Invoice for £30,000 still not paid after 3 months.

jamieh1985

Hi guys

This is painful for me to write as the amount of money is so huge but I am at a cross roads with no real idea on what to do now.

I am a contractor and have spent a very long time working for a small agency developing an app for them.

To start from the top:

• Asked to work on app for agree day rate. No written contract all verbal (Many emails etc about us talking about the work, time lines progress, bug tracking etc).
• Gave estimations on how long it would take to build the app. I gave X days.
• She said we only have X days to do it. Roughly half of what I gave.
• I kept detailed timesheets or all hours worked with descptions of what was worked on.
• I say ok, I think I can make this if I break my balls and 100% everything is available for me to work on with no delays
• She asked after 1 month of working if I could wait before invoicing her as the client hasn't paid yet. I agreed.
• After several months of work I invoiced. She immdiatley calls me on skype, which I record and tells me she can't afford this.
• Still in the same call and after realising she wasn't going to pay the agreed day rate, I agreed to a 25% discount. She was very happy.
• The app is very close to being finished, she hasn't paid the new discounted invoice she says, give me the code and I'll pay you.
• I say, I'm sorry but I need the invoice paid first. Its been 3 months.
• Things go sour, she won't pay, I won't give her the source code. She disagrees to the hours I have worked. Asks for another developer to look at the code
• I have a remote viewing of the code on my PC with the developer
• Offers £7k for all of the source code so the new developer can finish the project.
• I say no.
• We exchange many emails detailing why she won't pay me and me giving her counter arguments.
• Its been 3 months since the invoice was issued with a 30 DOI.

I think this covers most things. Do I go to a lawer? Somebody mentioned that I didn't include terms & conditions with the invoice and this could hurt me. Should I get these draw up? If so how easy is it to get them?

Pretty much, I write code and I am very bad with leagal things so any help would basically save my life.

I have very little money as I was working on this I did initially have enough to keep me going whilst I worked on the app. I wasn't really expecting to have to live this long without income.

Thanks guys for reading and if you help thanks for that as well

k3lvc

2 (well 3) words from me

Ouch & good luck

Firstly I'd wipe from your mind any thought's of getting £30k from this (and was this pre or post the 25% discount you gave)

My immediate thought would be to send the invoice to a factor but with no contract/written agreement I can't imagine them touching this

Reality is this might be the most expensive lesson you even learn but to salvage it I'd start to draft what a contract would have looked like had you made one from the details/mails/records you have i.e. we agreed you would pay x in exchange for me delivering y by this date. Make sure you keep all emotion out of the correspondence and if necessary ask them what do you need to do to achieve the previously agreed figure ?

I assume you've escalated within the agency and aren't just dealing over email/phone with an Account Manager ?

novelty-socks

I don't want to sound unhelpful, but for that sort of money it's worth getting some proper legal advice instead of just asking on here.

My feeling is that without a written contract you'll be lucky to get much out of your client (I'm guessing they don't have £30k to pay you, even if they wanted to). But it'd certainly be worth spending 30 - 60 minutes with a lawyer to find out what your options are.

Next time: make sure you have a contract, be strict about invoicing during the project (weekly, monthly or at agreed milestones).

Finally, good luck!

paddyrg

Take the offer of a buyout, but maybe at £10k. Bird in the hand, and all that.

Next time, don't take a deal at any cost, only take a good deal. Nobody outside the industry can understand why IT projects cost so much - after all you can buy a laptop for £300 from Curry's. You need to cost it clearly from the start, you need to get an agreement as to what constitutes 'complete', absolutely spec the product to death so it doesn't become an all-you-can-eat software buffet (very common in inexperienced circles).

http://www.hentzenwerke.com/catalog/sdg3.htm This will help get that side of your business together better - it isn't ideal, is a little old, but most will still apply

lisa110rry

I should tell you that I work for a firm in the construction industry that deals with claims and unpaid invoices and the like. I have also represented my company in the court (along with legal advisor) in respect of an unpaid invoice.

There was considerable communication by email which I imagine includes your client's acceptance of your initial rate. This is your contract, because both parties acted upon the agreement, then your client failed to pay.

I think you should initially send a "seven day letter" which inlcudes a demand for payment of your initial invoice "in accordance with emails dated x and y". Unless paid within seven days you will seek legal representation in this matter before the Court. If no payment, then seek legal advice and claim the initial sum. The client may make a defence stating that you agreed a 25% reduction, but that is only a partial defence. Assuming you win your case (and on what you have stated I see no reason you will not unless your client goes into receivership), there will be a judgment against your client and until paid any of your client's clients who do a credit check on the company will see that judgment and it may affect their decision about whether to put work your client's way.

SummerFun

jamieh1985 wrote: »

Hi guys

This is painful for me to write as the amount of money is so huge but I am at a cross roads with no real idea on what to do now.

I am a contractor and have spent a very long time working for a small agency developing an app for them.


To start from the top:

• Asked to work on app for agree day rate. No written contract all verbal (Many emails etc about us talking about the work, time lines progress, bug tracking etc).
• Gave estimations on how long it would take to build the app. I gave X days.
• She said we only have X days to do it. Roughly half of what I gave.
• I kept detailed timesheets or all hours worked with descptions of what was worked on.
• I say ok, I think I can make this if I break my balls and 100% everything is available for me to work on with no delays
• She asked after 1 month of working if I could wait before invoicing her as the client hasn't paid yet. I agreed.
• After several months of work I invoiced. She immdiatley calls me on skype, which I record and tells me she can't afford this.
• Still in the same call and after realising she wasn't going to pay the agreed day rate, I agreed to a 25% discount. She was very happy.
• The app is very close to being finished, she hasn't paid the new discounted invoice she says, give me the code and I'll pay you.
• I say, I'm sorry but I need the invoice paid first. Its been 3 months.
• Things go sour, she won't pay, I won't give her the source code. She disagrees to the hours I have worked. Asks for another developer to look at the code
• I have a remote viewing of the code on my PC with the developer
• Offers £7k for all of the source code so the new developer can finish the project.
• I say no.
• We exchange many emails detailing why she won't pay me and me giving her counter arguments.
• Its been 3 months since the invoice was issued with a 30 DOI.

I think this covers most things. Do I go to a lawer? Somebody mentioned that I didn't include terms & conditions with the invoice and this could hurt me. Should I get these draw up? If so how easy is it to get them?

Pretty much, I write code and I am very bad with leagal things so any help would basically save my life.

I have very little money as I was working on this I did initially have enough to keep me going whilst I worked on the app. I wasn't really expecting to have to live this long without income.

Thanks guys for reading and if you help thanks for that as well

I am in pretty much the same situation as you, bur much worse.

I originally billed my client having completed a big job for her for a cost of £125,000. That was almost 12 months ago.

In May after many months of silence from the client, I agreed to reduce the invoiced amount to £77,800 in return for her prompt payment.

Well 3 months on, still nothing received. Got an email yesterday from the client saying she has discussed matters with her accountant again and, based on advice she says she received, the most she is willing or able to pay is just £2600, and that only if I agree she could pay at what she claims is an affordable rate for her which is £200pcm..

At that rate it would be over another year to pay me, and then it only represent just over 2% of the originally invoiced amount.

What to do? Any advice welcome.

Stevie_Palimo

SummerFun wrote: »

I am in pretty much the same situation as you, bur much worse.

I originally billed my client having completed a big job for her for a cost of £125,000. That was almost 12 months ago.

In May after many months of silence from the client, I agreed to reduce the invoiced amount to £77,800 in return for her prompt payment.

Well 3 months on, still nothing received. Got an email yesterday from the client saying she has discussed matters with her accountant again and, based on advice she says she received, the most she is willing or able to pay is just £2600, and that only if I agree she could pay at what she claims is an affordable rate for her which is £200pcm..

At that rate it would be over another year to pay me, and then it only represent just over 2% of the originally invoiced amount.

What to do? Any advice welcome.

What to do is not allow such stupid credit amounts in the first place here, Basically like some other things in life if it is a large payment required ie:- extension by a builder you pay in stages and anyone doing work like this where they hang fire on money until it is a large amount needs to rethink about being in business.


Seriously this is about common sense and if the person or Company you choose to do business with cannot offer payment in stages ie:- a £20.000 job should be paid for in 3-4 parts with both agreeing the terms, Lets say it the 20k is a 6 week job then after 1.5 weeks £5000 paid and if for some reason they do not then work stops until this is done.


People cannot say that the work was there and they had to do it as nothing else was on the table for them because they were not being paid by the guys here anyway so may not be working anyway, I deal with different Companies and individuals who I invoice for work related stuff and some take the pee paying whilst others are fine but it is all about finding a happy medium so that you get paid what's due, The guys that pay me on time get a good rate whilst others that mess me around have inflated prices to counteract me waiting for the money.

colino

Arrange to see a solicitor familiar with this type of work today. Realise it is going to cost you money to do this efficiently now that you; a) may recoup, at best all, but probably just a fraction by initiating a statutory demand or; b) cost you for the legal advice and you put the client into liquidation by having their company wound up. Thankfully I've learned to select my clients better, but I would have no compunction to exercise my rights with a chancer like this.
Finally, take the time to have decent t&cs drawn up and stick by them.

Mistral001

As others have said this is one for a lawyer due to the amount of money involved.


I have seen here on this forum posters suggesting that source code should be withheld if there is a problem with getting paid, but legally I am not sure if this is a wise thing to do. Again you need some good legal advice.

jamieh1985

Thanks everybody for your advice.

I will most certainly seek out legal advice then. I don't mind taking a small hit in costs even Plus it means I can get my T&C's drawn up at the same time.

A bit of a shot in the dark here but does anybody know any in London? Central or North. I'll only be googling one if nobody has any but always worth asking.

I have in the audio call her saying "I don't disagree with the hours you work I just can't afford XXX Rate" So I believe that is the contract there? Clearly her saying that she agrees to the discounted rate.

lisa110rry wrote: »

I should tell you that I work for a firm in the construction industry that deals with claims and unpaid invoices and the like. I have also represented my company in the court (along with legal advisor) in respect of an unpaid invoice.
.......
there will be a judgment against your client and until paid any of your client's clients who do a credit check on the company will see that judgment and it may affect their decision about whether to put work your client's way.

Thanks Lisa. I have sent a letter detailing all of the emails dates etc where things were said. In my head right now she is liquidating her company. It would be the smart thing to do, to avoid paying me as she hasn't even got the code I wrote for her.

Legal advice, 7 days warning letter I imagine.

DKLS

SummerFun wrote: »

What to do? Any advice welcome.

They are taking the yellow stuff. Seek legal advice on recovery.

Firstly quit with the credit terms, unless you want to dev my app

From now on insist on stage payments with a project kick off amount and a clear contract with appropriate Ts and Cs, it minimises the risk for both parties.
Also ensure that you have a term that states that in suitable legalese that the code is your IP until payment has been received in full.

Protect your code, put in some failsafes, the only chancers I have had in the past soon paid up when I switched off their access.

Know your numbers, understand the billing cycle and understand how your customer pays, is it a 1 man band, local govt, SME, Corporate, Global, I have customers where its as simple as ringing the director up and getting paid to another customer who as well as having a "payments system" has 12 levels of sign off