Advice on how to get an invoice paid

I did contract work for a company back in January and I’ve been having problems with them paying me. I sent emails, phone calls and all I get is no replies. They sent me a letter saying the company is facing financial problems and is restructuring and will work out a payment plan. They owe me just under 1K but I don’t work for free and I want to get paid for my hard work. Does anyone know the best way to get paid from a company like this?

Consider Small Claims Court if all else fails.
Sue for interest too.
Do this before they go and file for bankruptcy protection cause if that happens you may as well forget about it.

I’ve stopped letting people owe me. I spent countless hours trying to get paid in my younger years.
Now I take payment before handing over the key work cause there are too many deadbeats.

Take an advance / deposit before doing any work and deliver the finished work COD terms where you get the remaining balance prior to delivery of the key items like CAD files, etc.

Once they get the work they have no incentive to pay you so make them pay you to get the work they need.
No dough, no CAD files. No ifs ands or buts.

Also make a clause in your contract that says they don’t own the intellectual property until payment is made in full. This way you can scare them by saying they don’t own the rights to the work. You can sue them if they make and sell it down the road when the money involved is huge. =) That’ll make them think twice about ripping you off.

Good luck, protect youself, and don’t get bullied.

I have only had to resort to Small Claims Court once; and that was as a last resort to be paid. And just because the court says you won, does not mean you are going to be paid. That is your responsibility. The court can not force them to pay you, and local law enforcement agencies can not force them to pay you. And if the company (or individual) has no money you will never get paid anyway.

The amount owed me was $2,500 and it took more time, energy, and filing fees (etc.) to learn, and go through the process than that. But I did it anyway, because 1) they had a financial obligation to pay me, and 2) it was the principle of the thing. If you ask me to do something for you with the understanding that you will pay for my services, then you damned well better pay me.

It was an education. The client company had recently taken on a new CEO who felt that his predecessor’s direction was incorrect, and that anything associated with it (including the work I did for them) was no longer valid, and hence “worthless”. Big company guy (with an ego to match), little designer; screw him, we’re not paying, blow him off.

Short story long; I won the initial claim (they didn’t even show up at court). Sixty days, almost to the hour, I received a notice of Appeal (they were legally countering my claim) which required a 60 review period. 60 days later they again failed to appear, claiming that a family crisis prevented the company’s representative from making the court appearance. Another thirty day delay to reschedule a hearing. blah, blah, blah… They pulled this delaying tactic three times.

In Small Claims Court (in California) you are not allowed the representation of an attorney. This is supposed to level the playing field for the little guy. But there is no restriction on a company official who has an LLD but just happens to be the Marketing Manager (as was the case with my client) and is not paid for his legal services. He wasn’t “legally” representing the company in court, but he sure as hell knew how to delay the process, and did; all the way up to the Superior Court level. The Judge, reviewing the case brief during the morning pre-trial hearing (there’s a term for that, but I’ve forgotten it) became aware of the client-representative’s professional status, and his tactics, and essentially “suggested”, in no uncertain terms, that the plaintiff get together with me and settle this before we got together again with him in the afternoon. It was a waste of Superior Court’s time on what was supposed to be a Small Claims case. I settled for $1,500

So it comes down to: 1) do you have the time and financial ability to proceed with this “educational process” 2) is your time to learn this process worth the $1,000 owed you 3) do you have the “courage of your convictions” to proceed against this company 4) can you, after all of this, afford to never see a cent owed you?

Or, is it worth more to take mp’s advice and learn how to minimize your future risks by this kind of behavior.

It’s personal call. And personally, I hate to be taken advantage of; it cost my “client” more to carry on with their legal shenanigans than the $2,500 they owed me.

There’s my $.02USD

Depending on the size of the company, go down there and knock on some doors. It sounds like they aren’t coming back to you, so just go and sit there until someone gets a check out.

thats about a 2.5 hour drive.

Kinda like Lew said…you have to decide how much you want the money.

thats about a 2.5 hour drive.

Which is (your hourly rate) x 2.5 (if that is round-trip) … or (your hourly rate) x 5 (if it’s one-way)

Aubz, sometimes ya gotta foldem’ and take a loss. Except that it isn’t really a loss, at least not a total loss; there’s big educational value here (even if you can’t eat it, wear it, or sleep under it).

But keep calling, and conduct a parallel letter campaign (it’s cheaper than driving) to XYZ requesting that they pay you; by doing so you are showing “due diligence” in attempting to collect the debt. To acknowledge receipt by the XYZ, send these letters Certified Mail. For your collection effort documentation, each “new” invoice to them should denote how many days overdue the account is and have “interest due” added to the original amount. If it comes to Small Claims court you have documents in hand.

Additionally you can contact any other companies that you know XYZ does business with. You can not, and should not, openly slander them, but you can legitimately, as one company officer (you) to another, inquire if they are also having a difficult time collecting from XYZ. If they are, conducting business with these other companies may become more difficult for XYZ if others become concerned about getting paid as well. And even if they are not, they will view XYZ in a totally different light.

During the months leading up to my decision to go to small claims court, the client corporation kept telling me that, “We just don’t have the funding available to pay you right now.”

. They were not aware that through their bank, using their account number (on a previous check), I could “verify” funds available for a check (an imaginary check); I would type in an amount, see if funds were available; type in a higher amount, see if funds were available; and repeat the process until “insufficient funds” were available. By doing so I was able to determine that they had over $65,000 in their checking account, and used this information one morning when I stopped by to see if they could cut me a check, even for a portion of the $2,500 they owed me. The CEO told me, “No, we’re still short.” Then I told him how much he had available to cover my, now six month old, obligation. BIG EYES! But I still left his office with no check in hand… AHs!

Finally (and you have to decide when “finally” is), if all of your efforts to secure payment fail, you should consider turning them over to a Collection Agency (and communicate that to XYZ that in your final correspondence*). Be advised that $1,ooo is small change to these agencies and they take a healthy cut … but for inducing shear corporate annoyance it might be worth investigating. No one wants their credit rating affected in this financial climate; and to do so for a “mere” $1K indicates irresponsibility on the part of XYZ’s management.

***** something along the lines of:

Dear XYZ,

I regret to advise you that as a result of your failure to remit $x,xxx.xx, invoiced on xx/xx/2010, this account has been turned over to ABC Collection Services for further action.

Any communication regarding this matter should be directed Mr/Ms ZZZZZ of their organization.

Sincerely, Aubz


At this point, if XYZ miraculously finds the funds available to pay you, do not offer to accept anything less than full, and immediate, payment of the invoice (including the interest); you may still owe the collection agency a fee for taking on, and then canceling, the account. If they do offer to pay you, it indicates that they know you are serious about this decision, and that you intend to press the issue.

And if all of this fails, do not forget to keep accurate records (the original debt, interest due on the amount, and all associated costs expended in attempts to collect) so you can claim it as a legitimate business loss on your taxes next year.

Above all Aubz, keep it professional; even if they don’t. What goes around, comes around.

This might be real bad advice but worked twice in my freelancing days.

I simply spammed the emails of all known employees of the client’s company with the deadbeat story and repeated my requests for payment in email. I did it each day and wouldn’t stop. I kept going up the chain of command with these emails and Cc:'d all known employees and execs.

The hiring manager was so embarrassed cause this became the talk of the water cooler and everyone’s lunch time conversation that he called to get me to stop and offered to pay half. I refused the offer and kept at it until they coughed up the full amount.

Sometimes shining a light on the roach gets them to capitulate but do this at your own risk. Since I freelance, they can’t fire me and I don’t intend to work with them again. I used the court of public opinion and peer pressure.

After this stunt I thought I was done freelancing for them but suprisingly, others in the company eventually hired me again for gigs and that guy who tried to not pay me was eventually fired. I think what happened was the job I as hired for was really his job to do which is why he had no budget to pay me. I simply showed everyone what a lazy, unproductive flake he was at work.

Nowadays I take a deposit to start and prepayment of the balance prior to delivering any work so no more wasted time and frustration dealing with deadbeats. These types plan on conning you from the start so we have to put strict policies in place to prevent that. I no longer let people owe me money. I’d rather not take the job than to risk dealing with chasing down past due payments.

Wow, fantastic advice their Lmo. Thanks for taking the time to write that.

Call up your contact there, tell them you received the check and thank them for honoring your terms of service, then promptly tell them to have a nice day and hang up.

Revel in their frantic attempts to now contact you to find out how you were paid and who authorized it, hopefully all of that wasted time and re-looking over their books will cost them at least as much as what they owe you. Where you take it from there is up to you.


You may want to Keep an eye on this thread as well > book on business practices for industrial designers? - #8 by Lmo

really great posts/THX
I emailed a few key people at the company today and received an email and phone message from the owner saying they would pay but not a definite time. I’ll keep you all posted.

THAT is a fantastic story. The squeaky wheel gets the grease in that case!

That’s great. If it were me, I might be tempted to let them know that if they don’t pay for the work, they don’t own it. I’d give them a cut off date and say I’d be making the work I did public after that date since I would still own it.

this is actually a common practice. Put it in your terms.

Upon payment to OneOak Design, Inc. by Client of all Fees and Expenses, OneOak Design, Inc. hereby transfers and assigns to Client (when any such inventions are first reduced to practice or first fixed in a tangible medium, as applicable) all intellectual property rights owned by OneOak Design, Inc. in the Final Deliverables during OneOak Design, Inc.’s performance of the Services (“Assigned Rights”), when any such inventions are first reduced to practice or first fixed in a tangible medium, as applicable

That’s great. If it were me, I might be tempted to let them know that if they don’t pay for the work, they don’t own it. I’d give them a cut off date and say I’d be making the work I did public after that date since I would still own it.

“boom, roasted.” Michael Scott

I considered going to small claims, after 5 months of emails and phone calls with no reply.

Finally, I paid attention to who was on their board of directors. With a little bit of digging I found the email of the person representing their VC firm and sent him a very polite email explaining the situation, copying my contact at the company withholding my pay.

Two days later I received my payment!