I stated a thread on here a while ago about the fixed fee of a client of mine and how I had underestimated the amount of work involved.
Well, a few months ago I asked for an increase explaining why and the amount of work I did for them etc etc, I even gave them 2 months notice of the fee increase. But even though they agreed to the increase and signed the amended engagement letter they are still paying me the old rate. I had already emailed them the first month they did this with a copy of the invoice reminding them of the new fee but they are still paying me the old rate. What do I do?? Any suggestions?
Did you under estimate it by much?? Perhaps he just hasn't got round to changing his Direct debit (if he pays this way)?
Send him a statement as well as the new invoice with the amounts that are left outstanding, maybe he has just put it to one side and forgotten about it?
What was his response when you explained/asked why he had paid you the wrong amount? I find it odd that people often do not respond or do the latest 'yes, but no'/ might be worth phoning him again and asking the same question - or better still do it in person.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I have done all the above, phoned, emailed, re sent the invoice and even popped into see them. The answer was they would get round to it. I increased their fee by £20 a month. This was to cover chasing their suppliers, printing off invoices and because when I engaged them I was told they only had 4 invoices a month. Being naïve and not long started up I took their word for it. And because they keep me waiting 30 minutes every month when I go to pick up a months paperwork (even if I email them the morning I go in to say I am on my way.)
So apart from telling him to ...well you know the answer , basically I can't do anything...apart from forward his invoices back to him and ask him to print them...which he wont.
Hi Georgie
Gosh you arent even asking for the world are you, so I understand your frustration. My Dad gave me a good trick - when you do a statement as Amanda suggests, then edge it in thick black lines. Its quite a shock when you open it and draws attention to it - Ive only used it once and it worked. Also send the statement weekly.
Do not print off anything - just save them to your PC and label them well so you can find them and key them without having the paper version. Michelle from Fox Accounting had a great way of labelling them but I cant find the thread just now (was only thinking of it yesterday for using on one of my clients who seems to insist on scanning everything!)
Also, depending on how much they are behind, then advise you cant chase their clients until they have paid the remainder of their bill, although if you do that I guess he might take it as you telling him to do-one'.
Maybe also add to their invoice - 30 minutes waiting time at xx per hour.....even if you dont intend ultimately expecting payment for it, as it might make them stop and think. I use the term 'my time is money - just as much as yours is, so lets both work to keeping this bill down'!!!
Good luck with it
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I'd phone him up to remind him of the problem and that, in order to prevent matters getting out of hand, you will have to start charging interest on the unpaid amounts once the due date for payment has passed, as the law entitles you to do (quote the Late Payment of Commercial Debts (Interest) Act). Apologise for the necessity to take this step, but point out his custom provides an important part of your income and you cannot afford for him not to pay it. Follow it up with a letter.
If your terms of engagement include a provision for charging late interest, then you must adhere to that, If not, you can charge interest at the Bank of England's Bank Rate as at Dec 31st or June 30th plus 8% - that's 8 1/2 % at the moment, and you can charge as soon as the money is late - again, see your engagement letter. Otherwise, it's 30 days from invoice date.
Send an invoice for the accrued interest once you have warned him it is coming.
Scope creep is one of the biggest issues, if not the biggest issue with fixed fee work. It's one reason that letters of engagement need to be really tight on the expectations of both parties.
This is also a good reason for using a direct debit rather than a standing order or just invoicing the client. That said, you are where you are. As others have said, the late payment of commercial debts legislation is good. I've only used it once and it was on a client I was going to get rid of anyway. The chances are when you add fees they will leave and you may have a bigger battle on your hands to recover your money.
You could start using the payments to pay off your older invoices rather than just assigning the £20 less to each invoice. This will probably leave you with one or two unpaid invoices. You can then stop working until these are paid. Or just sack the client. This can often be an inconvenience for the client depending on what else they have going on, but only if you initiate it quickly.
The bottom line is that a client who doesn't pay for their work is worse than having no client at all.
Just dont do anything further until they pay up to date.
I have a couple of clients that should be paying by monthly standing order but havent for a number of months so not going to do any work for them until old payments are up to date.
Though I work slightly different in that most of my clients pay by monthly standing order before the year end so for these that havent paid I havent done any work yet for them other than issue the engagment letters.
I did think of doing that but I can't really as they are still paying me (albeit the old fee) . They know they should be paying the increase and I was even told in an email that they would do it. The thing is how ever I look at it they have got me over a barrel. As I see it I either shut up and put up or tell them to find someone else....and there is plenty who would do the work for less than I am.
