# General Business Category > Business Finance Forum > [Question] COD late payments

## Perform Computers

Hi all,

I run a sole prop IT Company, and did work for a client about a week ago. Labour, call-out etc

Invoice comes to R880,00

I have a signed job card for the work completed, but haven't received any payment yet.

SMS the client, no reply. E-Mailed the invoice, no reply or payment.

My question is, how long is the waiting period before I can start taking legal action?

I'll probably have to go to Small Claims Court, but just wanted to know how long must I wait before I can take legal action?

Thank you

----------


## Dave A

Send a registered letter now pointing out that they're in breach of their terms and demanding immediate settlement.

I wouldn't start legal action before 30 days has passed from doing the original job and there are a number of circumstances where you need to give 21 days written notice before commencing legal action anyway. It may or may not apply in this case, but sticking to that routine as standard practice comes with a hoard of benefits. 

The problem might be a cash flow cycle thing. Allowing 30 days to pass gives the client a decent shot at paying the bill - whether it be after payday for employees or some point in the monthly cycle for businesses.

Some people are bastards and some people are simply struggling. Make sure you're dealing with a bastard before you sue. And when you do, knowing you're now dealing with a bastard, make sure your ducks are in a row all along the way. The slightest technical hitch can cause serious misery.

----------


## Perform Computers

Thank you Dave.

----------


## SilverNodashi

I sit with the same problem. Invoice is R18K, client short paid by R6K since they feel that a lot of the work was over-invoiced for. Part of the R18K invoice included MS Office, Quickbooks & Antivirus licenses so the R6K was pure labor. We spend a whole week at their premisis doing a lot of work (migrating data from old PC's to new PC's, cleaning out virusses, upgrading MS Office, diagnosing & fixing compatibility issues with Quickbooks 2002 & Windows 7). We're still trying to get the money from them since October last year.

----------


## Perform Computers

I'm going a different route with these people that don't pay. My amount is small, and I'm not going to waste time trying to get it.

However...

I'll blacklist them. If it takes me 6 months, I don't care. Blacklisting is WAY better. They won't be able to buy anything on credit. ABSA blacklisted me for R900 odd, so I'm damn sure I can blacklist for R880.

I'd say go with this route. I'll find out the procedure to do this, and let you know. I  worked for a small company and we had lawyers that did debt collecting. I think I still have their details.

Awesome people. They call the client, send out letters, & if they don't pay, BAM! They blacklist them.

Let me see if I can post the details so you can contact them. I think they take 6% as a fee, but I can live with that.

----------


## Neville Bailey

> ...the R6K was pure labor. We spend a whole week at their premisis doing a lot of work...


Here is an extract of an article on News24 a few days ago, by Georgina Guedes, which highlights the quandary that many small business owners face, who charge for their time and expertise:
_ Theres a tale about a plumber who is called out to deal with a blocked  pipe. He gets to his clients house, assesses the problem and then  bashes the offending pipe once with his fist. It gurgles into life.  Thatll be R500, he says to his client.
__R500! she says in horror. But you just bashed it.__Thats R500 for knowing exactly where to bash it, he replied.__A friend of mine recently had some business cards made. She was outraged  by the layout fee charged by the printer who converted her word  document into a business card layout. It took him two minutes! she  said, indignantly. It was just text.__While I felt that the printer could have been more upfront about the  associated costs of layout and design, which I agree were fairly minimal  activities in this case, I also pointed out to my friend that it wasnt  something that she could have done herself. She wasnt paying for the  10 minutes of his time, but the years of training hed had to be able to  do it so quickly, like the plumber.__Anyone who works in an industry where they bill for time and expertise  rather than a tangible product runs afoul of this kind of reasoning at  some point, just like the layout artist and the plumber. Architects,  writers and IT technicians all get squeezed for discounts on their time,  while clients willingly cough up for fittings, printer bills and  computer equipment.__Aside from the fact that everyones out for a discount, people just  dont attribute the same value to services as they do to items. Once  youve seen a plumber bash a pipe, you reckon you could do it yourself  the next time. And you probably could, as long as exactly the same  problem presented itself. But when the blockage is somewhere else, you  need to call the plumber again.__As a writer, I frequently run into the kind of arrogance that assumes  that because a client knows how to start with a capital letter and end  with a full stop, my part in the process is irrelevant. Rather than  paying me to do the job well, theyll have the secretary who writes the  terribly witty signs for the ladies loo to edit the annual report. And  then, just because theyre a bit anxious about her grammar, theyll send  it to me for a quick once over. Then the trouble really starts.

Its very difficult to justify the costs of fixing something that a  client doesnt perceive as terribly broken in the first place. Theyve  happily inserted reams of text peppered with thinking out the box,  going forward or cutting edge solutions, and think theyve  communicated effectively.

They call in a professional writer because something tells them they  should, but think that Ill just correct one or two glaring errors and  charge them R250 for the job. Try to justify the time and expertise  required to create a document thats consistent, well-written and  contains the right messaging, and the client will go blue in the face.  In this case, I find that bright, sparkly, red track changes really  help.

__ Photographers often have the same problems. People honestly think that a  grainy, badly-lit, terrible-contrast photograph taken with a cell phone  is a perfectly acceptable image for publication. If anyone in the  production process complains, they tell their designers to fix it up in  Photoshop but they dont want to pay for that, either.
__Its as if the whole world fails to understand that the expertise and  quality control that goes into writing a report, building a house,  taking a photograph or fixing a computer is the result of years of  training and experience. They wouldnt call us if they could do it  themselves, but then they resent the fact that they had to pay for it  when we make it look so simple.__So, consumers of services, this is an open request to you to pony up and  show some gratitude for a job well done. You should be asking  yourselves, can I do it that well myself? or do I know where to bang  the pipe?__- Georgina Guedes is a freelance writer. She believes in paying for  services, whether they are performed by friends or providers._

----------

Dave A (12-Feb-11)

----------


## BusFact

Have you tried a phone call? It forces them to give you some sort of answer. SMS and emails can get lost is a disorganised client's daily schedule.

----------


## Perform Computers

Alright, let me call him. He probably won't answer, but let me try anyways.

----------


## Perform Computers

Hi all,

OK so I contacted a debt collection firm here in Cape Town and immediately got a response from this client. Complaining about how he isn't satisfied with my service etc etc

Point being, it's funny how when debt collectors call people, they respond.

I have another question though, and I'm going to ask it here.

This client is now complaining about my service, saying how he had to get another "highly competant MCSE IT guy" in to fix the stuff I had to fix etc etc

My question:

Surely when you have your own business you WILL get people that complain about your services etc etc. After all, you cannot please everyone.

Is it best to learn from your mistakes and just carry on? I mean, I cannot beat myself up over this one client who is unhappy.

Thoughts?

----------


## SilverNodashi

Andrew, 

This is one of the lamest excuses. 

In all honesty, between you and me (I'm in a similar boat as you), did you really give them poor service? Was the issue resolved? Do you have a signed-off timesheet / invoice indicating what you invoiced them for?

South African's, in general, don't like to pay. For anything. And they'll try and get out of paying for anything wherever they can. Unless they have proof of the other IT firm redoing your job (I would checkup with them myself), they have no leg to stand on and are just plain jerks for not holding up their part of the bargain.

----------


## IanF

I would ask to see the invoice from this more competent person and ask if you can contact him to find out what was wrong. Just say you want to approach this as a learning experience. If nothing comes of this ask him what he thinks your service was worth and accept whatever he wants to pay you and write off the rest. Just inform him if he undervalues your work, you won't work for him again, you don't work for peanuts. 
I once had a guy who only wanted to pay for the printing and not design, treated him as above. When he came back for changes I told him as our artwork was worthless to him we had deleted it. He went white and we never saw him again but was not happy if you let customers walk over you they will. Good luck with this dealing with unreasonable customers is hard, so look for reasonable ones.

----------


## AndyD

If the customer only starts to complain about your service when payment is overdue and you've started taking active steps to collect the money then I would have difficulty taking that complaint seriously. It is remotely possible they had genuine issues about the service you provided but if their concerns hadn't been raised before now then I wouldn't accept that as a reason for non-payment. I would start the legal letters and proceedings based on the work being signed off on the jobsheet.

----------


## Dave A

Sometimes it helps to remind them:

Having to call in someone to "fix the problem" without them letting you know there was a problem is not grounds for non-payment. It *is* grounds for a counterclaim, which they will have to prove just as rigorously as you will have to prove delivery of your service.

----------


## Perform Computers

Hey guys,

Thx for all the replies.

Yup, this client only sent me this e-mail yesterday, complaining about the work I haven't done etc AFTER I handed him over yesterday morning. So the debt collecting company obviously called him asking for payment & informing him that he has been handed over.

E-mail after e-mail, no reply.
SMS after SMS, no reply.
But when handed over, then he suddenly sends me this snotty e-mail.

I told him that if he wasn't satisfied with my service, he should've contacted me & I would've gone there & fix whatever wasn't fixed. But no, he doesn't do that.

Being the owner of a sole prop I pride myself on my service. I have gone the extra mile for clients before, because I KNOW how it feels like to receive bad service. Especially in Cape Town.

I'm not going to let this guy get me down. I'm going to get my money from him & never see him again.

He still had the nerve to say I was ripping him off with the invoice. I replied, "That is what I charge per hour for labour, & please refrain from making such comments about me & my company".

When I arrived that day to do the work, he wasn't even there. After I told him what time I would be there.

Once again, thx guys for the replies.

I'm not going to let this ONE "client" get me down.

----------


## Perform Computers

Update:

Handed this guy over to debt collectors. R880 invoice. I got R320.

Oh well, it's better than nothing....

----------


## daveob

just curious - how much did the debt collector keep ?

----------


## Dave A

> Oh well, it's better than nothing....


Goes with the territory, I'm afraid.  :Frown: 

And way better than throwing good money after bad.

----------


## Perform Computers

The debt collectors retain 20% of whatever is recovered. Pretty good deal seeing that they do ALL the admin. They call the client, make arrangements for payment, keep you updated etc.

The minute they called this guy, I was paid within 24-48 hrs.

----------


## Perform Computers

Hey guys,

I'm going to post this question in the same thread.

Scenario:

I dropped off a business card at a small company. Day or two later PA calls me. "Help, I cant login to XP & I have to do wages today"
I goto the client, quote them, take the PC to the office, fix it, and return it a few hours later.

Before returning it, I send a fax with the invoice, stating on the coverhead, "Terms strictly COD"

Drop PC off, client says, "We don't keep cash on the premises, is an EFT ok tomorrow?"

My question:

How do I prevent this from happening? I clearly stated it's COD. When the PC is plugged in and she can see it's working, I can't exactly plug it out & take it with me saying, "When you pay me you'll get it back".

Irritates me so.

How do I make SURE she understands, no cash paid when I'M THERE, no me coming out to drop it off. ( Need to inform the client ina  professional way so they don't get cocky about payment ).

Thx guys

----------


## Dave A

> Drop PC off, client says, "We don't keep cash on the premises, is an EFT ok tomorrow?"


Say "An EFT now would be better..."

If they give a reason why it can only happen tomorrow and it seems genuine enough, it's probably worth the risk vs the schlep of coming back.
But if the explanation doesn't satisfy, start disconnecting and say "No problem, I'll come back with this once the payment reflects in my account."

----------


## Perform Computers

Yea you see I normally plug in the PC, and show the client everything is working. Then I give the invoice. So by then, everything is plugged in, and I can't exactly unplug everything and say, "I'll bring it back when you pay".

You know, I actually tried that once with a home user. He didn't have the cash. He literally stopped me, saying, "Where do you think you're going with that!"

What do businesses do normally in this situation? I assume they make it COD, but have their debtors call within 7 days or something right? For payment.

----------


## IanF

Put down the follow up for 3 days and only worry then, now start with the marketing. 
I have found that you mustn't dwell on the negative, it puts you in a bad mood and can ruin your day.

----------


## Justloadit

Simple, insert a user name and password on the system at boot up. The password is given once payment received. The P C will remain operating until it has to reboot, which happens at least once a week, so there is enough time to make the EFT before switching off.

----------


## Perform Computers

You know, thats what my girlfriend said. Put a password on, and when payment is received, give them the password.

----------


## daveob

not a bad idea, but I would make sure that the fact that you'll be adding a user / password option is clearly stated on the job card that you complete with the customer when you collect the PC. Otherwise you run the risk of getting a reputation of devious under-handed practices - even if it is for the best intentions.

----------


## adrianh

> You know, thats what my girlfriend said. Put a password on, and when payment is received, give them the password.


I think this is a very bad idea. What happens if you or the client is hit by a bus.

Yes ok the company owes you R800 or whatever but it doesn't give you the right to potentially sabotage the computer.

The best thing to do is to phone the client before delivery and ask them to have the cash on hand - say that it is company policy - if they say why then say that as a very small business you have to manage your time & cashflow very carefully (like Mr Delivery) When you walk in the door, before you start with anything ask them whether they would be ble to pay the invoice before you leave.

Another angle is to make out as if you work for a terrible boss who will kill you if you don't come back with payment. Say that the boss has these policies and you just work there. Doing this means that they can't force you into making a decision on the spot because you are the boss. It took me a long time to learn this. A customer tried to force me into a corner the other day and i really didn't have a suitable reason for not doing what he wanted - ( I simply didn't want to do it because it was potentially dangerous) I said that I'm sorry but the company accountant doesn't allow me to do that.

Bottom line: Depending on the situation, act if you are a small cog in a big wheel with very powerful allies - how does the customer know whether it's true...Lie when it suits you.

----------

AndyD (25-Feb-11)

----------


## sterne.law@gmail.com

Rudi is right on the money. Lame excuse. They never raise the "Not working/unhappy" defence until the heat is on. I take this as they either dont want to or cant pay, normally the former.

A legal route that may help, particulalry for you Rudi, is the use of a Provisional Summons. This route is specifically "designed" for the person owed money, and actually stacks the odds in your favour.
The provisional summons can be used where the debt can not be disputed, ie a acknowledgment of debt, bounced chegue OR SIGNED invoice!!!!!! You submit the documnet with the summons. No affidavits, particulars of claim or anything. The debtors only possible defence allowed is - not his signature or an agent. If they want to dispute anything else such as performance or lack thereof, they *must first PAY the debt* before they will be allowed to take the matter further. The provisional summons also bypasses the need to get a writ for execution and all taht process - it is a one stop shop!!
Summons tends to push you to the top of the list where the debtor is  messing you around!
The summons can be done by anyone(standard format) your only cost will be the sheriff!
More than glad to send you a copy of standard format summons Rudi

----------

AndyD (25-Feb-11), Dave A (25-Feb-11)

----------


## SilverNodashi

> I think this is a very bad idea. What happens if you or the client is hit by a bus.
> 
> Yes ok the company owes you R800 or whatever but it doesn't give you the right to potentially sabotage the computer.
> 
> The best thing to do is to phone the client before delivery and ask them to have the cash on hand - say that it is company policy - if they say why then say that as a very small business you have to manage your time & cashflow very carefully (like Mr Delivery) When you walk in the door, before you start with anything ask them whether they would be ble to pay the invoice before you leave.
> 
> Another angle is to make out as if you work for a terrible boss who will kill you if you don't come back with payment. Say that the boss has these policies and you just work there. Doing this means that they can't force you into making a decision on the spot because you are the boss. It took me a long time to learn this. A customer tried to force me into a corner the other day and i really didn't have a suitable reason for not doing what he wanted - ( I simply didn't want to do it because it was potentially dangerous) I said that I'm sorry but the company accountant doesn't allow me to do that.
> 
> Bottom line: Depending on the situation, act if you are a small cog in a big wheel with very powerful allies - how does the customer know whether it's true...Lie when it suits you.


So you're actually saying that we should let clients walk over us, and take it with a smile?

----------


## Perform Computers

The best option is to call the client and inform them you'll drop off said PC at a certain time. Then add, "How will you be paying?" If it's COD, then add, "Please note it's COD when the unit gets dropepd off".

Doesn't sound rude or unprofessional.

Client paid today after I had to call and ask for the money. Funny how you always get the, "Oh hasn't Joe Soap paid you yet? Damn, I did tell him! Let me go tell him again"

----------


## daveob

How about e-mailing / faxing the invoice and ask them to do an EFT and send the confirmation to you, so that you can thereafter schedule a time to return to the client's office with the PC. Your boss does not allow you to make appointments to return the repaired goods until the company accountant signs off on the job.

This way the ball is in the client's court - you're not chasing him for payment - he is chasing you for the PC.

----------


## adrianh

> So you're actually saying that we should let clients walk over us, and take it with a smile?


I presume hat you are referring to this passage:




> I think this is a very bad idea. What happens if you or the client is hit by a bus.
> Yes ok the company owes you R800 or whatever but it doesn't give you the right to potentially sabotage the computer.


You got me, my words must be poetry if you can read this underlying meaning into what i said.

And you came to the conclusion that this is what I said, how?

Anyway, I still think that it is a bad idea to potentially sabotage a clients computer. I will not get into a huge pissing contest over R800. A client gave me R18,000 and asked me to build him some stuff whenever I get a chance, another spent R50,000 with me on and off, I owed a supplier R3000 for 7 months, he now owes me a couple of grand. I got called out today to deal with a fault in the restuarant extraction system, I didn't even invoice the client becase I know that he will pay me at the end of the month.

Look, its all give and take, you win some you lose some, you do our best to protect yourself but you do your damndest not to piss your potential clients off. A R800 deal today can turn into a R80,000 deal tomorrow. Don't be so shortsighted. If you act like a small time one man shop then you will be treated that way, if you act as if you are part of a large organization then you will be treated that way. Learn to play the part!

----------


## Justloadit

An old man once said the following "The only people who have taken me, are people I trust".

Very profound words.
There are customers and there are parasites. The thread started out with new customers, no history, it is the first time you are doing a job for them. It is a two way street, they do not know you, and you do not know them. They are trusting that you said you did the job, and you are trusting them that they will pay you. 

So, how do they safeguard themselves and how do you safeguard yourself. If you are prepared to take the knock, by all means give credit, and spend agravating time trying to get what is rightfully yours.

The problem with a computer, as has been stated here, is that once you have taken it to a clients premises, and switch it on, there is no ways that you can retrieve it if the customer has not paid. So the password is a safeguard against this scenario. 

From my experience, and please, I am not having a dig here at any religion, gender or colour, customers who state that they are reborn Christians, are religious, in the faith or anything to do with religion, at the first time we meet, is setting up the situation that you can trust them and take you for a ride. These are the scamsters, who play on your emotions.


Exiting clients, Adrianh, as you have stated, are not the problem here, it is the one time customers that are in question.

I am sorry but I get very offended when I am not paid. If the customer tells me from the onset, Victor, I have no cash to pay right now, but I need this done can you help, and I will pay you next week, then it is a different story, I have the prerogative to accept the payment terms or not. But, get me to do the job, and after I am completed it, give me the run around, well now that is an issue. The problem with new customers, is that you never know.

----------


## adrianh

@JustLoadIt - I understand what you are saying but you must understand that IT support is not a special occupation where different rules apply to other fields. If I call a plumber they make an absolute point that the invoice will be provided once the job has been completed and that they expect payment. What is the plumber going to do if I don't pay him, put all the stuff back in the blocked toilet? Is the electrician going to put a timer on the geyer so that the hot water stops flowing after 3 days? Is the mechanic doing to lock the petrol cap with his own special locking device?

I agree some customers are parasites - I have one customer that comes by and haggles about every price - I eventually said to him that we only do mail order and that we do not trade from my premises (I did this so that we are unable to get into a one on one confrontation)

Sound and Light City in Cape Town tried to take me for R12K. What I ended up doing with them was to send them a mail and said that I will start marketing on their behalf - that I would print flyers and hand hem out at the street corners saying exactly how they mistreat small business. I also said that I could market the flyers to their suppliers and customers. I asked them to consider that I am doing them a personal favour and that I do not normally provide marketing services to my clients. I went as far as asking them to select a colour for the flyer- I got paid 30 minutes after the mail was read.

I don't think that there is an easy answer other than making the point clear that payment is expected on delivery. An easy way to do this is, as I said before, to first go to their office, meet and greet and then say something like "sorry I'm a bit late, I just came from the bank to have my credit card speed point repaired. I hope you won't be paying by credit card, my machine will only be ready next week" Now the door is open ...they will waffle a bit and you can go on and say that you prefer EFT payments anyway- could they please do an EFT before you leave...they will waffle a bit but you can get to a yes or no. What I am trying to illustrate is that you can open the payment conversation indirectly and you can force them to commit to a payment method before you take the PC out the car. The client wouldn't even realize that he got pushed into making a commitment.

----------


## Perform Computers

adrianh: You've made a good point where if they think you small time they'll treat you as such. 

Bear in mind, I'm a 1-man show, and R800 might be peanuts to you, but it's a lot to me for now.

Thx to all for the advice. I think this thread is borderline Fight Club. Dave, I have all the info I need. Please lock this thread if you can.

Thank you to ALL who replied.

----------


## Dave A

> If the customer tells me from the onset, Victor, I have no cash to pay right now, but I need this done can you help, and I will pay you next week, then it is a different story, I have the prerogative to accept the payment terms or not. But, get me to do the job, and after I am completed it, give me the run around, well now that is an issue.


Great point. And you know what, I've never been let down by a client who negotiated terms up front. They've always paid. Maybe not quite as quickly as they had hoped at times, but they do pay. It's the ones that come after the job is done...  :No:  




> I think this thread is borderline Fight Club. Dave, I have all the info I need. Please lock this thread if you can.


Just robust discussion rather than a heated exchange, Andrew  :Wink: 

Now don't be selfish and let the lads play  :Big Grin:

----------


## Sparks

I will have to start reading at the top again. I also want to know how to deal with the bum who phones at 21H00 because his power is off on the other side of town. When I get there I discover that his extension lead has a joint taped up with cellotape and is lying in the water next to the pool. As murphy would have it that was the last time the ELCB would ever trip. Now he has a new ELCB and will pay by EFT in the morning. 3months down the line still waiting. This is but one of many. I lose at least 30K per year through non payment. All small amounts (up to 3K) but they add up over a year. At the time of completion the client is happy but, just send him the bill, then your workmanship is the worst in the country.

----------


## Perform Computers

Hi SParks,

In your case I would demand payment upfront when you arrive. Asses the problem as you get there, quote verbally, and demand COD. it's 9pm for crying out loud. After hours fee ! If he doesn't like it, then he can call someone else.

----------


## adrianh

Ok, lets turn the problem on its head -I once had a small time guy quote me R2K to repair my driveway which is full of pot holes. They came by and spent about 3 hours making a total balls up. The work was absolutely horrible. What now, do I pay him R2K, do I pay him 1K or do I tell him to get lost?

Yes, there are customers who don't pay, but there are also people rendering horrific service. Now I'm not saying that there is a problem with your service - what I am saying is that there are 2 sides to the coin. What happens if the customer feels that his being done in, I'm not saying he is, I am saying that he may have that perception, what then?

----------


## Dave A

> Ok, lets turn the problem on its head -I once had a small time guy quote me R2K to repair my driveway which is full of pot holes. They came by and spent about 3 hours making a total balls up. The work was absolutely horrible. What now, do I pay him R2K, do I pay him 1K or do I tell him to get lost?


Question - did you wait until he's called a few days later asking where his money is before you raised the issue of bad workmanship?

----------


## adrianh

No, fair enough, I let rip there and then. We agreed that I only pay him R1000.

----------


## Sparks

If there is a dispute about the standard of service, fine, it must be sorted out first but, there are plenty of people who want the work done but delay payment for as long as possible or just refuse to pay. How bad can your workmanship be when replacing a socket outlet? If my materials exceed 1K I will ask for the materials cost up front but, when the total is less then 1K, I go ahead and do it. This has earned me a reputation amongst honest clients that I wish to keep. I do not mind waiting a week but 6 months? A year?

----------

