Websites take time to develop.
Especially custom websites that integrate clean design with intuitive web functionality. So, not something like this. And as much as clients would love, and actually expect in some cases, for us to push the magic ‘make website NOW’ button, it’s quite obviously unrealistic. Obvious to people who have even a bare minimum understanding as to how the Internet works. Sadly, however, many clients mistakenly think that developing a website takes about as much time and skill as replacing a shower head.
Of course, this doesn’t stop some eager beaver clients to request that their precious website be completed by week’s end. Sometimes this is because the website is supposed to coincide with a particular event or product launch. Then sometimes they request a lickity split website for pure arbitrary reasons such as ‘our website’s out of date’ or the always fun and frivolous ‘we need a web presence’. A web presence to do what exactly? - Often, they don’t have the first clue.
In general, we understand the need to get a website up in a timely manner, especially when you are selling goods or services via e-commerce. We, in turn, hope that clients understand that we need to charge for our professional services. You know, so we can buy food and live in a climate-controlled dwelling and such.
So, having said that, it becomes frustrating and borderline insulting, when after the month or more that it takes to properly complete the average robust site, we start to get the run around when it comes time to pay for the beautifully crafted website that the client now enjoys. I’m not sure if our payment terms are stern enough (note: they’re not!) but one thing I am sure of is that every client is fully aware of our payment terms and how we go about invoicing projects throughout the development process. Contracts are signed, payment terms are explained in detail and a deposit is taken well before any work begins. And yet still, we run into payment issues.
Let me take even more of your viewing time, gentle reader, by explaining a simple something that just about every service/retail business is keenly aware of. Something that haunts the dreams of the small business owner. Something that businesses need in order to survive without accruing a mountain of debt. This important term is comprised of two words. Ready for it? Are you really ready for this knowledge that I’m about to break off? Here it is: CASH. FLOW.
Cash Flow is defined as follows (courtesy of investopedia .com) - The amount of cash a company generates and uses during a period, calculated by adding non-cash charges (such as depreciation) to the net income after taxes. Cash flow can be used as an indication of a company’s financial strength.
I bolded that last sentence as our financial strength is what’s at stake when XYZ, Inc. with 10 million in annual revenue decides they’d rather not pay us what they contracted for, and instead nickel and dime us for months until they feel good and ready to send us a check (followed with the predictable whining about the late fee).
In order to pay our talented programmers/web designers/illustrators/accounting superstars, we need steady cash flow to remain financially ‘strong’. In addition to payroll, we also need to be able to pay the office rent, the utility bills, the copious amount of taxes the government hurls towards us, and other expenses that I’m not thinking about at the moment. Thus, to function as a business we need to have numerical digits flowing into our online account.
I realize this is a bit of a rant, but I sometimes struggle as to why certain clients feel as if they can dictate exactly when and how they pay us, regardless of how late it is, when it was laid out in the very beginning how this service transaction is supposed to transpire. The one or two times when I actually did tack on a late fee for being so overtly overdue, the client had the chutzpah to request that I take it off. It’s ridiculous. It’s especially nauseating knowing that many of the worst late payment offenders are companies that have a substantial amount of resources from which to pay the bill (see XYZ, Inc. mentioned above).
These late payment issues (and no payment issues in some cases) seem to be an industry wide problem. Beyond revising our payment policy to include “wild rabid dogs with a taste for human flesh will be dropped off on your front door if payment is not received on time”, we’ve taken other, less extreme, steps to try and mitigate some of these late payment practices. Hopefully these changes will gently nudge clients towards paying on time for our services, and not when their shaky real estate deal goes through.
6 comments so far.
I once made a “Code control panel NOW” button, but I lost it when I clicked the “Design efficient database” button.
Also, that background gave me aneurysm . . . and a stroke.
I could imagine that not getting paid in a timely manner could be really harmful to a small business.
Out of curiosity,
- What’s your late fee like?
- Is it a one time fee or does the go up as time goes by?
Maybe you should start asking clients before the contract is signed: “On a scale of 1 to 10, 10 being the most likely, how likely is it that you are going to pay us on time?” And if they answer anything below a 10, then just walk away. heh
Also maybe ask for a larger percentage than you currently do up front. If they even flinch, then you know they’re more concerned about money than value, and you can just walk then too.
I don’t mean to be a jerk, or sound like I’m saying the problem is all with you guys.. but, I dunno, just thinking aloud. If you start to have a lot of problems like this then probably either (a) God has a personal vendetta against your firm or (b) you’re not screening your clients well enough.
Well, to start, our late fee is 10% of the total project each month the payment is late.
We’ve been better at qualifying clients during the initial meeting to see whether or not they seem to have a basic knowledge of what it takes to build the kind of site that they’re looking for. We haven’t done the ‘between 1 and 10′ thing yet, but we’ve tried as best as we can to pick up on where they stand with everything.
Depending on the client and/or project, we have asked for a larger percentage up front and will continue to do so in the future if need be.
Trust me, it’s a tough balance between trying to be professional and courteous and then having to become a debt collector. I think we’re doing far better at screening clients, but no amount of screening can prevent the occasional shyster from attempting the ol’ screw-the-little-guy tactic of arbitrarily deciding to not pay for the many hours we’ve spent on their project.
Fortunately, there are methods to effectively retaliate when Johnny Cheapskate tries to skirt payment, although this rarely results in making up for the time lost on the project.
I don’t think God hates us…we’re too well connected with Harvest
Sounds like you guys are doing a great job of communicating to your clients. It sucks that there’s always that minority of people who think they should take advantage of people, and I wish you guys luck in the future.
PS - being connected to Harvest isn’t necessarily a good thing as far as being connected to God hahaha jk
Yeah, we’re doing a lot better now, and being more discriminate with whom we do website work for. But thanks for your comments and the well wishings:)
And in any case, I’d like to think that God wants us to succeed and move to a place where clients appreciate all the hard work that goes into web development.
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