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Johnny
12-01-2003, 05:49 PM
Hope this isn't too far afield from the talk..I know that we all like to get paid..

I wonder what the prevailing wisdom is concerning getting paid, especially from clients you deal with only on the web or on the phone..

I'm thinking specifically about getting paid in a quick method, so that you don't hold up the work, in the case of getting 1/3 or 1/2, etc, up front, the rest upon delivery..AND so that you don't have to worry about checks bouncing, waiting for them to clear, etc.

thanks!

Johnny

A Mejias
12-02-2003, 02:58 AM
1. Get a deposit of at least 1/3. Any outlay of non refundable special supplies, equipment, subcontracted labor, etc. should be covered with the deposit.

2. Bill in stages. Once a week, once a month, in set amount increments, at milestone. Whatever just keep the cash flowing as you work and there won't be a big bill to pay at the end.

3. If the payments bounce or stop. STOP WORKING! Extend deadline!

4. Any changes should be charged and the deadline extended.

5. Don't charge by the project charge by the hour. (This keeps changes to a minimum. ;) )

6. Don't deliver the final stage till the last check clears.

7. Put everything in writing and don't let the client write the contract.

8. Go to www.gag.org join or at least get the ""Pricing and Ethical Guidelines!"

Johnny
12-02-2003, 04:20 AM
So, you favor checks as a payment method, as opposed to Pay Pal, or some other?

J

A Mejias
12-02-2003, 06:25 AM
I favor cash. ;)

I don't trust paypal so I only use paypal for small amounts. I don't trust merchants that use it. Maybe a small shop that makes a small LW plugin or two has reason to only use paypal, but real businesses should be able to take checks ore credit cards.

Credit cards take a percentage and is not the best way to go with "intangibles." Clients that don't want to pay can do a charge back and there is not much you can do about it. If you can show proof of delivery to the billing address and have signed contracts and credit card approval forms then you can fight a charge back, but it's no guarantee that you'll get to keep the charge.

They are very convenient though and you can charge the account as you go. Just make sure you have signed approval to continue to charge the card for the amount of the contract. Merchant accounts are pretty easy to get and you can even have an online account so you can have your clients go to your web site and pay online through a shopping cart. The more you bill the better rates you can get.

Checks incur no extra cost to you, unless they bounce. Just wait until they clear. Be advised that just because your bank says that it takes "5 business days" and the money is moved into your account the check may still be fraudulent and the money can be pulled back out as much as 30 day later or more!

Every method has drawbacks, just implement stringent rules and stick to them. You can always make exceptions if needed, but you must be totally comfortable in those cases. Don't do anything that feels bad in your gut! You instinct and intuition is usually right when it warns you of potentially bad situations. I'll bet that every time someone got ripped off they "had a bad feeling about it." It's happened to me! The lesson, we should have listened to our gut.

Clients that give you trouble from the start will usually give you trouble till the end. If they make excuses about your payment plan and paying for changes and paying on time even before the job starts they are going to be trouble. Get another client!

It's really just common sense. You should do a great job and do it on time and the client should pay you what you agreed to and pay you on time. Everybody wins! :D

Johnny
12-02-2003, 06:39 AM
Originally posted by A Mejias
I favor cash. ;)

I don't trust paypal...

Why don't you trust paypal? If cash isn't possible, how do you feel about cashier's checks?

J

A Mejias
12-02-2003, 05:43 PM
I don't want to get into all the reasons I don't like paypay. Do a Google search and you'll find plenty of site outlining the problems with paypal to both buyers and sellers.

Bank/certified/cashier's checks are a bit safer, but you still have to wait days for them to clear. Just wait till the money has really cleared.

Unfortunately fraud of all kinds is up and the methods used are getting more sophisticated everyday. Though the types of clients we deal with are less likely to commit the some of the more complicated fraud types they are more likely to bounce checks, delay payment and try to change terms after the fact. There are many that make a habit of cheating. But the honest ones are a pleasure to work with and really appreciate your hard work. It's worth putting in a little extra free work for them, it keeps them coming back and the good word of mouth gets you more good clients. ;)

Johnny
12-02-2003, 05:46 PM
I appreciate your time and comments..thank you!

Johnny

WizCraker
12-02-2003, 06:06 PM
Nothing like paying 5% of your income when you get paid by a CC.

Wire Transfers are the best bet, your bank does not show the transfer of funds you don't deliver the goods that simple, next bet would be money order and/or cashier checks. Never take personal check as those can bounce pretty easy [even large companies such as Dell will not deliver goods on personal or company checks until it clears]. CC are the worst of the worst only large companies that do many millions of dollars of sales can negotiate on lower rates [but even at Dell they get charged between 3-5% on every sale, which adds up over time on loss profit].

An easy way to think of it is as a waterfall though it is small.

Bank Wire Transfers
Company Checks
CC

CC are last as you the provider loose out the most. If the client is not willing to do a wire transfer ask Why. Say you prefer to do business transactions that way as it insures the best security for both parties [plus it gives you the provider the quickest insurance that you are actually getting paid a not getty screwed]. If they insist on using a Company Check make sure you tell them that they will not be able to get the finished product until it clears. If they use CC charge more to cover the cost that you have to pay the Credit Card company.

* I use to work for Dell Inc., so I know how their payment structure is hence the refrencing.

A Mejias
12-02-2003, 10:17 PM
Actually 5% is way too high! Typical CC cost is about 2.5-3.5% (depending on card type) plust $0.25 per transactions and a monthly fee of around $30-40. Many banks offer better rates at about the $30,000/month level. 2% or less is not uncommon at that level. (U.S. Dollars)

But charging a bit more for the convenience is not a bad idea. Though I think that on time payment should be rewarded and late payments should be discouraged with penalties.

Yes, wire transfer is very good too. And I don't think you can reverse the charge after the transaction is complete. I may start using it myself. :)

riki
12-03-2003, 03:52 AM
I don't care how they pay, just as long as I get paid.