Ask HN: What are some tips for handling a late invoices

[failedbyfear]

I've been working with a startup for several months. Initially things were going well, but an investor backed out at the last minute a couple months ago. At that point they stopped paying contractors and are 60 days overdue on invoices for several people (including me).

They are still paying the employees and they still have a bunch of work that they want me to do. I don't mind helping out and am willing to "loan" them some money if they start paying me for future work. The COO and controller have been ignoring my emails and calls about payment.

Unfortunately I did not put any clauses on my invoices about due dates or late payment fees.

Has anyone had success in working through this type of situation or is it best to just write them off and walk away?

[mooreds]

I had a payment that went months and months late for a couple of thousand dollars. At this point, the company had pivoted and I was no longer doing work for them.

I found out who the right person was, and pinged them every two weeks. Very politely, just "Hi, noticed this invoice wasn't paid. Please remit payment" etc. I think what finally caused them to send me my money was the Christmas gift I sent them (chocolates).

Enough about me. Let's talk about your situation.

Who wants you to continue to work? Talk to them and say something like "I'd love to continue to work, but I have late invoices, and I can't do any additional work until you are caught up." Ask this person to be your internal advocate. Ask them what you should do. Whatever you do, stop working (all the better if you are in the middle of something), and start looking for something else.

If they (COO, controller) approach you with a payment plan, that's fine, but make sure they offer a chunk up front (at least 25%) and stick to the plan, otherwise stop working.

Make sure the checks clear (banks can call to make sure this is the case) before starting again.

Don't loan them money. Don't work for free. Don't believe anything they say that doesn't come with a check.

Do change your contract to have a late payment fee for future clients, but right now you're just trying to stop the bleeding.

Once they have paid what they owe you, feel free to work for them again, but don't let them get 60 days overdue. At about 35 days I start getting real nervous.

If you walk away, make sure to continue to ping them for back invoices. It may not turn up anything, but you never can be sure, and it only takes a moment of your day.

[failedbyfear]

Sounds like great advice. It's hard to keep a good perspective when you are in the thick of it.

[shitloadofbooks]

A few tricks:

1.) If they agree to a date when they will pay you, call them that day and "remind" them and get verbal confirmation that they will pay on that day. Ask that a reference number/receipt be emailed to you as soon as they payment has gone through. Call back later (or the next day if they don't pickup) to confirm that they kept to their agreement.

2.) Call them up and have a chat about the upcoming work and let them know that it's in danger of not being completed because you can't start it without payment for the past work. Stay professional and tell them from a strictly business point of view, you cant afford to lose any more money on their job. You'd LOVE to help them, but you just can't and you'll have to find work elsewhere and most likely won't be availible.

3.) If they screen your calls and hide behind receptionists or sub-ordinates, let the sub-ordinates know why you are calling. "Can you pass on a message for me? I am calling regarding invoice #780 for $7,400 which is now 55 days overdue." This always felt unprofessional for me, but it got results. I usually saved this tactic for "customers" (really they're thieves if they're not paying) that I don't mind losing, but I actually never did have anyone leave or complain about me doing this.

[saluki]

y, stop work . . . and express to them that you're looking forward to working on the next phase of the project but you need to get your invoices caught up and outline specifics on what increment you will be invoicing and let them tell you how fast they will pay your invoice . . . since you're having problems with them I'd recommend invoicing at least weekly if you're doing hourly consulting . . . if it's fixed fee I'd break it up in to week long milestones . . . so you aren't giving them too much time without invoicing/getting paid. Good luck . . . invoice often and don't offer free work/lines of credit/loans to them . . .

[seekingcharlie]

Stop doing work unless they pay immediately.

Offer a small-ish discount for paying within the next 7 days.

Always always ALWAYS take a deposit up front before you start any work.

[brudgers]

Controllers stop taking calls when they the numbers make it pointless to take them.