Web designers, what are your payment terms?

Mike_Eile · 11-10-2011 6:07pm #1

I'm just looking at my accounts and I've 6 invoices outstanding. So I tried to make contact with each of the clients:

Client 1 - Called, no answer, left voicemail, no response, just sent text. Got response saying he'll call me later.
Client 2 - Seems to be abroad a lot, sent invoice a month ago and several reminders since, some without acknowledgement. He emailed me this morning saying he forgot to pay invoice and it'll be Friday next before he manages to pay.
Client 3 - I have a monthly maintenance fee, due on 10th of each month. Invoice often not paid until end of the month. Lots of excuses.
Client 4 - Sent invoice 10 days ago. Sent reminder yesterday and got a response saying "don't know what you need from me". I couldn't have been clearer with the invoice and email. Payment due tomorrow.
Client 5 - Invoice sent in July and a 2nd invoice was issued 3 weeks ago. No sign of payment. Lots of emails, texts and excuses but no money forthcoming.
Client 6 - Invoice sent 3 weeks ago. Promises, promises and more promises but no money. Have been told I will receive in the next few days.

So folks, what am I doing wrong? Am I too nice. Am I being too impatient. What payment terms do you have with your clients? Should I say to clients that no website is going live until payment comes through in full?

matt-dublin · 11-10-2011 7:30pm

a lot of business won't pay for 30-90 days, it all depends on what your contract states vs their payment policies.

for example, we don't pay our invoices until 30 days (usually 20 mind you) to allow for standard accounting practices and internal audit policies

but given the current climate, youll probably find that business don't have the cashflow to pay any more.

my suggestion would be after 30 days send a 10 day notice of termination of services, at which point replace their websites with a holding page stating account suspended, usually returns payment pretty quick smart.

Pixelcraft · 11-10-2011 9:55pm

Smaller Projects 50% deposit with remaining 50% due on completion
Larger Projects 30% Deposit with payment milestones.
established agencies/in-house work, credit providing it's not dragged on for months

Just be upfront at the start what you expect so there's no surprises

i71jskz5xu42pb · 11-10-2011 9:59pm

Mike_Eile wrote: »

Should I say to clients that no website is going live until payment comes through in full?

If not payment in full (and you might want that for some customers) you should definitely have partial payment (60-70%) and an acceptance of the final invoice before go live.

GG66 · 11-10-2011 10:06pm

I suggest:

30% minimum deposit
30% on approval of design (or other agreed milestone)
Remainder 30 days after site live at which point client is fully satisfied & ownership is transferred.

A few other things I've learned over the years:

If anyone hesitates to provide a deposit, walk away. They're a non payer.

I don't advise taking the site down if payment is delayed, bad for the relationship and complicates getting paid as you have nothing "live" to get paid for (if you know what I mean).

If you have clients on a monthly retainer, I recommend payment per month in advance so you're always ahead.

If payment has dragged out past 90 days (or whatever threshold you decide), send a solicitors letter. I've met some operators who won't pay unless they get one.

Bear in mind, you're legally entitled to charge interest after 30 days non payment but be careful this doesn't annoy regular clients. Include this in your invoice and payment terms, you can always offer to drop it later on if they issue prompt payment.

Collumbo · 12-10-2011 11:34am

I can relate to the OP. I did a small bit of freelance development (not always web) and sometimes had difficulty getting paid. Sometimes payment was on time. One job worth a few quid has so far gone completely unpaid after 1 year, even though I was led to believe it was urgent when I started it, so I expected a quick turn-around [the job was found through boards.ie but I won't bitch about it here]. Looking back I should have demanded at least a 30% start-off fee - very foolish of me. I should have seen a comment like this first:

If anyone hesitates to provide a deposit, walk away. They're a non payer.

This is most likely true.

tricky D · 12-10-2011 12:47pm

Nothing gets started until deposit is paid. 50% for regular jobs, down to 25% for bigger ones or with trusted clients (who often just fork out the 50% anyway).

Use of proposal ideas deemed as acceptance. (grey area)

Methods for protecting work until full payment.

30 day payment, 10 day grace, then interest.

Never been stiffed yet, but have walked away twice from deposit shy/hesitant parties. That instinct proved very correct for one of them and the other ended up with a cowboy job, so bullets dodged imo.

John_Mc · 12-10-2011 12:53pm

Pixelcraft wrote: »

Smaller Projects 50% deposit with remaining 50% due on completion
Larger Projects 30% Deposit with payment milestones.
established agencies/in-house work, credit providing it's not dragged on for months

Just be upfront at the start what you expect so there's no surprises

+1

Stress that website won't go live until remaining balance due is paid.

Trojan · 12-10-2011 2:33pm

Smaller Projects 50% deposit with remaining 50% due on completion
Larger Projects 30% Deposit with payment milestones.

My contracts say payment within 7 days of invoice with 2% per month penalty but I haven't used that clause.

Some small jobs I've done 100% on delivery, and often been burned.

business bloomer · 12-10-2011 3:40pm

So far, 0% deposit as I met the client and analysed his/her business in advance

If I trust, no deposit, they will pay. If you do a good job, they'll pay straight away!

Trojan · 13-10-2011 12:56am

business bloomer wrote: »

If you do a good job, they'll pay straight away!

Sadly not always the case.

anbrutog · 17-10-2011 8:16pm

50% upfront.
35% payable on site completion ( when viewable from my staging server )
15% payable within 10 days of when site goes live.
All stipulated in a watertight contract. I've learned the hard way to be very ruthless.

If the 15% isnt paid within 10 days , site comes down and is replaced with a nice little page outlining exactly why they dont have a website anymore.
( this potential course of action is also outlined in explicit terms in the contract )

In the last 18 months all but one client has paid me on time. We're somewhat lucky that in this game we can cut people off if they don't pay up.

anbrutog · 17-10-2011 8:18pm

business bloomer wrote: »

So far, 0% deposit as I met the client and analysed his/her business in advance If I trust, no deposit, they will pay. If you do a good job, they'll pay straight away!

Never , ever ( under any circumstances , even if dealing with a friend or someone who you think you can trust ) work without a deposit. Ever. In fact I'd say people who you know are usually worse.

DashCams.ie · 18-10-2011 1:34pm

50% before and 50% on completion. I always make this policy known with new clients and also the fact that I was done out of money before.

Sometimes I take no deposit. If you are sure you can judge someone and whether or not they will leave you stuck then makes a decision based on that.

Mike_Eile · 20-10-2011 7:43pm

Thanks for the feedback guys. The majority of you have strict payment terms in place and that's something that I have to start enforcing from here on. Some very interesting points made, especially in relation to non-payers of deposits. Will keep an eye out for that. Thanks again.

anbrutog · 20-10-2011 10:09pm

Mike_Eile wrote: »

Thanks for the feedback guys. The majority of you have strict payment terms in place and that's something that I have to start enforcing from here on. Some very interesting points made, especially in relation to non-payers of deposits. Will keep an eye out for that. Thanks again.

Its tough out there, and most people given an inch will take the proverbial mile , its one thing Ive learned the hard way. You can be the best designer/developer in the world , but if your business skills arent up to scratch , you'll quickly find yourself on the street. Remember , that clients aren't your friends , and always treat them as such. Be polite , friendly and professional of course , but never friends!

niallweb1 · 24-10-2014 1:56am

Mike_Eile wrote: »

I'm just looking at my accounts and I've 6 invoices outstanding. So I tried to make contact with each of the clients:

Client 1 - Called, no answer, left voicemail, no response, just sent text. Got response saying he'll call me later.
Client 2 - Seems to be abroad a lot, sent invoice a month ago and several reminders since, some without acknowledgement. He emailed me this morning saying he forgot to pay invoice and it'll be Friday next before he manages to pay.
Client 3 - I have a monthly maintenance fee, due on 10th of each month. Invoice often not paid until end of the month. Lots of excuses.
Client 4 - Sent invoice 10 days ago. Sent reminder yesterday and got a response saying "don't know what you need from me". I couldn't have been clearer with the invoice and email. Payment due tomorrow.
Client 5 - Invoice sent in July and a 2nd invoice was issued 3 weeks ago. No sign of payment. Lots of emails, texts and excuses but no money forthcoming.
Client 6 - Invoice sent 3 weeks ago. Promises, promises and more promises but no money. Have been told I will receive in the next few days.

So folks, what am I doing wrong? Am I too nice. Am I being too impatient. What payment terms do you have with your clients? Should I say to clients that no website is going live until payment comes through in full?

50% deposit before starting and full payment when site goes live if no payment coming through remove site just put up under maintenance sign that'll hopefully bring in payment

designbydan · 24-10-2014 2:06am

50% deposit
25% when half way through,
Final 25% when finished
At the very worst if they don't pay when I'm half way done at least I got paid for doing that part already.

I don't work at all unless being paid first.

That may sound very lazy or I guess stuck up, But I've worked too many jobs that ended up being less than 1 quid an hour.

Also I outline stuff like any photoshop work being done as an extra hourly rate (although a cheaper one) as I outsource that to another designer who's better than me at that (I gain no profit myself from it when outsourced.)

Same for video work, I'll shoot and edit stuff for you, but at different rates to when I'm doing web design.

The Corinthian · 24-10-2014 10:02am

I've not done much Web dev in a few years, but as with any project work I generally have followed the following procedure.

All assets, code and materials remain my property until full payment for the original contract is made.
30 days credit.
Projects worth under 1,000 Euro - payment on delivery of specification (note that this is often, although not always, before deployment).
Projects worth over 1,000 Euro - two models; 50% on signing of contracts, 50% on delivery of specification (pre-deployment). Second model is 40% on signing of contracts, 40% on delivery of specification (pre-deployment) and 20% on completion of a three month debug grace period (any bug reported thereafter is considered a change request).

Always minimize your exposure on your last payment, as this is typically where they will screw you - as long as they still need you, they'll continue paying. Retaining ownership of what you build until payment also makes it easier to pursue than simple debt collection. Consultancy, especially ongoing consultancy, I would deal with differently.

As others have suggested, I do think that you realistically need to offer 30 days credit at least, so you are perhaps a tad impatient.

Graham · 24-10-2014 3:44pm

I'd be seriously concerned for the OP if he was still waiting for payment of the original 6 invoices. :eek:

Web designers, what are your payment terms?

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