Thanks for your valuable feedback.
1. Pinpoint specific faults raised.
2. Recheck your performance delivery. Agree or disagree.
3. Agree -- discuss resolutions (Recheck contracted resolution processes)
4. Disagree -- Recheck contract on agreed service deliveries. (Discuss)
5. Reach resolution and decide: whether this is the client you want to have.
If no resolution can be found: (1) Arbitration - best. If not possible (2) Commence legal process. (Again, recheck your contract on conflicts resolution)
I would be firm but fair. If they have legitimate queries, I would ask them for a part-payment for the bit that is not in dispute.
If they find fault with it all, I can only assume they are stalling. You might ask them if they want a payment plan. If I knew a few more specifics I'd be happy to help further.
I would have to agree with (Remi), The Service Level Agreement is a very important tool and should be used with all (consultant) clients. Not everyone is going to agree with or like your work (opinions) I find that fact based information is hard to dispute. You should always listen to your clients and try if possible to make them happy. They could be repeat customers and refer future business.
With that being said, everyone will not be happy; that's why it's important to have legal documentation in place to protect you when dealing with all clients.
I would recommend preventative measures. Get sign offs and approvals throughout the process. This will preempt the delays cause at the end by people who don't want to pay.
Hello Sheetal. Without knowing any other background of your situation and depending on the kind of work you do, its always important to have a Service Level Agreement (SLA) and\or Contract with T&C's.
The reason I state this is because it should state clearly what the deliverables are and how to redress any anomalies, complaints, etc about the product or service. These are clearly linked to payments and penalties, etc. If on the other hand, you've delivered the work and its been signed of as satisfactory, good or perfect and then they are not paying, then that's different and you may begin to redress it by your credit control systems, rules of which will differ from country to country, eg small claims court if applicable or advisable. Hope that helps. Remi Okeshola
I would need to know more information about them. Are they constantly doing this or is this just a one time situation?
All of the comments regarding setting up controls and, possibly, getting a retainer are valid.
I have been licensed as a CPA for over 30 years. I very rarely have a situation like this. When I have, I first do as Steve said and determine if the complaints are valid. If they are, I asked the client what adjustments to the fee do they think are valid and let them know I will correct the situation in the future. If there is a misunderstanding or disagreement, I try to discuss the situation openly and honestly.
I also determine whether I want them ongoingly as a client. If I do, I will make adjustments to keep them happy and continue the relationship. If I think they're just trying to weasel out of the fee, I am a little more insistent and then I will send them the disengagement letter a week or two after their check clears. Life is too short to deal with those type of people.
Maybe the bottom line answer for you is, it's not worth arguing with the client over a small amount. The aggravation and hassle of them going to the accountancy board, etc. is not worth it. And, personally, I have never sued a client for fees because they are always going to come back and make your life miserable.
The described situation often comes up because of weak governance, and can preemptively be avoided with strong project management and control throughout the project or service you are selling.
You may feel hesitant to set up a clear-cut "fist on the table" project manager, but in reality, customers actually prefer that over a weak and therefore uncontrolled project. Soon you will find that the fist on the table project manager will be directly solicited by your customers for future projects.
But even with that in place, you will find that certain customers still behave in the described way, suddenly interpreting the scope differently, and so on, not paying or threatening to pull out with large law suits. When you ask around you will most certainly discover that that particular customer is actually notorious to do so with all his suppliers. Here it is instrumental to handle the situation right from the beginning, before the egg hatches, or it will lead to burning up time, resources, energy and motivation from all your teams involved.
I would be curious to know if others also had such specific cases, and how you handled them.
Get 50% of the project fee up front and then either agree to milestones along the way to completion or at a minimum have multiple email exchanges to get their feedback so the potential for last-minute complaints is reduced. If you do use milestones you can also build into the contract a lower and lower refund percentage as each milestone is completed, so that by the time the project is done the client isn't entitled to a refund even if they raise complaints at that point. Obviously there is a question to answer for each of these situations about how much if at all you want to work with the client again and how valid their issues are....
Prior to payment I always ask if the job and work done was satisfactory and, at that point, handle any issues that might arise to full AGREED UPON satisfaction.
Then, any complaints or issues raised at the time of payment would not be genuine and would simply be viewed as an effort to reduce or change the payment.
Most clients are excellent but, in any professional or industry, yoiu are goign to get that small percentage who are always looking for ways to not pay or reduce the vaid payment for a service or product. Getting an agreed satisfaction prior to asking for payment tends to resolve that issue.
I agree with Steve's answer that you need to establish if there is really grounds for "complaint" and would add that if you had established a decent scope of work and managed the acceptance criteria throughout the project then the problem could be handled objectively.
And yes, you can always walk away...
Stay positive towards the client and have them explain why they have not raised the issue of eventual faults before now i.e. just before they have to pay. It might be an attempt for price reduction even though it's a bad method by the client but it happens once in a while. If you find that there are no faults then stick to your agreed payment and explain your point of view. Some clients accept, some don't.
To prevent such discussion break the job and payments down into smaller chunks so that potential faults can be corrected at short notice - or the project can be stopped, if client and you cannot continue.
First, stay positive and completely listen to their complaints. Then evaluate if YOU feel any of them are valid.
If they are valid, discuss what you can do to correct the situation & have them verify payment will be made if you make the corrections.
If the complaints are not valid ( ie.. not within the original scope of work), realize the client is someone not worthy of your skills. Discuss why you feel the client is not being reasonable, but do not waste too much of your time. Often, it is best to cut your losses and move on to better clients.
Going forward, think about coming up with a process like JC Quek's answer. I like to use a partial payment system during the life cycle of the project. This allows you to verify the client is satisfied during each step of the project, and you have a better chance of full payment. More important, it helps you obtain a completely satisfied client who will be an excellent source of referrals.
I hope this helps... Feel free to contact me to discuss further. I have owned a small IT consulting & service firm for 30 years. I've dealt with a few crappy clients, but they are long gone. The 70ish firms I work for have been with me for 10 to 30 years. This is the key. Evaluate the client before taking the job.
The appropriate way is set up a good credit control system. The system starts to operate from the time we make quotes to client ... until receive full payment from client.
I always do this for my clients as their management consultant currently.
When I was holding appointments as CEO and CFO in previous companies, maintaining good credit control system one of the key systems I emphasized on.
I think the most practical approach is to get good Accountants that experience in credit control management to implement the system.