Articles

Collecting What's Owed You
by Dr. Lynne Curry

Question:
My little business is about to go under because people hire me to do work and then don’t pay what they owe. A lot of times, these issues get messy, waste my time and keep me from doing the work I’m good at. As an example, in January I agreed to do a customized project for a gentleman I met socially. I delivered this project with an invoice in March and have not yet been paid. There were problems with the delivery of this product because my computer crashed in January and he didn’t return telephone calls for questions I needed answered before completing his work.

Still, when I delivered the product in March, he accepted it and told me it was fine. I then billed him once a month and haven’t yet received any payment. It wasn’t until last week when I called asking where the money was that he told me the product hadn’t been exactly what he wanted. I asked him why he hadn’t mentioned anything before and he said he didn’t want to hurt my feelings. Frankly not paying me hurts a lot more than saying he wasn’t happy. This man is ticking me off. How do I collect the money I’m owed?

Answer:
You’ve raised two issues – how to get paid and how to prevent payment disputes.

Clients who don’t pay either lack the money or don’t feel they owe you. In many instances, you have a tougher challenge collecting from those who dispute they truly owe you than you do from those temporarily lacking funds.

From your description, you seem to find clients who don’t pay. This means you need to examine your business practices. If you want to survive as a business, you need to select those who need your services and then provide them products that meet and exceed their expectations.

Here are questions to ask yourself – how did you make sure you knew what your client wanted? Did you reach any initial agreement with your client as to what you would charge him for your services? When he didn’t return phone calls, could you have gotten his attention by a fax or email? Should you have stopped work when you knew you weren’t sure you knew enough about what he wanted to assure success? Do you too often agree to provide work to clients who lack the money to pay you what you charge?

Next, you need to shed your anger. Get on the phone with this client with a tone as angry as you had when you called me and he may hang up on you. You need to get him to want to pay you. Start by getting over your frustration that you haven’t been paid for months. You contributed to this problem by billing him repeatedly without calling him to find out whether or not you’d given him what he wanted.

When you call this man, ask him what prevents him from paying you. If he says he lacks money, ask him if he can make partial payment and get a specific commitment from him. If, however, he says he didn’t get what he wanted, ask if you and he can discuss what happened so that you can both make sure the same problem won’t repeat in the future. Listen carefully to what he says. First, you may learn a lot that will help you succeed in the future. Second your client will become more likely to listen to you if you listen to him first and establish yourself as someone willing to work with him to find a solution.

You may learn he had unreasonable expectations for what you were to deliver. If so, realize you share part of the blame for not clarifying for yourself and with him what he wanted. Perhaps he has buyer’s remorse because he asked you to provide what he now considers a luxury. If so, handle the discussion with him well and he’ll realize that fairness requires him to pay you.

Maybe you will learn you oversold your ability to him and your work fell short of his expectations. If so, perhaps you should settle for a partial payment. Possibly he’ll realize, as a result of your call, that he shares the blame for not getting what he wanted and will decide to pay you in part or in full. Finally, perhaps you can gain his agreement that if you fine-tune your product to meet his needs he’ll pay you in full and you’ll gain what you wanted all along – a happy paying customer.