The woes of being an independent contractor

[Drakkon]

So i did some work for a fairly large company...one that i truly doubt would default on payment (they are a fortune 500 company), but it has been a MONTH now since I sent an invoice and i still haven't received a check. They gave me some excuse about how my w9 was on a persons desk and apparently she was on vacation but the person that picked it up couldn't read it.

Now they want some more work to be done and which would cost them a fair amount but I'm of the mindset that if you haven't paid me for a previous job there is no way I'm going to take on another job from you.

Is this crazy of me not to take on the new work while a check is in limbo? they are acting like it is....

 

[BigJ]

If you do take the work, Document Document Document. Document all meetings with the people you're doing work for. Document all discussions you have while doing your work. Document every damn thing you do.

In the off chance they do try to stiff you, at the very least you'll have the documentation for court to get paid for the 2nd set of work.

 

[Descartes]

What are the terms on the invoice? Most of the companies we work with are net 30, so a month is fully expected. If they're a fortune 500, can you imagine how many invoices are sitting in accounts payable? They can't just turn it around in a few days.

So, yes, imo, it is crazy not to take on more work. Corp-to-corp agreements, even for independents, are there so both parties know what to expect. Being independent means you don't get a paycheck regularly like everyone else.

 

[Yossarian]

yeah take it. you'll get paid, big companies are notoriously slow to pay vendors. I know mine is.

 

[D1gger]

That is the way many large companies are. They have such huge administration departments it takes forever to generate a cheque.

 

[Drakkon]

Net 30 is the term. Invoice sent 8/6. Previously this company would pay in 15-30 days no problem. I've never had to enforce it before though so not sure what the standard protocol is there. Its not so much about the time its taking its more the taking on more work without having gotten paid for another project. The precedent would be set and I'm not sure I'd want to set it.

 

[MrWizzard]

I wouldn?t be too worried if I were you. I work at a small company and it can take that long at the shortest 2 weeks. If you take into account when you do the work, when you send the bill, processing time on their part, and the fact that they may only cut checks for bills 1x a month. Factor in that that person is on vacation also and it makes sense.

Oh but just in-case do document everything.

 

[boomerang]

Stick to your guns. Don't perform any more work for them.

Make sure they know why.

I think your thinking on this is spot-on.

 

[kranky]

The bigger the company, the slower they pay. I'd continue. If they do continue to stiff you, you'll actually have more leverage by being part-way through another pile of work. At some point, you can say "It's been two months, and I need to have my last invoice paid by next Friday or I'm not going to be able to continue on this project."

I'd say that 90% of Fortune 500 companies would not have paid an invoice to a new vendor within a month.

 

[Greenman]

You would be a fool to walk away from a client over a late payment. I see people in my business make a huge issue out of a few dollars and end up alienating a client worth tens of thousands in future business. Ask yourself how much they are worth to you in future business, then decide how tough you want to be.

 

[MisterJackson]

I gaurantee if you turn down more work you won't be getting a second check. How does that sound?

 

[EagleKeeper]

Contact the person that signed off on the invoice.

Then contact the payments department.

If you feel comfortable with the company, continue to accept work.

Put a clause in the invoice that payments after the due date are assessed a 10% late penalty.

This has worked for me.

You do not have to exercise the penalty, but having it there indicates that you do expect a professional financial handling of your invoices.

 

[dud]

Balance the need/desire to get paid for the first job against the risk/probability of losing the second one if you enfore the "Net 30" clause. Also consider the risk of losing all future work with this company.

 

[SaoFeng]

Originally posted by: EagleKeeper
Contact the person that signed off on the invoice.

Then contact the payments department.

If you feel comfortable with the company, continue to accept work.

Put a clause in the invoice that payments after the due date are assessed a 10% late penalty.

This has worked for me.

You do not have to exercise the penalty, but having it there indicates that you do expect a professional financial handling of your invoices.

best advice here!

 

[Darwin333]

Originally posted by: Drakkon


Is this crazy of me not to take on the new work while a check is in limbo? they are acting like it is....

If it is a fortune 500 company then you will get paid. I wouldn't want to lose a customer over a single (or even a few) late payments and refusing to take on new work because you have an invoice thats a few days late in getting paid is a good way to lose a customer.

If you want to be paid fast here is a tip from one contractor to another. On your invoice offer a 1-2% discount for payment within 10 days. Companies, especially large companies, almost always take the discounts regardless of how small they are.

 

[AgaBoogaBoo]

Over $500 - get a formal agreement made

 

[440sixpack]

I've become (somewhat) used to getting paid in 60 or 90 days by one of our clients. Fact of life when you're on the smaller end of the relationship.