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Sllooooowwww Payers

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Tom SeftonSllooooowwww Payers
by on Feb 21, 2013 at 10:46:52 pm

We've done some consultancy work for a council in the UK. How long would you say is too long to wait for an invoice before you start being more.......pressing for payment.

I never want to work for them again....


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Nick GriffinRe: Sllooooowwww Payers
by on Feb 21, 2013 at 11:04:01 pm

Not sure how it is on your "side of the pond," but here it's not uncommon for it to take 90+ days for the first invoice to be paid by a governmental entity. SOMETIMES subsequent invoices go through faster, as in 60 days.

That said, I'm sure that Mark Suszko's state of Illinois pays much quicker. At least I'm sure of saying this before Mark chimes in.


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Aaron CadieuxRe: Sllooooowwww Payers
by on Feb 22, 2013 at 6:03:25 pm

I always find it amusing that if the government owes you money, they'll take an eternity getting it to you. But god forbid you owe them money. They'll hold your feet to the fire for it.

Funny story. One time I did some work for the town in which I live. They were behind on their bill pay. Meanwhile, I got my annual excise tax bill for my truck. So I decided that the town wouldn't get their excise tax money until they paid my overdue invoice (even though I know that the issues were being handled by two different offices in town hall). Eventually I got a follow-up letter hounding me for my excise tax money. I called town hall and politely told them that they'd get their excise tax money, when I got the money for the work that I did. Within two days I had a check in my mailbox. I was so happy that I personally dropped of my excise tax check that same day.

-Aaron



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Mark SuszkoRe: Sllooooowwww Payers
by on Feb 25, 2013 at 2:43:02 pm

Nick: LOL. Those were better days.


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Mike SmithRe: Sllooooowwww Payers
by on Feb 22, 2013 at 9:43:18 am

I've found local authorities - councils - in the UK to be usually very reliable if not always that speedy payers. For me they have always honoured any timing-of-payments agreements.

Without a contracted payment schedule, you could look for payment at worst at 30 days from invoice date. Anything longer than 30 days and you could reasonably chase things up quite hard.

Often councils have very reasonable buyers (who you deal with) but separate financial officers, with much less interest in making payment on time. So you may need to be firm early. Which council, might I ask ..?


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Tom SeftonRe: Sllooooowwww Payers
by on Feb 22, 2013 at 10:58:47 am

The council is a south coast one in the county of Dorset.

We completed the consultancy in July of last year, and then went through the process of filling in forms to add our company to their list of accounts, provided bank details, credit history etc..

They have now had the invoice for over 6 months, despite our payment terms being 30 days from invoice date.


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Paul TrunkfieldRe: Sllooooowwww Payers
by on Feb 22, 2013 at 10:27:13 am

Hi Tom, I have done some work in the past for Councils in the Midlands of the UK and my invoices specified 30 days and they paid within those 30 days no problem. That was however a few years ago. With all the budget cutting and public sector job cuts happening all over the UK at the moment it could simply be that the department you sent your invoice to has changed personnel and had become lost in the system. A friendly email might just get the ball rolling again.


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Tom SeftonRe: Sllooooowwww Payers
by on Feb 22, 2013 at 11:01:41 am

We've tried the friendly thing too - requests just get buried in bureaucracy!


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Hisham AttiaRe: Sllooooowwww Payers
by on Feb 23, 2013 at 12:26:53 am

Hi Tom,
here are some tips for now and the future.

  • ensure that they have a 'purchase order' on you. Don't do anything without it.

  • the PO normally states the payment terms. If not, then indicate the payment terms on your invoice.

  • Add in the terms a penalty for 'unreasonable' late payment. No small print!

  • Ensure your bank details and payment options are clearly stated on your invoice.

  • Send reminders - don't call - written reminders and keep copies.

  • Indicate a last reminder before 'the penalty for late payment' applies

  • Seek legal advice what to do in just cases, as the law in different states and territories differ.

  • Be prepared to request compensation for losses occur for late payments in a court of law. Ask a legal counsel!

  • Don't be afraid, if it is a council, a government or a lawyer's office. If you have done work and you can prove all the terms & conditions everyone agreed to, then no one should be above the law. But do check the T&C, as sometimes clients, incl. government agencies, hide them to have services offered and provided


  • Good luck and keep us posted.

    Cheers
    Hisham


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    Mads Nybo JørgensenRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 8:52:14 am

    Hey Tom,

    A few years back, under Gordon Brown, the government put a rule into place for securing payment for small suppliers within 10 days. You also have the government 30 day rule, after which you can automatically apply interest to your invoices.
    https://www.gov.uk/late-commercial-payments-interest-debt-recovery/when-pay...

    If you don't intend to work for them again, my suggestion would be to email a copy of invoice and communications to the head of the council, copying in the mayor and the largest opposition leader, and the person not getting you paid - that normally kick people into touch...

    All the Best
    Mads

    @madsvid, London, UK
    Check out my other hangouts:
    Twitter: @madsvid
    http://mads-thinkingoutloud.blogspot.co.uk


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    Tom SeftonRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 9:22:41 am

    Mads-fantastic! We did get a purchase order but things were pretty informal and friendly at the start-didn't think to add late payment terms to it!

    Just to add to the stories here-my dad opened our studio as a sound recording facility in the 70's. In the mid 80's he had it booked out by the Tory party to record some local radio spots for the elections. Was a quick job, easy to complete. He sent off the invoice (not a huge amount) and received a letter back from the local Tory mp thanking him for his donation! That letter is being kept until the mp in question ever gets a high position in the Tories!


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    Mads Nybo JørgensenRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 9:55:32 am

    No problem, happy to help :-)

    Remember that you no longer need to state interest charges on your original invoice/T&C as these are effective by law.

    When you send the council the invoice with the interest on, another good encouragement is to complete a copy of a court form http://hmctscourtfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf
    Add to your cover letter that it will be filed within 72 hours unless payment has been received. "At which point the council will go to court, and will loose, and will have to pay the case cost, your solicitor and credit collector"

    I too have done (paid) work for several of the political parties and government. My suggestion would be to put your invoice and thank you letter up on a word-press blog, tag (#) the tory main twitter account and Tweet it out - I'm sure that you'll soon get paid or awarded another paid job...

    All the Best
    Mads

    @madsvid, London, UK
    Check out my other hangouts:
    Twitter: @madsvid
    http://mads-thinkingoutloud.blogspot.co.uk


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    Paul TrunkfieldRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 7:08:37 pm

    Great information Mads, that is definitely going into my "weapons for obtaining payment" folder. Also, i can't stipulate enough a rock solid contract at the start of the project signed by all parties.


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    Al BergsteinRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 7:28:50 pm

    All good information, some of which goes into the ol iPhone for future reference. 90 day payment by advertising agencies seems to be the norm in the US since the 1970s, when I first worked with them. But 90+ is exorbitant no matter what the business, government or not. Remember, for all they know, you have rent, staff salaries, taxes and more to pay. If you didn't get paid for many months, you wouldn't survive, and they rely on your taxes to pay their bills.

    Do you have enough of a relationship with the senior people there to ask for a meeting? (or have you done that yet?). I found in days gone by that often a chat with a senior person, explaining that it's a delicate topic but that you have gone long beyond your normal aging period, that you talked to folks lower down in the ranks to no avail, and you really need to know what they think you should do. Politics works on back door conversations to actually get things done. It sounds like you are justified in calling for a chat. If that doesn't work, often a letter from a lawyer to their accounts payable department gets things moving. Do you retain a lawyer? Is it worth the cost of having them write a letter on your behalf?

    Al


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    Al BergsteinRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 7:38:10 pm

    It brings up one other issue, that perhaps you folks run into. What is your definition, in your contracts, of 'acceptance' of the product? This is a grey area. If you have a steering committee of powerful players within the organization, how do you go into the project defining what the acceptance criteria is? I know going in what the idea for the final video is for clients, i.e. cover the following topics, 7 to 9 minute film, etc. But actually specifying, so that Tom could avoid being told that he failed in his job, (something he might not be aware of). He should be able to say, 'according to the contract, we accomplished the goals as set out in the contract, in the storyboard and in the script. Or is that too much to ask?

    Al


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    Mads Nybo JørgensenRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 7:58:58 pm

    Hey Al,

    Interesting point about failing to deliver to expectations.

    In particular in creative industries it is "often in the eye of the beholder". I have in the past had clients who moved the goal-post a couple of miles from initial idea to development, through script to final delivery. At which point I state how much work that has been done on the project, and why we could not afford to pay them for having their video produced - it is a very crude way of doing it and not one I like using. It does deal with clients not being specific enough, which is often happening when you're working on mid to large projects for the CEO, but managed by a nervous underling.

    If you do deliver a project at the specified length, then one must assume that you've completed the job. If the client doesn't feel happy, it could be argued down to circumstances outside anyone's control.

    But it is likely to be the producer/director/sales manager not managing expectations - i.e. client thought that they were getting a "Super Bowl" size advert, and instead got cable channel no 783 after hours low-budget car commercial. If you don't manage the client, you won't win on delivery. And some clients you'll never be able to manage, which are the ones you pass on to your competitors... :-)

    Ultimately, it is about delivering the project and get the client to accept your delivery. If it is easy to rectify, just do it. If not, and it is your fault, make sure to be insured on any project costing more than you can afford to fix.

    My 5p

    All the Best
    Mads

    @madsvid, London, UK
    Check out my other hangouts:
    Twitter: @madsvid
    http://mads-thinkingoutloud.blogspot.co.uk


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    Al BergsteinRe: Sllooooowwww Payers
    by on Feb 23, 2013 at 8:10:55 pm

    Thanks Mads. Yes, I do a very detailed job of specifying that we have to work in "pre-production" phase and "production/post production" phase. I usually require a set of steering committee monthly meetings, a storyboard and a script, if only to detail key technical concepts that need to be conveyed. I also usually require either 1/3rd up front, or the ability to bill for my time monthly as I go along. I've not had a failure in 3 years of doing this, but was curious as my business is growing (I've just won another project and have a likely sure thing under contractual discussion). So I'm starting to ponder if there is a tightening up of my processes to avoid customer dissatisfaction after jumping all their hurdles.

    Al


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    Todd TerryRe: Sllooooowwww Payers
    by on Feb 24, 2013 at 1:11:34 am

    Sounds like the laws are different in the UK (fortunately, in your case)...

    Here in the States you can't just decide to add late charges or pentalites to a late invoice after the fact... that has to be stated in your original contract. Ours have non-specific verbage something to the effect of "...charges up to the maximum allowable by law..." which here, is just a bit over 2% a month.

    Now, sometimes though adding that finance charge can help... clients not realizing they are not legally obligated to pay it if it wasn't an item in the original contract... the threat can help get them moving.

    T2

    __________________________________
    Todd Terry
    Creative Director
    Fantastic Plastic Entertainment, Inc.
    fantasticplastic.com



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    grinner hesterRe: Sllooooowwww Payers
    by on Feb 25, 2013 at 6:03:26 pm

    31 days. I started using positive motivation. I add a discount now if paid by...
    Much better than rattling cages.



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    Mads Nybo JørgensenRe: Sllooooowwww Payers
    by on Feb 25, 2013 at 6:07:03 pm

    Well that may work - except for us who works with some grinders who pays the discounted rate after 90-180 days, and not the full one...

    All the Best
    Mads

    @madsvid, London, UK
    Check out my other hangouts:
    Twitter: @madsvid
    http://mads-thinkingoutloud.blogspot.co.uk


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    Daniel StoneRe: Sllooooowwww Payers
    by on Mar 8, 2013 at 1:46:40 pm

    Yeah, we tend to avoid government RFPs. It's too much work outside of doing the actual work with not enough reward.

    I have a colleague who works for a production company that specializes in government work. They have a team that handles the "business" portion, the cost of which gets rolled into the production budget. He calls it a "PIA charge."



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    Patrick OrtmanRe: Sllooooowwww Payers
    by on Mar 25, 2013 at 9:40:17 pm

    Just a data point, but a certain "not doing too well" state on the western side of the USA once didn't pay us for 5 months, which almost made us go bankrupt. I was getting advances on credit cards, etc. A bad situation, and one I never want to repeat. And we had a PO#, we submitted invoices on time, to the right people, etc.

    Sometimes a governmental entity can really mess you up. I know since then I've been really careful about how my shop works with them.

    I shoot people.
    http://www.patrickortman.com


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