mizwizzy — 2010-05-20T19:58:41-04:00 — #1
Cha-Ching! Money Talks...but can you ask for it?
When I first started in web design and even to this day, the questions arising about payments, monies due and all those cash transactions always make me nervous and uncomfortable. I don't know whether it's a confidence issue or not but I always seem to cringe when it comes to informing the client about how much they owe me or worse still, following up on a payment that is outstanding!
In some cases I have no problem stating what is due - via email/phone but in person, I tend to be more uncomfortable when discussing money. Usually the client is surprised it costs more than 20 euro in the first place (25 really but hey, who's counting) :shifty:
I do value my work and I work hard at what I do so I know I work for the money I ask for, yet when it comes down to the crunch I still feel uncomfortable discussing what is owed :confused2
Even in personal instances where someone might give me a few euro for fixing a computer or even as a present or something, I always still find it hard to accept money. I guess I just want to do them a good turn and I expect nothing in return! In some cases people even get offended that you don't take their money - but I think they get over it quick enough :lol: I suppose if I were asking a friend to fix my tv or car, I would give them money also as a gesture of their time spent on fixing a problem I had, I would expect them to take the money otherwise I guess I would be a bit put out by that too!
So, I guess my question is: How do you ask for money from a client when it's outstanding? What's the best approach when you do feel a bit uncomfortable dealing with these financial situations? Do you have any tips or experiences you would like to share? Are there any pointers you can give to help get over this barrier? Maybe I need to hire someone to handle the cashflow issues? Is that just a cop out?
Thoughts are welcome
php_daemon — 2010-05-25T06:30:18-04:00 — #2
If you already have enough clients, you can try raising your rates. Really, that's the only way to make yourself happy. Find what they're willing to pay. If they're not willing to pay higher rates, let them go and try to make up with those that stay.
If you think of it, that's a very logical thing to do. You already paid your price to get these clients by under-charging. Now you can increase the quality of your service by limit the number of clients you work with and charge more for doing so.
mizwizzy — 2010-05-24T20:52:17-04:00 — #3
@ Saul & Crazy conversation - I do believe in appreciating yourself and recognising your abilities and yes when it comes to work and pricing you should not under/over estimate - I struggeld alot with this when I first started charging clients - My initial approach was charge significantly less than my competitors - which I did and it worked for me and I got alot of business my way BUT...I worked very hard for nothing really, I didn't feel I was getting paid for the long hours and amount of work that was required per project... So I guess I felt that I shot myself in the foot!
Anyway, over time I read up on a few articles and books and began to think wait..I should really value what I do and charging little or nothing at times doesn't really reflect what I'm worth whereas others are charging thousands for doing hardly anything and at times I could do a far better job! :confused2 - I'm still struggling to find a happy medium really where I feel like I've been paid properly for the work I do - I know I'm good but the "how good" part niggles away at me, perhaps I compare myself to others too much :confused2
I guess when I think about it, it's probably one of the reasons why I find it hard to handle the money issue also - if I were getting more maybe I would be more hungrier for it!
mizwizzy — 2010-05-21T09:46:24-04:00 — #4
I always give a breakdown of what everything costs so they know they are getting value for money and obviously why things cost more than most or less.. :tup: Timeframes are never an issue for me except maybe when I extend the payment schedule for another couple of days that turn into 2 weeks! :shifty: But with the way things are with the economy, having to wait is perhaps a given, as long as I get paid I don't mind - Determining what to charge is my problem also aswell as asking for it :lol: Most times I under value what I do and I end up charging less than I should but I'm alot better now with setting a price than what I was when I first started in this line of work! I guess what my point above was basically that when it comes to being face to face and discussing money I just feel uncomfortable with the whole subject, trying to find a way to deal with it is something I've been struggling with! :confused2
lol how cunning :rofl: That's a nice approach - although I think if I were doing that my clients would just ignore it but it's an interesting concept how you can appear to be seperate with say "the billing department" I like that...I might just try that out :tup:
It's similiar to Scallio's approach :tup: I wonder though if that limits your flexibility with regard to payments...what if someone is struggling with money one week and will promise to get the payment to you the following Friday or something...do you still allow for this or do you just quote the policy when people are dragging their feet?
crazybanana — 2010-05-22T17:40:23-04:00 — #5
I think we all have experienced this :lol:
I never under-charge anything. my prices are so steep that almost no one can afford it. But when it comes to coding/design/etc, I'm not for hire anymore anyway.
I do however help people and companies for free, if i have the time and feel they deserve my help.
I just did a PR campaign for a local company here
It was shown to people in this marked from all over the world, and will be used by this company for future campaigns.
I told 'em I would do it only to help, as they are still in the startup phase, but I wanted 18k for the job - which they tought was OK. When all was settled, i told them i would do it for free hahaha.
money is not that important, what was important here was the value the company would bring to the local community - this value is way beyond money.
but, if i do a job and wants money for it, i make this perfectly clear as soon as they contact me; - I also tell 'em how much, or what they can expect it to cost.
if someone thinks it's too expensive, they are contacting the wrong guy, and should go for something cheaper.
if you do not appreciate your own work, how can you expect others to appreciate it?
my time is precious, and i don't want to waste it on people that are only wasting my time, for this - I'm too busy enjoying life and doing nothing
:tup: yeah, having a product that people actually would buy is working best for me too
shaun — 2010-05-22T13:40:39-04:00 — #6
Depends on who you've done work for.
If it's for a fair person, and you can spot them, they'd actually find it strange if you don't ask them for payment. Usually these guys and gals don't pay late either. A dream to work for!
It's the work done for "friends" that gets uncomfortable to collect. I always get skeptical when a new client invites me to hang out. I consider it a sign of someone who's preparing to squelch out at the end.
scallioxtx — 2010-05-21T19:55:03-04:00 — #7
Ask him, "do you also say this to your barber?"
You've done something for them, they should pay you for that. It's as simple as that. Why clients try to haggle themselves out of paying, and the way they do it sometimes, will never seize to amaze me I think.
datura — 2010-05-21T19:43:59-04:00 — #8
I let that go. It is not worth the pain and time to go after it. Or just keep billing with interest and let it accrue. Keep sending.
molona — 2010-05-22T05:40:52-04:00 — #9
I understand your feelings and feel your pain... I'm crap when it comes to collect money.
Oh, I know what I should do but... I feel guilty asking and therefore getting paid is a pain
php_daemon — 2010-05-23T06:08:38-04:00 — #10
Words of wisdom. But wisdom comes only with experience.
I think the biggest problem for those having this issue (including past me) is lack of clear plan. Sometimes you have to "under-charge" but you get it back via PR or word of mouth. Especially when just starting out, it's likely to be part of your marketing plan. But if you don't have an actual plan and just do it spontaneously (perhaps subconsciously knowing it's good marketing) you tend to feel pressure on yourself to charge more.
If (or when) I'm gonna go back to this type of work I will create a plan that I would follow to the letter. Including pricing, but cutting off some of it for the word of mouth to get the ball rolling. Heck, I'd do it free (that eliminates all your pricing woes altogether :lol:), release free products to establish yourself. Just like you did with the 18k project - that's brilliant PR.
Then once you actually have clients booked for the full year to come, you can raise your prices to whatever highs, and feel good about it, as the marketing pretty much comes free (or it's already paid for, to be exact).
php_daemon — 2010-05-21T14:56:08-04:00 — #11
Ah that reminds me that I have some guys owing me for 3-5 years. Good luck getting those back :lol:
Unfortunately it is hard not to under-charge for your work, especially if you get the luck to charge after the work is done without prearrangement. Not that agreeing for the payment is any easier before a project begins. I guess it comes with experience and organization.
It's much easier selling a product. It has a price and that's it. That's a no-brainer.
If I were still doing contracting work, I'd try to break down each project into already existing components (products and services) as much as possible. Components that already have a price tag so that's only a matter of doing simple math.
mizwizzy — 2010-05-21T10:12:27-04:00 — #12
Well I must say I do like that degree of seperation - I can just quote policy anymore But...knowing my luck..I'll have clients who will ask to speak with someone in the billing department or the company Director/CEO, I cannot hide behind any policy then when it's basically me who's running the show! :shifty:
mizwizzy — 2010-05-21T20:17:30-04:00 — #13
I am still chasing up with it but I'm not holding out for the balance, if I get it great I can really draw a line under that one, if I don't it'll still be case closed but lesson learned!
:lol: I know, it'd despicable the way some people go on, it really is. I actually laughed when he said about merging the payment onto the next project but he kept on talking about how great this new project will be and how there'll be more money but I wasn't interested in it at all, to me he basically just went too far and it was curtains for me where he was concerned!
I think what annoyed me the most was that obviously he went off and had time to think about how he could get out of paying me now but make it sound like it's in MY best interest...way too sneaky for my liking, clever though I'll give him that, but disgusting :sick:
datura — 2010-05-21T09:51:28-04:00 — #14
Yes we allow for that, we have had people turning payments into installments. But it is a great tool to prevent the habitual non-payer from creating all the extra invoices and so on.
mizwizzy — 2010-05-21T19:08:38-04:00 — #15
I'll get you to do the honours with the voice manipulation stuff Datura :lol:
It is important to be flexible yes...I guess as you say it's a case by case basis, just cross that bridge when if I come to it...I do like the email approach, like they can contact billing @ xyandz dot com :tup: I'll use that one and deal with anything else after that
I thought I was bad Saul...jeeze 5yrs! :lol: I like the idea of set pricing, I used to do that with templates I sold but when it comes to the web design projects not all are the same so it's difficult to pinpoint how much I'll charge, especially if clients know each other, I may charge less than one so I price down for the other because of this...not the best thing when you just break even, but atleast it's not a loss...sort of :shifty:
I do agree with the experience factor - I guess I will get better in time - I will adopt a few suggestions that were put forward here because I really believe they are fantastic, sort of ashamed I didn't think of them but hey least I know now
So how do you really chase up with someone who doesn't follow through with payment? Recently I had a case where the client paid me only part of the monies due...I was promised future work and basically he was holding the rest of the payment at ransom until I committed to another project with him...now...I don't work like this - that whole project with him was a nightmare to start with and I was glad it was over and no money in the world would ever make me want to do another project for him so in essence I was never going to do this upcoming project :shifty:
Anyways, I followed up with a call about the balance due for the current project eventually when I mustered up the guts to and I received a bit here and there but there is still a small bit outstanding. I feel lucky with the amount I've gotten so far (95%), but how do u deal with a client who decides to only pay you what they figure it's worth or even if they say like in my case "I'll pay you the rest when we get stuck into the next project in a few weeks time" :confused2
datura — 2010-05-20T23:45:36-04:00 — #16
We always point to our policies that are set by the company: "There is not much else we can do."
When you incorporate then this option is there, you also look bigger than you actually are, so the customer hesitates more to delay payments.
alexdawson — 2010-05-20T20:15:50-04:00 — #17
Don't rush the process, ensure you give them fair warning before the money is due. On top of that I would say be sure to show them what you have produced and how that breaks down into what is due. If their getting a bit tricky it's worth trying to be as friendly as possible, people are more likely to pay you if you stay calm and keep the anger to a minimum. When I send an invoice, it can also pay to send a reminder if a period goes by (sometimes people do genuinely get caught up in other things which distract them). I don't tend to have issue requesting payment, deciding how much to charge for work (based on project scope) is often my issue!
datura — 2010-05-21T11:04:49-04:00 — #18
Well, you can train your voice to sound differently haha.
But you can use this certainly with email and snail mail too. In general though, if you incorporate, there is more impact in the eye of the customer because they do not know how big or small you are.
And if they ask for the billing department you just tell them that you are the one that takes care of things.
We have had occasions where we had a collection agency involved, even going to court in some far away places.
You just have to be flexible and judge how honest the customer really is. I have had stores that went through hard times and gave them credit for half a year or so, they came out of it and paid later on. They become loyal customers when you show some understanding. It really is case by case.
scallioxtx — 2010-05-20T21:09:54-04:00 — #19
I recently changed the way I sent invoices actually. I used to send personal e-mails (e-billing is allowed in The Netherlands) with the invoice attached as a PDF file, but now I send a standard text stating the payment should be made within the next 30 days. If they don't pay I send another standard text with a reminder with a text that roughly translates from Dutch to "the original invoice has possibly slipped your mind" (the original Dutch sentence sounds better of course) and ask them to pay within the next 14 days.
If they still don't pay then I call them to ask if there is a reason they cannot / are not willing to pay.
For me these standard e-mails make it less personal, so I don't have to hestistate/feel bad about how I phrase things.
Also, if the client complains I can always blame the "automated billing system", which in fact it's not, as I'm sending the e-mails myself, but the client doesn't know that
mizwizzy — 2010-05-22T19:24:24-04:00 — #20
:shifty: two peas in a pod :lol: We'd go broke if we were in business together Nuria but atleast we'd have a laugh :rofl: :x
:sick: Agreed, a few months back think I was telling you I had a nightmare "favour project" for someone I knew - never again will I ever do any projects/work for friends/associates...for family though I think I'll always be on hand to help out in that regard though that's immediate family only :shifty: