How do you guys make sure you get paid?

Jesse Sng jsng at
Sat Feb 19 01:42:54 EST 2005

>Get paid/deliver in phases, timeout the last delivered version, perhaps with
>an unlock code, until final payment is received (and cleared).
>Scott Rossi
>Creative Director
>Tactile Media, Multimedia & Design

I'm no longer doing any of this stuff for a living, but this is what 
we used to do:

1. Go for 50% downpayment or as high a downpayment as possible
2. We usually compute our downpayment quantum to be high enough to 
cover our COSTS of doing the whole job
3. this ensures that in our worst case, we've already recovered our 
cost of doing this job even if everything falls apart after that.

This is necessary in our case because the standard practice where I 
live is that even big businesses have a nasty habit of working with 
smaller firms on the basis of 90 days or even 6 months credit ("so 
sue me"). This can create a massive problem with your cashflow if you 
allow it.

So if I ensure that I cover myself in the downpayment or initial 
payments, then I can stay cool while the client starts to waste 
valuable time and this also gives me room to move in cases where 
things get stalled for reasons outside of our control.

Once you start sweating about the payments being delayed, if you have 
a lousy client, they know they control you and you're in trouble. On 
the other hand, if they know that you can afford to walk away from 
the project without hurting, they're the ones with the problem and 
they need to work on 'motivating' you.

Contracts may not mean very much, neither do court judgements. We won 
a summary judgement before and the client was told to pay up and what 
they did was to ship out every piece of furniture and equipment they 
had and the owner left town and went to another country. We never 
recovered the money and 2 years later, he showed up in their local 
media as an entrepreneurship "hero" there.


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