Pay before release
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- MakeBelieve
Working with another design agency who haven't paid the 50% on start of project and want website to go live without paying for full (final) invoice.
They argue that they have never heard of paying for a project without releasing launch of site first. I told them its a common procedure for many companies and individuals.
I know some folks do release work before final payment, in-fact we do it most of the time with people we trust, but this time, they haven't even paid the 50% to begin the project - should I make the site site live?
They say they are waiting on client to pay first!!! Who takes on a project and then sub-contracts it and doesn't get an upfront payment? Also the contract isn't between me and their client, it is between me and them, right?
What official creative industry papers could I use as reference when it comes to showing that paying for release is the norm...?
- MakeBelieve0
Note, we only continued the project while expecting first 50% invoice to come through any minute. As the client is very reputable and I know the design agency cannot let their client down.
- If it's important to them, they should pay first. I would hold out for at least the first 50%.spot13
- whatthefunk0
your official creative industry paper should be your signed contract with the agency detailing the terms of the deposit and full payment schedule - do you have one of these?
- What I want to show them is that it isn't the norm to hand over files without payment, hence any references.MakeBelieve
- MakeBelieve0
My mistake was to not get a contract signed, but them agree to the initial terms and conditions that went with the quote.
- I think the initial terms they did agree to are valid, even if it isn't signed, right?MakeBelieve
- nope, you need something with a signature for sure!spot13
- Lillebo0
Any decent and serious agency/company always have some pool/cashflow to cover such scenarios. If their client refuse to pay it's their problem, not yours. Demand payment before launch.
- Thelonious_Funk0
you gotta play it by ear... but if they havent payed even the 50% yet.... than getting the full 100% is prob not going to be as easy as you would think.
I for one have been burnt too many times by releasing work early... as a matter of fact i can think of 2 projects that still have an outstanding balance.. (been years now)
- Without a contract, the launch is the only thing he can use to ensure payment at this point...Lillebo
- MakeBelieve0
When I was left cold by a client for several months, I paid my freelancers off as and when they invoiced, I would never want to be in debt to anyone and the agreement is always with me and the sub-contractor, not them and my client.
- trooperbill0
what if their client drags their feet...will u get paid this year?
get payment now dude.
- I would have been happy to go live at 50% pay, but now I am not sure if I can wait.MakeBelieve
- vaxorcist0
you could keep the passwords, and control the domain, then, if they don't pay, upload something very entertaining....
- thebottlerocket0
Launch is a red-herring really. The major issue is that you've not been paid for the first 50%, and perhaps it should have been made an issue before it go so late to launch.
As others have mentioned, their 'payment' from the client is also no concern of yours. Your cash flow is yours and theirs is theirs and and as a business, you shouldn't be putting yourself in a position where you are being forced to manage clients debtors.
The biggest problem is the fact you've used a 50/50 split which is placing you in an awkward position. Ideally, up until launch, you would have staged the project with more intervals so that you would have had around 70-90% of the fees already paid. That way, if they do decide to dispute the invoice or cry poor because 'the client hasn't paid them (as if that is EVER your issue) you're own cash flow isnt hit.
Persoanll, I would avoid talking about lauch now and would be just focusing on where the 50% first stage fee is?
- +1pillhead
- Yes, I was chasing them on 50% all the way throughout, but every time they said they will sort it. Till it came to this stage.MakeBelieve
- Then I we ran out of time, no more 50%, they owe 100% now.MakeBelieve
- Because it was a small project, didn't feel it warranted a staggered payment model, but maybe we should have enforced it.MakeBelieve
- mnmlst0
You can launch the site without turning over the source files, especially if it's flash. One of the beauties of web vs print.
- Its not flash, but we can always hold back the code or keep a script to disable it easily, but won't do that.MakeBelieve
- maikel0
Play their game:
say that you will launch the site, and at the very last minute 'one of your company directors' will block the release of the site until it is fully paid, and there is nothing you can do about it.
I'm sure your T&C say that your delivery depends of full payment so they will be forced to pay to avoid an embarrassing situation with their client.
Some people only learn the hard way.
- thebottlerocket0
Small job or not, the real issue is exposure. Exposing you business to a potentially massive bad debt or not.
You're right in that small projects don't warrant complex stages and invoicing procedures. The main reason being that your exposure to bad debts is so much more reduced on smaller jobs. Ideally, you should be able to weather a certain amount of slow payers. But that is not to say you go easy, because lack of debtor management is a key killer of small businesses.
As we're not talking exact figures here, only you can guage how much an exposure this is and if you should structure how you charge next time.
But bear in mind, personally I wold be doing two things, I would be making sure the 50% issue is resolved first and secondly, I would be making sure I am getting in emails now, confimration that they are happy with the work you have done.
The reason for doing this is that you need to show that their lack of payment is not due to them being unhappy with the work. If they are happy, and the site is launched, they have very little recourse.
Also, remind them, that the initial 50% is now accruing interest, hopefully in your contracts you have placed a clause that reads something like 'current base rate plus 5%' or something like that.
Good luck. bear in mind, annoying as they are, they are not the enemy yet and a good result for you is to be paid, fully and not have burnt any bridges.
- Thanks, great advice. I think I will do those steps.MakeBelieve
- 23kon0
tell them you will do the full release on the terms that you place an automated banner that will appear across their site within 21 days if they have not paid that states that they have not paid.
:)
- gramme0
How long have you been waiting for the 50% up front fee? I could understand a couple weeks, maybe even a little over a month for companies who pay net 30.