I am so deadly serious - do not continue working if your invoices are late.
You don't have to be a jerk about it, just explain to your primary contact that you need to be paid and you pick up tools again when the money has arrived.
BUT it is on YOU to properly negotiate reasonable payment terms. And if you don;t know or don't trust the client then require payment in advance until a stronger commercial relationship can be settled in. Do not be a baby - go research business contracts and payment terms.
Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
Its easy to say don't be afraid to lose business, but when you're starting out, the economy is rough or all you have are the one or two clients, that's a different matter entirely.
One thing I've learned is that you always have to do the leg work, you can't assume someone will do the right thing or keep their word.
Develop a system where even bad clients, can't do too much damage i.e. upfront deposits, milestone-based payments. You have to control cash flow risks, if you are gonna take risks know what risks you're taking and when to get out.
Please don't be them. If you do good work make sure that you get your bills sent on time.
Sadly, while this is true, there are plenty of folks still doing freelance who have not learned this, and there always will be. It's just one of those lessons that quite a lot of people have to learn from experience, even after reading posts like this. The exact same reason why companies will continue to get away with taking advantage of freelance work.
Think of ¡all the exposure! doing this free labor for us will give you! /s
or:
I'll cook you dinner if you do this days of work for me /serious?!
My boss said that the ones who have negotiated the best deals are the ones that are late paying, complain about just about every bill and will write angry letters when my boss index adjust pricing.
He said it taught him to never offer a really good deal for a regular customer (ie where the upside isn't very obvious).
The takeaway here is probably that the fix isn't just "never discount", but it's to screen for the kind of customer who treats a good deal as an invitation to strengthen the relationship.
This is really the key. The "deal" has to have something for both parties. The vendor gets some kind of lock-in, prepayment, guarantee of future business, whatever it is, and in exchange the purchaser gets a discount.
The discount doesn't just come out of nowhere.
That was indeed the point, guess I conveyed it in a poor way.
As an electrician currently self-stopped (for both non-payment & absenteeism, two months no contact, so far) I'm not budging. When you didn't show up for our last two on-site meetups (and still haven't contacted), I thought about filing a lien... but decided to just keep you from having tenants (by not finishing AC/water/electric). You'll get around to it..?
When I told this LLC/owner "you obviously aren't in a rush because you obviously aren't visiting the jobsite/me" I sort of expected him to show within a few days. Then a few weeks. And now we're entering a few months.
You have weeks of my punchlists (unresolved to do), I have weeks of questions (what do you want?) and you won't even do simple things like turning on power/water.
Fuck you, pay me.
OTOH, one other clear subtext of the story is the "savior" attitude of a lot of tech people, who think that, if they weren't using version control before, think, "oh, I'll just tell them about this great thing, and because it's much better they will definitely listen to me and implement it - it's only logical". But the harsh reality is that "better" things won't affect an org that went along that far and dug themselves that deep.
Never underestimate an org's ability to shoot itself in the foot, even if you think you know better. That includes getting your money from them.
- Payment is due X days after receipt of invoice, or immediately after the consultant has addressed any quality issues, whichever is sooner
- Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
- In the event of a late payment the invoice for the next deliverable shall immediately fall due.
- The consultant shall be entitled to shift deadlines on deliverables in the event of a late payment as a result of any work disruption, without incurring any liability.
- Payment shall be made in X currency, or an exchange rate at X date on Oanda.com shall apply.
- The client is responsible for any bank fees incurred by their, or any intermediary bank. In the event of a SWIFT transaction it shall be made with the OUR payment code.
- The jurisdiction in the event of a conflict shall be England and Wales. Neither party shall be bound by arbitration.
- The client and consultant shall both indemnify the other up to the total value of the contract and shall not under any circumstance be liable beyond X GBP.
We also no longer share downloadable links of our deliverables until they are paid up. They get a view/comment only link for reports/data etc.
We’ve found that clients that aren’t willing to accept these terms won’t pay you either way.
We determine the net days on the invoice based on the credit rating of the client. Ironically, the good clients pay within 2-3 days normally, and the difficult ones are very “long tail”. About 1% of contracts tend to fully or partially default on their payments.
We’re in a particularly credit poor industry but our average delay due to late payment is 23 days. Those clients where we stop delivery pay on average 11 days sooner than those contracts where we don’t stop delivery.
This is based on around 2,000 invoices sent over the last 5 years.
It costs something like 80 quid to file for recovery in court and in our experience invoices are immediately paid up when a “Letter before action” is sent.
You burn the relationship, but arguably you probably don’t want it anyway.
I believe this is what we call small claims court in the United States. The threshold varies by state, but it is a very effective way to deal with recalcitrant companies both large and small.
In a different domain, this is the painful lesson of almost anyone who tries to help people in a bind -- you can try to help, but yours is unlikely to be the advice that sets them straight, so you shouldn't get too invested with unproven or, especially, proven unreliable actors.
Neatly distilled I believe you are correct
Why ironically? Isn't that exactly what you'd expect?
Do you still cut your own hair ;) ?
But yes us folks in the creative world can learn a few things from the corporate world when it comes to contracts and payment schedules. Mike Monteiro's talk 'F*ck you, pay me' comes to mind.
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It isn't, but you can't get blood from a stone and squeezing costs money.
It sounds like the entity that the contract is with has no real assets and/or is based in a jurisdiction which is hard to enforce judgements in. That's a case where you need to get paid up-front, which is the real lesson in this article.
The weirdest part to me, receive a call and just get up and go? Priorities? Did you write this blog post from the doghouse?
The author does contracting in niche topics. When your contracting domain is uncommon you have to go where the work is.
You can charge higher prices for niche work and therefore tolerate more time in between contracts. This person may be spending more time not working and with his family than the typical FTE in this arrangement, even if the jobs occasionally require them to fly somewhere for a month.
Or... maybe he needs income to exist.
Be pleasantly surprised when a poorly run project is being run by nice, honest people. Prep for the opposite.
Project goes well, he gets paid and they're best buds, and he doesn't even realize he was scammed (by intent). If not, well there's no point suing a failed company.
However them dissolving the entity and moving their assets and IP around is also not free and will incur overhead, if they actually did it.
Threatening to dissolve the entity seemingly admits that they do have something worth collecting against. In my experience the companies who run out of money just tell you that they’re out of money and they also start losing key employees and your email contacts because they’re not getting paid either. If the company continues to exist and they’re threatening you to not sue, that might be a sign that they do have the money but they’re relying on intimidating contractors to not try collecting it.
Legal action is not free, so all of this has to be weighed.
EDIT: I should explain how I know this. Younger me took a job with a startup that got in over its head with spending but the CEO didn’t want the party to stop. His strategy was to stop paying any vendors and use the remaining cash flow to only pay past invoices for vendors that we needed something from (more work, more product) or anyone who looked like they were going to sue us. If someone got lawyers involved, they got paid. Needless to say I didn’t keep that job very long.
Some favorites:
- No way they would actually screw me over! We're buds/they got me tiger balm/they paid some/I did them a solid
- Thin veneer of safe fallbacks that doesn't hold up under scrutiny. Legal or other 'repercussions'
- Endless delays and excuses (though it's usually too late by this point)
Often paid late, but FIVE times, I never got paid at all, one time it was several thousands over the course of months and I almost pursued it in court, but in the end I took the L.
It's always these incubator types, they're the absolute worst clients. They have the cash in the bank too, they often just forget or feel entitled and don't want to back down.
NEVER work for a YC founder.
Also, mandatory: https://creativemornings.com/talks/mike-monteiro--2/1
Choice quote from the linked talk (aptly titled "F*ck you, pay me").
> They were attempting to pull off AR effects on the transparent OLED windows of the bus without accounting for lens distortion, field of view, parallax, occlusion, etc., and were frustrated and mystified when things didn’t appear to line up. They were completely naive to what depth and scale cues are and how to deploy them.
If I don't get paid for one day of work, I will probably get over it in a few hours. If I don't get paid for six months of work, we will have a serious problem. The tighter and more incremental we can make the delivery process, the less likely anyone gets screwed.
If a party is pushing hard for long-term contracts or large up-front sums of payment, I would walk away from that transaction unless there was a literal golden goose sitting in their lap.
Honestly, this seems to be bad advice from their recovery services. Suing is 100% recommended here. There are plenty of lawyers that will work on a pro rata basis for account recovery in California. Sure, you lose a portion of your 35k; but you get more than you would have letting them get away with paying zero.
There's also laws in place to keep companies from "closing up shop" and opening in a new entity. It doesn't necessarily erase your debt (it can, but only in rare circumstances). And, even if they do get around it, it keeps them from pulling the same shenanigans going forward, in the state.
It is most likely going to not pay anyone so you need to make sure you're paid above and beyond anything else otherwise walk.
These founders hire/fire through hundreds of us, they don't give a shit.
If you say 1 thing they don't like they go to the next.
$35k seems pretty low for this job. Hindsight is 20/20 of course.
HockeyStack, Greptile, Velt all had problems paying me and all required 7 day a week, overnight, etc.
The people behind this were irresponsible, childish, and exemplars of the Dunning-Kruger effect. They weren’t really hardline crooks. Crooks are probably a lot more organized.
I have gotten myself invested with similar crowds. There’s usually a charismatic spokesperson, leading the chaos.
They likely didn’t plan to rip him off, but paying him wasn’t really something they thought about. Real crooks put lots of planning into taking money.
> Multiple very junior developers were touching (binary, TouchDesigner) code and deploying straight to production via thumb drive, with zero version control. In fact, they didn’t know what version control was.
I suspect many startups fit that description. If they survive, then they usually pull themselves up by the bootstraps, eventually. Many of them collapse, taking everything with them.
But then given what I’ve learned since I think I can say with some certainty that this particular group saw the writing on the wall and were willing to use the skilled labor and time of an endless army of cannon fodder to try to staunch the bleeding or take one more long shot at getting final payment, and doing so without the agreement or awareness of the people they enlisted to the risk they were participating in.
When the wheels start coming off, morals are first over the side.
In some cases (think Theranos), it can go all the way into straight criminality. Most times, it just reaches the point where everything collapses, when the supports rust away.
Early/frequent payment terms are always good to have but you may not always have the leverage for it depending on where you’re at as a contractor.
Takes getting ripped off a times before insisting on better terms I guess. It’s like bombing your first job interview… you can prepare but it just needs to happen.
this is only getting worse with ai.
all the artifacts of good work are there but none of the depth.
When you go out of pocket - you are out of pocket and the risk is all yours. If that one thing was different then all the remaining risk is on the client - they don't want to do version contr - ok cool you still get paid.
Usually when you have to pay in to get paid out (outside of a direct investment scenario) it's a scam. The people who fall for the Nigeria Prince thing are operating the same way.
That way your “discounted” rate is the rate they should have paid and they feel like they got a deal.
I hope this is a bug in my phone’s handling of something and not intentional. Until I know otherwise, I’m treating sites where this happens as deliberately hostile for the same reason as always: ads. I use reader mode to escape ads that my ad blockers miss but also to avoid poor design or hard to read fonts and the like. My response is the same as ever: I closed the article.
I get what the author is saying here. But it's a bad idea to treat one's work team with deep communal devotion in this way, as if they are a kind of dysfunctional family-- or, in the author's case, apparently higher in status than real family.
Doing this without proper remuneration creates a market distortion, and that is bad for capitalism.
And yet, somehow, you gave them the most important time you had for their promises.
This wasn't because of the customer or not getting paid. This was the author's choice.
A little hyperbolic, but more accurate than not when laypeople think about contracts.
A contract isn’t a magic spell, it is a declaration of shared understanding that can be used for clarity and in legal proceedings.
If you think of a contract as a way to ensure you get what you agreed, yes, it is toilet paper, because a contract doesn’t remove counterparty risk.
no it isn't. why you did not sue them? success rate of international arbitrage (New York Convention) proces into China is 90% success rate. USA/EU companies who sue Chineses companies in China for breach of contract seem to be winning rates. Enforcement of USA curt orders do not need to go thorugh Chinese courts again, and are enforced by local authorities (local sharks) with success rate of 80% for foreign firms suing chinese firms. fees are also fairly low. case is straightfoward.
if author went and sue, likely he would get his money back.
Because they could just dissolve the entity and get away with it. Did you even read the rest of the article?
This is unfortunately all too common. It's hard for someone who isn't an expert in the specific field to separate a smooth grifter from a more typical sales pitch
Ordinarily, I would sign master agreements and set PO terms up-front. Typically, the better customers would agree to very strict requirements / objectives for a particular time period for a specific price. Any deviations would require negotiation. Hourly is fine too but there must be regular milestone deliveries so that there's demonstrable value for money being conveyed rather than an appearance of a milking-oriented consultant. Expectations must always be managed.
After about a month of employment, I was told I was being rude to ask for payment. Apparently they neglected to tell me that they actually only pay their employees 60 to 70 days after they start.
Of course the first red flag was them doing the 1099 dance for slightly above minimum wage. I had been forced to do that before, but guess what. They paid us every single week.
Quiting without notice was one of the greatest feelings with these clowns. By this time they had started to ask me to literally work for free. "Unpaid training". They stopped scheduling me for paid hours anyway, so no notice needed.
Right after that I worked for some conservatives. They paid me early. My first year I got a large raise.
There were some awkward moments like the CEO telling me who to vote for. But for the most part it was awesome.
I still consider myself to be very liberal, but I don't want to work anywhere that does a lot of virtue signaling. Your beliefs don't make you a good person, your actions do.
Because, I’m sure multiple people here could tell similar stories with the political leanings of the groups involved reversed.
Nobody forced OP to work 11-14 hour days. Contracting 101 stipulates that you define your hours ahead of time. You come in, you provide your expertise, and you leave at the end of the day. Let the client's junior employees work long hours. Not your problem.
OP brought their own equipment, which is totally fine but "who provides equipment" is also in the contract from the start. OP should have made a list of equipment that the client will require to complete such a project and stipulate a client budget be set aside to cover any shortcomings as they arise.
The contract is where you define when you get paid. "Deposit is XYZ quantity, non-refundable. Contractor will be paid for the upcoming week in advance by X date. Failure to remit payment will halt work."
I understand that the point of this blog piece is that it was a learning experience for OP but this stuff is pretty obvious isn't it? This is pretty much what comes up when you google stuff like "how to get into freelance contracting." I'm shocked and feel bad for OP for letting things get this far. Sadly, they were not ripped off by anyone but themselves.