Here is the scenario ...

One of my clients (a web designer) is now 4 months overdue, and I'm getting ready to pull the plug on him. The only problem is that he is also taking over the hosting responsibilities of one of his major clients, which happens to host with us as well (luckily they've dealt directly with me in the past, and not through this person). I realize that I should never allowed him to get away for so long, but it is now too late to argue about that.

Problem is, he might decide to remove both the accounts should I suspend his site. I don't care much for his account anyway, but the other client is a big one to have onboard, and we use them as one of our prime referrals.

How would do you handle a case like this?

A delicate situation indeed.

Of course, you already know a client who doesn't pay their bill isn't worth keeping around. I'd fire the web designer client. I've really got no use for other business owners who can't pay their bills on time. They will pay the power company, or the phone company, or other large entities that will bring legal action. They think they can let the little bills slide.

I just made the mistake of setting a client up with a new site back in early March - they were in a rush to get their site up before a large trade show, we helped them out quite a bit and I billed them after the fact. Of course, now they don't return our calls. Literally been told the "check's in the mail" 4 times over two months. This is a guy who's grossing 25K a month with a two man operation, and he can't pay a $500 invoice. It's frustrating to deal with customers like this, and I usually fire 'em long before I'll chase 'em down. It's not worth the hassle.

Sorry, back to your issue. You mention you have the relationship with the big client. Why are you letting the web designer take that over? If it's not too late, I'd go to the big client myself, explain the situation, and tell them that you greatly appreciate their business, and would like to resume a direct relationship to ensure continuity of their service. Offer them a discount, if necessary, to show your good intentions. Be prepared for the web designer to react by attempting to take the customer to another host; in that case, all you can do it hope the professional manner with which you've handled the big customer will induce some loyalty.

Good luck!

Brandon

I completely agree Brandon

Do you bill quarterly?

I give my clients 15 days after their due date, then their sites are suspended (not terminated, suspended)

After another 15 days and they have not cleared up their site is terminated.

That is 1 whole month.

I bill monthly BTW.

I also send several notices.

Greetings:

Our recommendation is to develop a policy and stick to it.

When do you suspend?

When do you delete?

Do you keep a backup for the site? For how long?

Do you charge to re-establish the account?

Late charges?

If you have a policy in writing and it is part of the contract, then you are safe to just point to the writing on the wall (so to speak).

Thank you.

That's a tough situation to deal with. If you can afford to let the late-paying client wait a little longer, I would do that. It seems like you are getting many referrals from the other client, which may make it worthwhile to be more felxible with the late-payer.

What we do is invoice for our check paying clients. Accounts are not created until we receive payment. All following invoices are clearly stated that if payment is not received within 15 days we charge a 15% late penelty. If after the 15 days we have not received payment we send a reminder notice with the 15 % penelty invoice. This reminder notice also indicates that they have another 15 days to pay or the site is suspended.

We have not actually had to suspend a site yet. I have had people email me asking where there invoice is, claiming that they didn't receive it. I don't know if they are stalling, or if they really didn't receive the invoice. But I view these clients as honest, so I will not impose the penelty on them.

For your situation though, I would bypass the middle man and contact the big client directly. I would be honest with them, yet respectful of the non paying client, and offer to be the direct contact with them.

Just my .02 cents

Originally posted by cbtrussell
Sorry, back to your issue. You mention you have the relationship with the big client. Why are you letting the web designer take that over?
The situation is slightly more complicated - the web designer in question did the design (and PHP development) for this major client when working for another company. That company split into two, and this guy started a new company, taking all the developers that worked on the major client's site with him. The client is now outsourcing all their web related tasks to the new company. We invoice the client directly, but this guy is in charge of collecting the cheque and depositing it into our account.

I've decided to give him another week or so, and will also phone him.

But I've learned my lesson - one should work out a strict policy, and make sure all clients are aware of it. And then stick to that policy, come hell or high water!

I reccomend developing a policy based on what you think is fair, and then take it to some customers and get their views on it. They may have some valid arguments for late payments, thus allowing you to create a policy that definately stands, but works well (and fairly) for both parties.

- Brandon

Originally posted by ljprevo
I completely agree Brandon

Do you bill quarterly?

I give my clients 15 days after their due date, then their sites are suspended (not terminated, suspended)

After another 15 days and they have not cleared up their site is terminated.

That is 1 whole month.

I bill monthly BTW.

I also send several notices.

this is the best solution from my past business knowledge.
15 days

mike

Mine as well Mike, If you let them go a whole month, then suspend, they only send in a 1 month payment, well now they are due again. :rolleyes:

I don't want to chase customers away at all, but they need to be consistant with thier payments.

Change your billing method. Get their credit card number. Get it even if they pay by check as a backup. Works for me and we never have a late bill ever.



Rich

How would do you handle a case like this?

Send over a couple of goons with bats and brass knuckles.

That usually works.

Well you have to make a business decision. You have to weight one bad against the other. In your case it seems best to just keep your mouth shut and hope for the best :D

forgive me i have to chime in when i see these threads,

you're here to make money that's it

we used to real nice about this, it got us no where

we send an email and 8hrs later suspend

few exceptions, although exceptions do exist...

Originally posted by miami_g
you're here to make money that's it

we used to real nice about this, it got us no where

we send an email and 8hrs later suspend

few exceptions, although exceptions do exist...
In this case I'm sitting tight, but I've already indicated to to the client that we won't provide any more support and/or add additional domains for him until the account is up to date ...

I'm also drawing up our quarterly newsletter to our clients - our new policy will be communicated at the same time:

- payment should be made within 7 days of invoice
- if no payment is received within the 7 day period, no further support will be given
- if no payment is made within 15 days, ftp access to the server will be blocked
- no payment within 21 days will result in site suspension
- no payment within 30 days will result in site being terminated (i.e. squashed, deleted, send to /dev/null)

btw - Our international clients are paying with a credit card, locals are making direct deposists or direct bank transfers. And it is obviously the locals causing all the fuss!

:D

as per the usual, client gets an email about updating his cc 36 hrs ago.
at least he replied with some bs and questions.
we answered his questions to his satisfaction but received no reply to update the cc.

we emailed him again this am, got nothing back

suspended him at 1218
phone rang at 1226
new info obtained by 12 58
back online by 115

kissy kissy huggy huggy


:blush: