
this will mean they will ask their own attorney to give a response.
their own attorney will tell them they better avoid legal issues over a startup purchase. how would google look if it didnt pay off youtube debt holders when buying the site?
Find an effective collection agent. (Score:2)
File a lien against them (Score:5, Insightful)
File a lien against them, and make sure you inform Dun and Bradstreet of the lien.
Um, Litigate? (Score:4, Insightful)
Hope you have friends inside (Score:5, Insightful)
I've been in IT at a major corp and had a supplier that I worked with personally come to me due to non-payment. I had to go pretty far up my chain of command before I found someone who would apply pressure to finance to pay up on the contract that they signed and approved. Had I not been there to facilitate it would have taken even longer, if they got paid at all. The supplier was international so they got a runaround. Wish I had a better answer, but finance depts sometimes like to collect interest on their bank accounts even at the expense of the company's reputation.
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+1 this. Fighting a bureaucracy that drags its feet with payments is worse than fighting a trench war, unless you have direct access to a helpful person who can sign the checks.
Also, FWIW, getting paid by a public administration that drags its feet is even harder. Just pass on the RFQs, unless you've a legal department that can strongarm them into paying through court action in the event things do go as planned.
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Fighting a bureaucracy that drags its feet with payments is worse than fighting a trench war
So, how were things at Passchendaele?
Not disagreeing with your point, just noting that this is a really ... over-the-top ... analogy, just about as dumb as calling the recalcritant company "a bunch of Nazis" would be, for much the same reason. The Western Front in WW1 is a pretty good candidate for the worst place in the entire history of the world.
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I second the motion. In addition to continuing to send dunning letters to their accounts payable department, talk to your business partners. Whatever team you're working with, they're going to have more pull from the inside than you can push from the outside. Maybe you tell them you can't afford to keep going at the same pace and have to shrink your team on date X, and that will leave unfinished work that you can no longer deliver on schedule. Maybe gentle hints that your corporate overlords are talking
Rewrite the terms of your contract. (Score:3)
They're done with you. Might as well sue them now, start to document everything assuming this will end in court. Sue their local operations, often those are cash poor but I'm assuming you invoice is a rounding error to them.
You should have put teeth into your terms as soon as the big corporation got involved. 1%/day late payment. Back then they might have needed you badly enough to agree.
Now you are at mercy of the courts.
What ever you do, don't take their web sites down. Then they will own you.
The multinationals internal IT is bad mouthing you. They will almost certainly screw up replacing whatever you are doing. That won't help you at all, but might make you feel better.
Be prepared to liquidated/sue (Score:5, Interesting)
Find a tentacle close to you and say that you have to pay rent so sadly you're going to have to sue said tentacle. Take an an onion and maybe a friendly, competent, but not-massively-expensive lawyer.
In the UK, any invoice not paid for 21 days beyond the agreed date renders the non-payer liable to liquidation. Liquidating clients is not great (though you should have acted on your credit control rather sooner) but I once had to threaten a major banking client with it and at the end of a memorable Friday I got my very very overdue money and my client got itself a new head of accounts, and I found that I had a few powerful friends inside the company amongst those pleased with my work for them.
6 months is technically known as "taking the piss".
Stop doing any further work until you get some sort of staged payment started, or start legal action. If you're entitled to the money and you take it slowly and gently and without grandstanding, you may well get it, and may even keep the client.
Start credit control earlier in future: that's your responsibility to limit damage.
Rgds
Damon
File a Lien (Score:4, Insightful)
http://en.wikipedia.org/wiki/Lien [wikipedia.org]
It might be too late and you'll need the assistance of an attorney familiar with international contracts. But the next time the board of directors flies that company jet into St. Moritz, its yours.
Bad sign (Score:5, Insightful)
A potentially similar sign came shortly before the big sub prime disaster. A guy had money in a Big Euro Bank money market fund which, in theory, will return your money in about 24 hours. So a really good deal came up on a house (house prices were about to crash but hadn't yet) and he needed a big down payment of a million dollars. So he goes to his guy and says, "Withdraw a million." the guy invokes some obscure clause and says NO. He freaks out and then demands all his money. They say they can delay something like 30 or 90 days and they do. So it turns out to be fortunate and he misses out on the house and eventually gets his money. But when I told this to a person I know who is a huge trader he just told me I was wrong wrong wrong, the Big Euro Bank was probably the most sound bank in the world and that they were old and had a huge reputation and wouldn't screw someone like that in a million years. He went on to say my money market friend was probably lying to cover up the fact that he was out of money, not the bank. Needless to say that bank went right to the brink and without government intervention would have died.
The take-away is that either the people who are handling your account are incompetent, are mean, or that you now have a valuable insight into a company on the brink.
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Limited Options (Score:4, Interesting)
You could also send them an invoice along with a letter stating that the invoice is overdue and will go into collections if not paid within 30 days. You should be able to find a collection agency pretty easily, many of them work by buying the debt from you at ~25 cents on the dollar. Many companies will try to avoid collection as it will impact their D&B rating.
What can a small company do (Score:5, Informative)
Are you still working with them / do you want to continue working with them? If so, the approaches you might take may well be different to those if you were "just" after your money.
I've not idea where you live, but it's worth being careful that breaching a contract yourself (such as failing to provide services which you are obliged to provide) is not excused on the basis that the other party is not complying with its obligations — unless your contract says that you can stop providing services if you have not been paid, simply ceasing to do so might put yourself in breach. But consider what the risk is to you, if the company really is that far behind in payments to you.
Depending on where you are, how about a letter before action — that, unless you are paid, you will take legal action? Depending on the sum you are owed, you might have a route through a local small claims procedure, even a money claim online — if it's a case of a project manager causing delays to try and stretch their budget, this approach might just get it before the company's legal team. If you've got as strong a case as your summary suggests (that might be a big "if," of course), it may be in the company's interests just to settle, to avoid litigation; you may just be looking for their legal department to put a boot up the backside of the relevant business unit to stop messing about and get it paid. If no response, go to court seeking default judgment, or perhaps see if local laws support you applying for the company to be wound up on the grounds that it is not able to meet its liabilities as they are due — even if you do not want to wind the company up (you want your money), it can take something as drastic as this to get someone to sit up and take notice.
Some companies publicise their CEO's details — try looking for those, and writing directly. Else, write a snail mail letter to the CEO's office, or the head of legal, explaining the problem succinctly, and asking that they personally attend to getting the matter fixed.
If you have no other way in, contacting them via Twitter might work, even if they are already receiving bad press — as long as you are polite and accurate, could it do anything but help at the cost of a few (more minutes) of your time?
Many lawyers will offer a free / fixed fee initial consultation — if nothing else, find out how much they would charge to take your case. Push for a fixed fee; you'll pay more for the certainty, but you will have certainty rather than billable hours which are harder to control. If the cost of getting a lawyer involved increases the likelihood of recovery sufficiently, you'll get less overall than you were hoping for, but that might be better than nothing.
Re: (Score:2, Interesting)
OP here. The contract was terminated with all the proper notices and acceptances, yet the payments were never settled. I've talked as far up as SVP of software dev and SVP of finance... They always seem to have an excuse, it's always "next month" or "corporate freeze on payments this mont" bs...
Re: (Score:2)
The contract was terminated with all the proper notices and acceptances
You may have terminated the agreement, but this does not (necessarily) mean that you do not have a right to be paid, which is probably good news for you. However, it does mean that threats based on withholding performance will have no power, and, conversely, that you could not be in a position of breach yourself for withholding payment.
The exact position would depend on the contract you have and, whilst I am a lawyer, I am not your lawyer, so can't offer specific legal advice. However, what does the cont
Re: (Score:2)
You're fucked. You have no leverage.
I'd take them down with the backdoor I left in the code (behind a dozen proxies in a dozen different nations). Just for satisfaction. Asking for money would guarantee a trip to jail.
Insist on prepayments (Score:2)
Re: (Score:2)
contract law (Score:3)
You had strict payment terms in your contract like net30 right?
Just cut your losses and run. (Score:2, Informative)
You need to understand that vendor abuse is the modus operandi of large multinational corporations.
I used to work for a 30B DJIA company, and during my tenure there, during the 2000's first recession, they started pushing back terms on all of their vendors. First it went from 30 to 45, and when the vendors didn't complain much, they took it to 60... still no major complaints, as the larger vendors were happy to take the business from smaller vendors who couldn't afford to loan us millions for months at a ti
Ask Slashdot! (Score:2, Insightful)
Keep on working for free (Score:3)
Seriously, they are 6 months behind and you keep sending them completed work?
Stop sending them code until they pay up. If they drop you then sue
I dealt with this (Score:5, Informative)
Of course, I didn't want to have to pay an attorney every time I wanted to get paid for a job, so I quit working with those kinds of companies.
Talk to a lawyer. (Score:2)
This is not legal advice until: I go to law school, graduate law school, become licensed in your jurisdiction, and confirm your retainer check had cleared.
Talk to a lawyer to determine where they can be sued. If you provided code to them, revoke the license to use/distribute that code and inform them of that. File a copyright on that code. Then sue them for piracy, breach of contract, fraud, promissory estoppel, unjust enrichment, etc. Once you get a judgement, seize assets, have the court find the corporat
Been there... (Score:5, Insightful)
For several years, I also ran a software business in Europe. When we started, our attorney had one bit of advice: never take a customer in the USA. We made exactly one exception, out of good will, and - sure enough, we regretted it.
If you are not based in the USA, it simply isn't worth the hassle and the risk. If they don't sue you (screw your contract, they'll sue you in a US court, which will claim jurisdiction using the long-arm doctrine), they'll screw you (as you are experiencing).
It doesn't help you in your situation, you're already there. However, for anyone else who may not yet have taken the plunge, don't. Ethics and law in the US reminds me of adventures in third world countries - it's just as dishonest and corrupt, only with prettier window dressing.
Blackmail / Ultimatum (Score:3, Interesting)
Stop working! (Score:5, Insightful)
1. They can't or won't pay you. By refusing to work anymore you're effectively cutting your losses by not giving them more work that won't be compensated.
2. They have their heads up their ass. They want to pay you, but they can't figure it out. In this case, not working will light a fire under their ass and they'll pay you.
Moving forward, make sure that your contract contains a late payment fee. Also, make sure it specifies who is responsible for paying you and who will be held responsible for non-payment. GET A LAWYER INVOLVED TO DRAFT THIS NEW CONTRACT. Don't try to do it yourself, it won't work.
In any case, if they don't pay you within the month then you need to talk to a lawyer about suing them.
International collection agencies (Score:2)
There are international collection agencies for this sort of thing. It costs about 20% of the amount collected, but it may be worth it. Check out the collection agency thoroughly; there are outfits on the web that claim to be international collection agencies but really just broker bad debt. Find a company that actually has their own staff in the target countries.
Irish law on debt is particularly severe. If you can go after them in Ireland, that's a good option.
Friends in Useful Places (Score:4)
"Find the person (individual) in Accounts Payable who will actually process your invoice, and make friends. Show the person a sample of your invoices and ask if it is in the format they prefer. If not, alter the invoice till it is easiest possible to process (if necessary, split it in two to get amounts below the authorisation limits for the person you are doing work for so that it doesn't have to be escalated unnecessarily). Then when you have done work, and have prepared the invoice, get it signed off, and take it to your friend in Accounts Payable and hand it to them, or at least put it on their desk. Buy flowers or chocolates for this person on their birthday and Christmas, and whenever they have helped you, if they can accept such. At the very least be friendly, polite, and respectful. This approach not only sharply increases your chances of getting paid on time, it also means that when you don't get paid, you have an insider that you can ask what went wrong, so you can put it right."
I have used this approach at many clients, and it really helps.
I've seen it from the other side, and have an idea (Score:3)
I work at a big multinational, and sometimes getting our people to pay bills on time can be a major pain. The company is like a cat playing with its food when it deals with smaller companies. It always prefers to leave money sitting in a bank account collecting interest for as long as possible if it can avoid paying bills on time. I think on big contracts, the delay tactics may actually earn enough people to fully pay for the people doing the delay tactics. So, what works? The company won't easily agree to contracts with useful penalty terms for late payments if it can avoid it. Their legal department is large, and yours is less so. So, they can give you all sorts of reasons to leave that sort of thing out. Apparently, you don't have solid penalty terms in your current contracts either, so you may be facing a similar issue. first, always make sure you contracts have clear due dates and penalty terms, to the extent that you can still get the work. If your terms are that one second late means the price goes up from $1000 to $10 billion, nobody will sighn your contracts, but you do have a lot of room to add teeth. When the big company pushes back in negotiation, you may need to add some flexibility, or reduce the penalties. Try to keep them in some form if you cans till get the work.
But, what happens when you desperately need the work, and they have convinced you that penalty terms in the contract are simply unacceptable? When you send the invoice, add the magic terms "X% discount if paid by date Y." Negotiate all your contracts high enough that you can afford a discount later on. Don't negotiate the discount. Leave it out of the contract. Just add it when you send the invoice. That discount is the fiscal flanking maneuver. It's their opportunity to get free money if they follow your rules, and it throws the delaying strategies out the window. The freelancers who use this strategy with the big company I work for apparently have their invoices rise to the top of thepile, and consistently get paid more quickly.
You can't unilaterally add penalties. You can't be sure that legal action will work in your favor, or that t will happen quickly enough. But you can always unilaterally add the discount for speed.
You need a lawyer (Score:2)
It's not clear how much they owe you, but if they're 6 months behind on all their payments, that's a substantial amount.
It's also not clear what your company does for legal advice -- whether you have a lawyer in-house (apparently not), or a lawyer that you regularly use, or hire a new lawyer whenever you need one. You must have signed a contract with this company. Did you have a lawyer to review the contract before you signed? A good contract should anticipate every likely problem, including this. Are there
In the UK, debt collection is pretty easy (Score:4, Informative)
Step 1, send an invoice with clear payment terms.
Step 2, send one polite reminder maybe 7 days after the due date.
Step 3, send a Letter Before Action, with a further 7 day deadline (use a firm like thomashiggins.com to turn the legal wheels very cheaply)
Step 4, file a claim in the small claims court (again, thomashiggins.com are very good for this). It may take weeks but you can add interest and all the costs you've incurred.
The few times I've done this (as a consumer) the company has coughed up at some point just before or just after the court papers have gone in. For a truly hopelessly disorganised company this is the only escalation method that works.
The furthest it ever got was with Enterprise car rentals - I had a bailiff threaten to tow one of their vehicles before they would write a cheque.
This is all advice for uncontested debts - obviously if the company has a problem with the debt they may choose to represent themselves and argue the point, but if they were going to do that, they'd probably have engaged you first!
Crawl Up the Corporate Ladder (Score:2)
2 ideas (Score:2)
Second idea is to simply sell the debt to a factoring outfit. You'll only get a percentage of the headline figure, but the loss should be written off for tax purposes (small comfort).
Send Norbert (Score:4, Interesting)
In a similar situation a friend of mine sent his "CFO", a very persistant slightly weird looking math professor, who happened not to believe in shoes....
He went to the company very politely presenting his set of invoices, and various "excuses" sent out in form of emails, and requesting to see his "equivalent" (their CFO), he spent two days comming at soon as they openned the office and leaving when they closed....
They could have called the cops, and threatened too, he explained that they could, his lawyer was waiting in front of the relevant police station just in case...
They could refuse to let him see their CFO, he didn't mind the lobby was warm and they had a coffee machine, and he brought newspapers and food.
They could throw him out, he had friends at various newspapers.
So he saw the CFO, who tried to explain that there was some reasons not to pay, so he called the office on his mobile phone putting it on speaker...
And for everything the CFO said the company had three people calling at once, on all numbers they had of anybody, and norbert made if very clear that he would not leave without closing all the loops and the cash...
Epilog, the company finally nervous accountant sent a payment order to their bank, and a copy to the company (on the insistance of norbert) the company sent a copy to the clients bank and to their bank to make sure that there was no error...
So they ended up being paid twice....
The client to "save face" and stop thinking about sent an "avoir" wich means the the company should provide an equivalent discount on future work...
Of course they never planned to bid on any new projects with this client....
Norbert got a large box of havanas...
It's a game with companies like this (Score:2)
Small Claims Court (Score:3)
1. Nice letter saying "Pay by the end of the month or I'll be forced to file in court."
2. Wait for end of month.
3. File in small claims court the sum of a)what they owe, b)maximum statutory interest, c)filing fees, d)an extra amount that if they will show up (they won't) you'll have to forego
4. Get default judgment when they don't show up
5. Get an order from the court allowing you to garnish their bank account for this amount
6. Provide said order to their bank
That will get you paid. You may even get their attention somewhere between steps 3 and 5.
E
Never, ever (Score:2)
Secondly: Never
Supply Chain / Vendor Management (Score:2)
Every medium & above -sized Corporation has at least two departments, possibly three.
1 - Vendor Management
2 - Supply Chain
3 - Accounts Payable
Find out who the Vendor Relations Manager. Ask your customer at the Company.
Engage them. They should be able to guide you through the abyss that is Supply Chain and Accounting.
Most large Companies have specific guidelines for Emailing or Faxing invoices. Purchase Order numbers typically have to be referenced on all invoices.
Do you have a Master Agreement? Refer to
Put a lien on.. (Score:2)
... go to court, get a quick judgment, and get the Sheriff or whoever it is that has jurisdiction to enforce you going an emptying a local branch office of whatever you can carry out.
Get paid.
This has actually happened in real life.
http://www.digtriad.com/news/watercooler/article/178031/176/Florida-Homeowner-Forecloses-On-Bank-Of-America [digtriad.com]
--
BMO
Killswitch (Score:2)
2 Options (Score:2)
Go To The Top (Score:3)
Labor Department (Score:4, Interesting)
If you're an individual, you can get the US Department of Labor to go to bat for you. They take an EXTREMELY dim view of businesses that don't pay for labor. (I was once on the receiving end from them -- long story, it was dispute with employee who would just come in to work without authorization and stack up hours, then complained when we didn't pay him -- and even though we were in the right in that particular dispute, WOW were they a pain to deal with.)
As others have suggested, you also do need to talk to an attorney -- but unless the invoices represent many thousands of dollars, it may not be worth it.
As for the comments here about how corporations can "rip you off" -- the deep, dark secret; the unspoken truth is, if someone won't pay you, your options are limited. Whether it's a neighbor who owes you for a lawn mower or a big corporation that owes you for work and services, you can take them to court, obtain a judgment, then execute same. It takes quite a while, though -- many, many months.
If the other party *can't* pay you, here's an even deeper secret: you're out of luck. Unless they have assets that you can seize, there's not a court in the United States that can force someone to invent money with which to pay you. I realize that's probably not the case here, but I state that just for completeness. Even if you win a judgment in court, if the other party CAN'T pay you, you have a pretty piece of paper and absolutely no money.
This is, unfortunately, normal. (Score:5, Insightful)
Since I didn't see a ton of comments posted by people who have experience with this, I thought I'd add one.
Delayed payment is normal. Large companies have very complex rules about how to make payments and how to process invoices. You must be extremely persistent and gracious in order to get things resolved. Each company will respond differently, but I encourage you to make use of some (if not all) of these following tactics:
1) Get a "Master Vendor Agreement" in place with the customer that states invoicing terms. This contract may take months to negotiate and require guidance from a lawyer. Once this is done, all of your projects should be addendums to this original master vendor agreement. This reduces the amount of paperwork the large multinational company has to do to validate each of your invoices and speeds them up.
2) Provide both a discount for early payment and a penalty for late payment. Annotate these discounts & payments on each invoice. If you carefully track your effort, you can know how much it costs you to track long term overdue payments. You can use this to determine how much of a discount you can offer for prompt payment.
3) Designate someone within your company as the "Accounts Receivable" person. It is their job to contact each customer with an overdue payment once per month (or week). They should very carefully take notes on all of their conversations and correspondence, but they _must_ be friendly and relaxed. The goal is to establish a positive rapport with the "accounts payable" person on the other side. It may take dozens of polite phonecalls to get routed to the correct person though, so you absolutely must be willing to put in the effort while not creating bad will.
4) Be gracious when payment is offered. Many times, companies may refuse to pay late payment fees; you can simply say, "I'll remove the late payment fee if you wire the money by tomorrow".
5) If desired, you can contact your bank to find out if they will finance your receivables. Some banks will provide you with cash up front (and charge you a fee) since they know how this process works.
6) Don't harass your point of contact until the invoice is more than a reasonable amount late. Generally, in a big company, the person who signs the contract doesn't even know the person who actually pays the bill. You want to avoid harassing your point of contact (who is usually your biggest fan) until you really need their help getting the bill paid.
7) Know your customers' "approval limits". Generally, executives at a large company will have specific approval levels - for maybe $500 they can simply file an expense report; for $2500 they have to file one form with one signature, and for more than that they have to get approval from a VP level person. If you can keep your projects small enough, you can bypass some of the challenges.
8) Once you've read lots of advice on slashdot and picked a strategy, contact a lawyer before doing anything. Most lawyers will be able to confirm whether your plans follow the law quickly. It'll only cost you a small amount.
And finally, remember, "managing receivables" is part of the cost of doing business with large companies. Factor it into your project costs.
Re: (Score:2)
I would not do this except as a last resort. You will be labeled as an international hacker.
Unless you hold the domain registration, then you have them by the balls. (for that domain at least)
Re: (Score:2)
...and get sued to oblivion (Score:4, Informative)
Just in case anyone thinks this is a good idea (and evidently some of you do, as this is currently scored +4 Insightful)...
No. Don't. You'll be sued, and you'll lose.
It might feel good. It might seem fair. There are plenty of people here who'll say they deserve it. They may even be somewhat correct. Don't do it.
If they're a large multi-national corporation, however, I doubt an external small vendor would have access to do this, fortunately.
Lastly, one should always carefully consider if one really wants to take advice from someone who's suggesting quite major actions of high impact and who gets confused between simple homonyms. (Joe_Dragon, you mean "their".)
Re:Step 1... (Score:5, Informative)
The odds are that if OP didnt give us the name, its because he/she was not authorized to do so by superiors / legal department. Publicly calling someone out like that without being cleared first is a bad idea: for the poster, it could potentially cost their job, and for the company it could start a defamation lawsuit.
Re: (Score:2)
Last time I checked Nokia is based in Finland which is not in the US...
Re:Call out the Mafia? (Score:2)
Re: (Score:2)