Not pay! How can you do??

[Grezzzy_Grezzzy]

Friend of mine work for himself- All his job work aboard. Sometime direct contract sometime sub-contract. Sound like good, he organise himself. But the problem is he has to advance his money and send them the invoice the end of month and PRAY please pay me the money. Have you ever face to this problem. They aren't pay, no reply email or no phone call. Give him some idea what can he do?? He told me the last invoice sent out in March ( for January ) if you know the lawyer or someone who can suggest about international law. Now he just wait and wait for his money. Thank you for any suggestion. :?:

[Simmo_V2.0]

Som nam na.

He's an idiot for doing the work without a credit note or some guarantee of payment upfront.

[Simmo_V2.0]

Your talking about an employer - employee relationship.

I was talking about a contractor - business relationship which I thought the original poster was referring to.

[anenglishman]

It's an old, old problem. Ideally u ask for a payment upfront but it can be difficult to secure. There are no easy ways around this. Maube I am unusual....i pay all my contractors, on time and without argument.

[Grezzzy_Grezzzy]

It's an old, old problem. Ideally u ask for a payment upfront but it can be difficult to secure. There are no easy ways around this. Maube I am unusual....i pay all my contractors, on time and without argument.

The problem is ppl are different, this is not just small company but this is big famous company. They still not pay the bill. They told him that the last payment you sent when the contract finish ( he used to work longer coz the project has some porblem so project manager request him to stay long ) I can't imagine ppl work for them but they aren't pay for....

[Niranahm]

This is what he should do:

* First he should qualify his clients in advance by checking their credit record and history. if it is a public company it is easy. If a private company, he can check with Dun & Bradstreet or buy credit reports online from a number of sources (depends on country). These might cost USD $50-$150 but if he is billing large amounts, it is worth it.

* He can do research by Google and try to find other contractors of the company and compare their treatment to his and see if there is a problem with the company.

* If it is an American company, he can check online with the Better Business Bureau to see if any complaints about payment have been registered.

* He can offer a 1-2 % discount for payment within (say) 14 days. If the overseas company does not have cashflow issues, they normally would consider this

* He can hold off delivery of new work if bills are not paid promptly

* He can write to his client and explain as follows: "Banks in Thailand do not have credit facilities for small business in the same way as the West and furthermore interest rates are much higher here. Therefore we ask that you strictly adhere to the terms of the invoice [or change the terms to be more favorable] else it will be necessary to increase rates to cover the additional interest rates and risk"

* It might be an option to set up an offshore account which would receive payments faster, especially by cheque

* If the amounts are not high per invoice (a few hundred dollars), if he can accept payment by PayPal or moneybookers (at a loss of a few percent) that should allow faster payment

* Make sure that he banks with an internatinal bank or else with bangkok bank. Other Thai banks are slower and more expensive to process wire transfers

* For new clients ask for part payment in advance for the FIRST job, if possible.

* Consider factoring with SME bank in Thailand (receiving money in advance of invoices) if and only if he can afford to lose 15% or more of each invoice

These are some of the positive incentives he can use without being nasty to his clients.

If they are really paying very very slowly or refusing to pay then he has to take a different line of action which might endanger the relationship -- tha might be okay if they are one off clients.

* Lodge a complaint with the Better Business Bureau if the client is in the US

* Find the name of a debt collection agency (using google) near to where the client is located, and threaten to hand over the debt to this agency if the payment is not made within 7 days. (Note that he does not need to actually contact the agency and anyway collection agencies are an expensive last resprt that may be counterproductive across borders)

* Google the business address for the nearby companies, rental building landlord, and chambers of commerce. Threaten to send emails to all the col-located businesses, chambers and the landlord (if known) asking if this business is insolvent or has shut doors, because they don't seem to be able to pay him.

* Find his industry associations and write to them or just threaten to

* Find all the email addresses of everyone in the company using the clinet website and by googling "@company.com" and write to them for an explanation.

These suggestions come with a warning that he may anger the client and never have further business.

It's also important to know which country the clients are in. For example in Nordic countries, a company's credit record is very important and if a dent collection agency is chasing them, it will affect their credit record -- so they will pay when threatened with this. Obviously this will not work for companies in less developed economies....

[admin]

Well, it would be nice if you some of the suggestions provided here worked but they ignore some common realities. Unfortunately reality often creeps in and ruins that. Disney is obviously a company that's going to pass all of the credit and cash flow and BBB checks but they are notorious for late payments. They hand out tons and tons of cushy consulting gigs but getting paid is often the trick. You will get paid though. It's just that it could be months. If you don't like it and you become aggressive about collecting they just exclude you from future cushy contracts.

When I did consulting I always tried to break the contract down into quarters and on rare occassions did I agree to payments in thirds. Half and half deals are for suckers. If you can negotiate quarters you'll have some warning if they're a slow payer. If they slow pay you can always (diplomatically) threaten to stop working or to withhold the next deliverable. Thirds gives you similar protection but it still leaves too much money on the table. Many companies will try to screw you on the last payment claiming that there's something that they're not happy with so you don't want too much money being held over your head. That's why half and half is a sucker's game. I've seen bigger projects where the company basically scrapped the project internally but let the contractors keep working until the end knowing that they're not going to pay the final invoice. It's a disgusting practice and usually ends up needing to go to court.

I got into a nasty one of these because a (supposedly) good friend of mine found the contract and negotiated the deal. He brought me in as a sub-contractor. As soon as I saw what my friend had signed I knew immediately that this was going to be a nightmare project. For that reason I refused to personally sign anything that committed me to the terms in my friend's contract. Sure enough, literally within 8 hours of both parties signing the contract the client wanted to double the amount of work for the same price. The entire contract was a fight to keep him from trying to get us to do more work than he paid for, which in itself doubled the amount of work since we were always fighting with the client.

Knowing from the beginning how this was going to turn out I made sure that everything was tested on our systems and nothing of any importance was given to him during the course of the project. At the end he claimed to be completely unsatisfied with the project and demanded that we turn over all the work materials so he could hire someone else to finish. I refused and he got his lawyers on me. When it was revealed that I was not a party to the contract because I had never signed it the lawyer started becoming a bit more friendly. Eventually, I made the client come to my office and pay me in cash. He came with several thousand dollars in an envelope and paid the remainder and I turned the work product over to him.

No big surprise but the client never did have anybody do the work he claimed needed to be done and launched the product a week and a half after I turned it over to him.

[vacanti373]

a lot of companies that contract themselves out, and in turn also subcontract their work out, have a lot of paperwork to deal with, and too many cooks in the kitchen.

paperwork shuffles from department to department

company B gets a bill from subcontractor C, but company B is still waiting for payment from company A.

many companies if given 90 day to pay, will wait the full 90 days on purpose.

and then even go overtime, and pay the interest penalty.

in my opinion, it is very rare to be paid on time.

my g/f works for a very big company here in BKK,(owned by the king) and when clients fly in from around the world, she has to take them to their factories, take them for dinner, sightseeing, etc, and she has to pay it all out of her salary ansd submit the receipts to her manager, who sends them to "accounts payable" (who sends them to someone else to be approved)

so if lots of international clients fly into BKK, she could "be out of pocket" 20-30,000 won, until her company pays her back.

i don't think that is fair.

at least she gets her $$$ back!

i hope your friend does also, eventually

[Grezzzy_Grezzzy]

I know some more details of this... The company is a large one worth millions and has the head office in Doha, and other operations in KL, London and Washington. They paid regularly for the "salary" component of the work, but took 4 months to pay the expenses (about USD10,000), by which time they also owed money for the last couple of months of the project - and it is this, including some expenses, that they are being slow about...now several months in fact. They even thought they could get away with "reviewing" the contracts after they had been signed, but I think someone in their admin finally realised that was illegal. I have thought about it and cannot suggest anything else short of chasing them. A different friend of mine also worked for them via a large European group, and they ALL got screwed by late payment. My friend nearly lost his home as a result.

Greer.

[Laurence]

Getting advises from people you hardly know might not be the best idea.

Anyway, it is fairly 'normal' for large companies to be very slow processing reimbursement for expenses mostly due to the approval process. There are few ways to deal with this, first asking for a cash advance (Via Bank Transfer for example) to cover further expenses and slightly balance the situation. This being refused would be a good reason not to trust them. Moreover if you are worried about being paid a contractually agreed lump sum price which can be deemed accepted upon reach of a contractual milestone (Say, shipment, of acceptance document of some sort) then you could try opening an escrow account which is a perfect payment guarantee but has a significant cost. Alternatively, assuming the amount of the contract is significant enough then LC, corporate guarantee or promissory notes are the best options (in that particular order).

Last, If I understand correctly, your friend is needed to finish the work, so blackmail always works.

Good luck

[Laurence]

Getting advises from people you hardly know might not be the best idea.

If we only followed our best ideas, we'd never register on TF would we?

Why you joined TF to get advises ?

[bryanwhat]

Getting advises from people you hardly know might not be the best idea.

If we only followed our best ideas, we'd never register on TF would we?

Why you joined TF to get advises ?

Not me, I just came to crack jokes and give worthless advice.......sometimes I do actually learn something.

[grezzzy_greer]

I think Grezzzy is really just asking for input so she can think about it with perhaps an alternative point of view. Knowing her, she is quite independent. I think most people post material on a web site not to get advice as such, but to air their views and see what others think. I agree it is not appropriate to blindly follow any advice given by anyone else...espacially if the one giving the advice is not aware of all the facts...so I don't really expect Grezzzy to immediately start telling her friend to do this or that because someone told her to do it on TF, but if she sees an idea that might be useful, I am sure she could make the suggestion...and of course it is up to her friend to accept that or not as well...so here at TF we are at least three degrees from the "end user".

As I indicated, I know about this particular issue too, and I too know that although well meaning, some of the advice is simply not applicable, but that is no criticism of the ones giving it, it is simply a matter of fact brought about by the limited information avialable to the "advisor".

[anenglishman]

It's an old, old problem. Ideally u ask for a payment upfront but it can be difficult to secure. There are no easy ways around this. Maube I am unusual....i pay all my contractors, on time and without argument.

The problem is ppl are different, this is not just small company but this is big famous company. They still not pay the bill. They told him that the last payment you sent when the contract finish ( he used to work longer coz the project has some porblem so project manager request him to stay long ) I can't imagine ppl work for them but they aren't pay for....

Laurent came closest. Big multinationals have cash flow mngement policies. Basically this means they pay at the last possible moment. Does this mean that small independent contractors get scrrwed? Yes.

The good news is that some bigger companies re begiining to understand that they need to support smaller contractors and they are paying accordingly.

But life sucks as an SME........it is tough as hell. Good luck!