If you’re stuck in the bureaucracy: escape it. Their rules aren’t serving you so why obey them? Escalate to their legal department, send a certified letter about your impending legal action against them. Enforce your contract.
However, some terms can help encourage payment on schedule. Early payment discounts encourage inexperienced AP to pay early. Late payment penalties signal highly strategized AP as to when the cost of not paying will intersect with their retained time value of money. If the person paying the bills is directly related to an owner, then despite whatever is in the contract it's usually a matter of figuring out how to help them do their job.
This sounds like a case of AP putting off payment because someone knows about time value of money and doesn't view their relationship with the vendor as having value they can lose. Establish due diligence to collect first, then: A letter written by an attorney to their legal team is cheap and usually an effective nudge. Asking a court to compell payment consumes little time and is not expensive, despite their latency courts are impatient and want you to not burn hundreds of legal hours over this. Selling the invoice to collections is a thing, it's not so large a sum to make that hard. But most of all, hire a competent trained accountant who has zero relationship to anyone with equity, and listen to them.
In theory we could sue for our money, but the imbalance of power between an enormous multinational company and our small agency makes that utterly nonviable.
Our mistake was made on the front end, when we didn't ensure the contract specified what to do if payment was late. Because of that, we simply have to wait out the bureaucracy.
The fact that your contract doesn’t contain anything about late payment is immaterial.
Have you even talked to a lawyer? You had clear contract terms, you delivered, they are in breach. That's the easiest case a lawyer has ever seen.
The real question is if it's worth suing, giving the lawyers a cut and pissing off the client, vs hoping they pay eventually.
There are statutes of limitations though, check those out. If you wait too long you might be totally out of luck.
> But it doesn’t matter, all we can do is sit here and keep waiting.
You don't need your contract to say "we'll escalate if you breach contract", that's already how contracts work. What are they waiting for?
edit: as you've said elsewhere - the goal of this isn't to take them to court, it's so whoever is waiting for whatever to cut the check can go to their boss and say "look, we really need to pay this now".
Just worked for six months for a client.
Contract is one month of monthly savings made in AWS bill.
They have not paid, and in fact terminated the contract early to avoid payment - "the savings do not occur until AWS reservations end, contract has been ended now, so savings have not occurred". The savings are going to occur, and then the client will keep those savings.
Turns out the contract also contains what looks like a poison pill, to prevent the counter-party (me) having recourse to court at all, no matter what the client does.
Also the entire contract is confidential, so I in theory can't say a word about any of it.
I would be talking to a lawyer. You might even consider it part of your job to have a working relationship with a lawyer.
The poison pill is unconscionable, and the action of termination is in bad faith.
Confidentiality is usually regarding public disclosure, it does not prevent your attorney and a judge from seeing it.
Thank you.
Send an email/letter to their legal department asking for help to resolve the matter, if they can call the PO department and resolve it, and say its been 6 months and they are in breach of contract. Be nice.
2. Sent a snail letter to the CEO. The CEO gets little post that isn’t outright spam. This gets read by an assistant and passed down the chain. Down the chain gives very large urgency. The assistant to the CEO doesn’t know anyone five steps down. So you are coming in like a champ.
Both tips would work in my firm. It’s what I’ve use once or twice to get proper service without lawyering up. The best response was when the premier customer oriented person (director of operations) of a very large firm called me to pretty much complain that the CEO tasked her with resolving my issue. I had to refrain from laughing. (It was a big problem for me but quite a delicate matter for them I explained in kind writing.) She was telling me how happy I should be that she called me. I told here thanks for calling but you should be happy this isn’t in the papers. End of kind call, start of solution.
You talk to your lawyer and send them something very strongly worded, and if they still don't pay you take them to court.
a) The internal project owner. Usually a VP or Director.
b) The owner's assistant/gatekeeper, who made sure they saw and signed documents.
c) The accounts payable person who actually pushed the button that cut the checks <- The most important one if you want to get paid on time.
I also never did more than Net-30 (and often Net-7). Things went smoothly with the larger companies (once everything was signed). Startups and medium-size ones, though, had no problem stiffing you on a bill if their funding was wobbly. Those were often payable on invoice, or upfront retainer.
Still got screwed multiple times. My own damn fault for taking on projects just because they sounded cool.
Yup. I've had such people at the Xmas-present/birthday-gift level too; sometimes I get paid out before even the utilities.
- $130k is a large amount, why would your contracts save such a huge payment until the end instead of spreading it out over the six months of the engagement?
- Is apsis really just doing nothing and waiting? I get the contract might not have a clause on late fees or whatever, but that doesn't stop them from paying a lawyer ~$200 to send a letter demanding payment. That should get any large company moving.
- How many contracts has apsis closed because this is a somewhat standard practice at large companies in the sense that they will take any float time they can get. I remember one company my dad worked with in construction would mail checks the slowest way possible just to get a week of float!
* Invoices were delivered semi-monthly on NET60 terms. The unpaid invoices (many of our invoices prior to these were paid) run from March to June. The first invoices lapsed into unpaid status in May, when we first raised the issue. Because we had prior paid invoices, we expected this to be a brief hiccup.
* The 6 months is how long its been since our final invoice and the end of the project --- not the term of the engagement.
* We have attempted plenty, and we continue to talk to their accounts payable team. In our estimation, involving legal professionals at this point would only exacerbate the problem, as it would rope in their legal department. For now, we consider waiting and being annoying to be our best option.
* Our standard MSA has a 2% penalty for every week past due. We rarely enforce this clause, as we tend to work with clients on long timelines. Establishing good rapport and trust with a client that we won't bring the hammer on a payment that is just a few days late helps us not only keep our current clients, but makes future referrals more likely.
Pumping the books and moving expenses to make the quarter appear good. Practices like this are unethical, should be illegal to hide it.
Wonder if legal action would get them to pay up faster. Contract is breached. Once legal gets the letter, then it gets escalated internally.
Companies like this tend to just pay up (especially when wrong) rather than spend 10X in lawyer billables fighting/arguing it in court and getting their reputation dragged through the mud (bad optics such as “multibillion dollar company is stiffing vendors, who’s next? Possible bad quarter?” Then automated traders recognize SELL signal and company stonk drops)
A) Business over a certain size have to contract some quota from small and medium business
B) That any and all payments should be made through this escrow
So if BigCorp doesn't pay the little guy, Little guy get's paid and the matter is between government and BigCorp.
It does matter. The payment is net-60 and it's been net-180. This goes well beyond reasonable error/omission into overt negligence.
If your client can't figure out how to do a wire transfer that's on them. It doesn't matter how big/small they are, if they're that incompetent, you're likely not the only vendor in this situation and they know it.
1) You've been in long-term structural breach on an objective brass-tacks issue. Immediately completely "out-source" this former client-vendor relationship to a 3rd party--likely a law firm.
2) Write off this engagement and those funds. Even if you win judgment, you'll still have to collect on it and the collection costs themselves can be exorbitant and years-long time-consuming.
3) If/When you file suit (but not before hand), publicly "out" this company in a single post linking the publicly available information about the lawsuit then shut-up about the entire affair until the jurisprudence has completed--likely over a year.
Good luck.
These always fail. Mostly because it’s pretty much impossible to define the various parameters but really because … if we want to get paid by a company larger than us we take the chance it will all work out … and gift people free credit for months
my longest time to collect on invoice was 9 months and it took me two years to recover from the debt tailspin that went into (if I ever did)
Good luck getting it to work out.
One day there will be the legal backup. It might make it socially unacceptable
Even without specific clauses there are legal remedies for breach of contract you just have to be willing/able to use them.
Don't be the guy that waits that long to get paid. Get a lawyer.
Don't be the guy who doesn't pay your bills.
