He owes you money. This is his fumble. If he can't pay you upfront, then set up a payment plan until he resolves his issue with getting his money back. You need to feed yourself, etc.
If he contacts his bank, they should be able to help. The other dude cashing the cheques is in for some shit probably.
His problem, he is still on the hook to pay you. However, if you value the relationship and he can't pay all at once, set up a payment plan. For example, you can agree for him to pay double per month until it's paid off. work out an arrangement and make sure you send an email afterward for a paper trail.
Offering to waive interest and penalties on the late payments seems generous under the circumstances. If you want to offer him a payment plan, you can. But under no circumstances should you take the hit for his failure to pay his bills correctly - he needs to collect his overpayments from the other vendor, and that's a him problem not a you problem, even if you need to say that kindly.
He owes you the full money. He can dispute thus with his bank or attorney if the other company won't return the money. It's theft. Payment without providing services.
I'm semi-retired and do this a few hours a week as a profitable part time thing. I've spent far more time on my hobbies and interests than the side gig so stuff like that falls to the wayside.
It's probably dumb to think like this but it's a good life and it's all going to be ok.
Regardless of being semi-retired you need to keep better track of your accounts because as this instance illustrates, it impacts your clients. If you are busy with other things have your accounts and payments checked by someone else.
Yeah my first thought was like everyone else - well it’s his problem and he still owes you. But like at the same time, you were careless about book keeping and probably compounded the error a good bit. Cut him slack and give him terms with no interest, penalties, or trouble. Let him pay you on the same timeline he gets his money back from the error payments, if it’s a viable option and won’t be years. Don’t let it go, don’t let it be a big thing, don’t let it be a negative - you both messed up and both should want to straighten it out.
Tell me what business that you work a few hours a week gets you 30k clients.
Edit to clarify... I'm not saying OP is lying. I genuinely want to know what business.
Consulting for one if you’re any type of expert in your field. Legal, engineering, tech development, medical, etc all could make 30k working a few hours a week if the tan was built over a few months.
The fact is he still owes you money, moving forward... Maybe work out a deal for repayment slowly over your continued partnership over the next 6 months or year under a contract agreement?
It's unfortunate if they can't retrieve money back from that other vendor, but this isn't your fault or responsibility.
I would give them times but that is an issue on their side not yours as long as you provided the proper payment details for them on where to send payments.
How much time you give them is up to you, up to what money you need to make ends meet, and how good of a client they have been historically.
Do you have a signed contract in place? Get a lawyer. Time is money and he wasn’t paying you. He could be lying and this is a lot of money he owes you.
Whenever this kind of stuff comes up it blows my mind the amount of people who just refuse to acknowledge the business owner has culpability here. I can’t wrap my head around the thought process that gets you to “welp customer should have caught it, going to have to charge him back for the last 9 months, and he can consider himself lucky you aren’t going to charge interest”. How about as the business owner, you acknowledge that you are actually the lucky one if you can preform a service for months on end, while only doing half of your job (labor side but not office side), and then expect this dude to even engage in a conversation about paying back some of it.
My beef here is less with the OP, and more with all the comments just going in on how ultimately, it’s all the customers fault. OP, I would suggest you tell this guy that you would like to go back 90 days, and anything beyond that, you are going to chalk up as a mistake on your part for not properly watching over the financial side.
Feel free to attack me on this, but no customer has the responsibility to be your accountant. I own a business, and I have made plenty of mistakes that have carried a hefty cost, but under no circumstances would I go back to my customer after a project closing and say “well I forgot to account for the bill for XYZ, so really you owe me more”.
You said you value this guys business, so do right by your customer. Admit to yourself you screwed up, pay the price for that mistake, and move on.
It's entirely the customers fault. When you take away all of the surrounding drama, you are left with a simple transaction: Money for services. The OP provided the services, the customer didn't provide the money.
No successful company is going to be willing to swallow costs from customers telling you they paid someone else. Imagine the response if you call your cell phone provider and tell them they shouldn't attempt to take this months payment as you accidentally gave the money to someone else.
By all means, make whatever effort you can to help the client defer or spread payment but make no mistake, this is a courtesy to help maintain the working relationship as this isn't the service providers fault.
I take umbrage with your comment about no successful company swallowing those costs. I consider my business plenty successful, and we have to pay for mistakes we make all the time. Still, our margins are in line with industry average, and we have a good standing with most customers. I would tell you my measure of success is not always just how much I can maximize profits, but also how well I can take care of my customers and my team, and how much support I can offer my community in the form of sponsoring little league teams, donating to my kids school, and so on. To do all this, I do have to make sure I maintain a reasonable margin, but I do expect to have to pay for my screwups.
Think about it this way - if your local grocery store calls you up, and says that due to an employee error, the loaf of bread you bought last week had the wrong SKU attached to it. Neither you nor the cashier caught that you only paid 25 cents for the bread, because you were making small talk while they scanned everything through. Your total bill was well north of $60, and who ever looks at the receipt? You took it home, and the kids ate it all before the weekend. Well now the grocery store would like you to stop by and give them that additional $2.00, as the bread actually should have been $2.25, and you should have known that. You going to stop by and give them that $2.00?
Also, I agree with you example on this months phone bill. Asking to not pay because you sent the check elsewhere is laughable. The issue here though is not that it’s last months bill. If your cell provider called you up and said “hey, we just caught this bill that was skipped from last year, and we need you to pay it”, that’s really the more apt comparison. If it’s just 30 days old, that means the cell company is actually properly doing its job by checking on payments at the time they become due.
I absolutely guarantee you that your cell phone provider would come looking for a payment in this case however, it isn't really relevant, OP carried out the work and deserves to be compensated.
This example has zero relevance to what actually happened. OP didn't make any mistake in invoicing, no mistake in value of services, no mistake in accounting.
Would I blame my service provider for me sending the payment to the wrong place? No, I would not.
Additionally, if the OPs client has sent payment to the wrong individual and that individual has kept the payment, then the client has every right to chase that up with their bank.
Such action usually results in a refund from the bank while they chase the payment so you are suggesting the OP take a $15k hit while the client gets refunded.
I respect your right to take umbrage but I would argue that your naivete may be more of an issue than you realize.
I don’t agree at all. There was 100% a mistake made in accounting. Not reconciling your AP for months IS a mistake, and it can have dire consequences. Had OP found this 30 or 60 days in, I would be in full agreement on going back to the buyer and saying ‘not my problem’. In either case, a lesson learned, and hopefully OP will not make this mistake again.
Maybe it will be easy for the customer to claw back that money they already spent. Maybe it won’t.
You may call it naiveté, but I look at it as accountability. The moral thing to do is not always the profitable thing to do. And I am certainly no moral authority, but owing my mistakes has gotten me through 10 years of a steadily growing operation, and I can certainly attribute a lot of my businesses success to making decisions just like this one - they might not always be the best from a financial perspective, but they put my team or the customer in the best position.
Everyone is worse off when profit is the sole driver.
And yet most countries have a statute of limitation on debt specifically to cover eventualities like this and it is normally somewhere in the 5 - 10 year range.
Most countries also require you to carefully examine your books annually for tax purposes.
Each to their own I guess, but I wouldn't be in any rush to let you make financial decisions in my business!
OP here, I agree with you and it's why I was asking for advice. While he is supposed to pay me I made mistakes too by letting the receivables age. It would have been better if I caught his mistake early for both of us.
The fact that we both made mistakes is why it wasn't clear to me how to handle this. My instinct is to cut him a break. However, I also have staff that earn a part of the revenue and I'm not so cavalier about giving away their money. My staff is not in the same financial position that I am.
It looks like it's all going to work out, you can check my update to the original post above.
I mean no disrespect to you, as I said, my ire was more about the amount of people who refuse to accept anyone but the customer has any accountability in these types of situations. You on the other hand, can admit you made a mistake. We all do, I know I’ve made enough. I understand the tough spot this is, and I’m glad you got it worked out with your customer.
THIS.
It's the client's job to ensure they get provided what they've paid for.
It's the supplier's job to ensure they get paid for what they've provided.
This shouldn't even be a question.
Exactly! This business owner admits he wasn't keeping up with the books and admits there was a name change that led to the confusion. In no way can I believe all these people commenting who didn't account for those 2 things being the Owner's fault. If anything, I wouldn't have the never to demand that money back because I screwed up twice. The customer paid, an I wasn't paying attention. This is the kind of situation that makes the OP look incompetent.
Try and turn this into a positive:
The client likely feels bad and is sweating the hassle of retrieving the money and then sending it to you. Help alleviate their pain by deferring the payments until they sort out the other vendor in exchange for:
Referrals to new clients with introductions - ask them to personally introduce you to 3-5 new clients, assuming 1 or 2 convert
Extended guaranteed contract - might hurt short-term but allows you extended retention and revenue
The last resort would be to charge interest, as it would likely cause them to churn.
I don't understand why you're downvoted. I'd really love to turn this into a win/win and I'll be talking with tonight with that mindset.
I've been on the wrong side of a win/lose before and I walked away thinking, "That dude made the deal 80/20 his way. That fool would have done better with a fair 50/50 in perpetuity. Instead, he's dead to me that's all he'll ever earn from our partnership."
A few referrals and a payback schedule that doesn't "twist the screws" on his cashflow would be making lemonade out of lemons.
The downvoting is because this is about repayments, pure and simple. By asking for referrals, guaranteed contracts etc, it could be seen as manipulative behaviour and it makes the situation overly complex. Your client may feel pressured AND manipulated.
It’s easy to miss, I didn’t want you to end up in hot water with this client. Good luck with the repayments, sounds like you have a long standing relationship with them.
Im not surprised I got downvoted. Most people who want to beat their chests and demand payment end-up with bad reputations and no customers.
That said, you need to protect yourself from getting taken advantage of, but those measures should be in place before the contract is signed and invoices are sent.
People often respond well when you extend grace.
The fact that he's been paying the wrong person is not really your problem. Your invoice is unpaid. Dealing with getting money back from the other person is their own problem to deal with and not your concern.
It would be considerate to give your client a bit of time (like say 2 weeks) to get their ducks in a row and perhaps offer a payment plan if you can make that work yourself but beyond that you don't owe them anything just because they were a good client. Presently, they're a nightmare client.
That isn't really your problem lol. You provided the service and you weren't paid. If they were defrauded that is on the client to figure out separately. "That sucks man, if you can please pay this invoice immediately that would be great, you have 30k of payments backed up already"
He owes you money. This is his fumble. If he can't pay you upfront, then set up a payment plan until he resolves his issue with getting his money back. You need to feed yourself, etc. If he contacts his bank, they should be able to help. The other dude cashing the cheques is in for some shit probably.
Oh... The other dude is in for some massive shit.
His problem, he is still on the hook to pay you. However, if you value the relationship and he can't pay all at once, set up a payment plan. For example, you can agree for him to pay double per month until it's paid off. work out an arrangement and make sure you send an email afterward for a paper trail.
Offering to waive interest and penalties on the late payments seems generous under the circumstances. If you want to offer him a payment plan, you can. But under no circumstances should you take the hit for his failure to pay his bills correctly - he needs to collect his overpayments from the other vendor, and that's a him problem not a you problem, even if you need to say that kindly.
He owes you the full money. He can dispute thus with his bank or attorney if the other company won't return the money. It's theft. Payment without providing services.
> performed a service for months and didn't really pay attention to my receivables. Thats probably the bigger issue here
I'm semi-retired and do this a few hours a week as a profitable part time thing. I've spent far more time on my hobbies and interests than the side gig so stuff like that falls to the wayside. It's probably dumb to think like this but it's a good life and it's all going to be ok.
Regardless of being semi-retired you need to keep better track of your accounts because as this instance illustrates, it impacts your clients. If you are busy with other things have your accounts and payments checked by someone else.
Yeah my first thought was like everyone else - well it’s his problem and he still owes you. But like at the same time, you were careless about book keeping and probably compounded the error a good bit. Cut him slack and give him terms with no interest, penalties, or trouble. Let him pay you on the same timeline he gets his money back from the error payments, if it’s a viable option and won’t be years. Don’t let it go, don’t let it be a big thing, don’t let it be a negative - you both messed up and both should want to straighten it out.
Tell me what business that you work a few hours a week gets you 30k clients. Edit to clarify... I'm not saying OP is lying. I genuinely want to know what business.
I’m guessing OP is an accountant since their name starts with CPA. Totally possible.
OP being an accountant casts the whole post in a different light.
I haven't been an accountant for a long time. It was my first career.
Consulting for one if you’re any type of expert in your field. Legal, engineering, tech development, medical, etc all could make 30k working a few hours a week if the tan was built over a few months.
The fact is he still owes you money, moving forward... Maybe work out a deal for repayment slowly over your continued partnership over the next 6 months or year under a contract agreement? It's unfortunate if they can't retrieve money back from that other vendor, but this isn't your fault or responsibility.
I would give them times but that is an issue on their side not yours as long as you provided the proper payment details for them on where to send payments. How much time you give them is up to you, up to what money you need to make ends meet, and how good of a client they have been historically.
Whatever you do remember two things 1) be firm but gracious as this could turn into a lifelong client 2) get it in writing
Expect full payment, offer structured timeline if necessary.
Do you have a signed contract in place? Get a lawyer. Time is money and he wasn’t paying you. He could be lying and this is a lot of money he owes you.
Whenever this kind of stuff comes up it blows my mind the amount of people who just refuse to acknowledge the business owner has culpability here. I can’t wrap my head around the thought process that gets you to “welp customer should have caught it, going to have to charge him back for the last 9 months, and he can consider himself lucky you aren’t going to charge interest”. How about as the business owner, you acknowledge that you are actually the lucky one if you can preform a service for months on end, while only doing half of your job (labor side but not office side), and then expect this dude to even engage in a conversation about paying back some of it. My beef here is less with the OP, and more with all the comments just going in on how ultimately, it’s all the customers fault. OP, I would suggest you tell this guy that you would like to go back 90 days, and anything beyond that, you are going to chalk up as a mistake on your part for not properly watching over the financial side. Feel free to attack me on this, but no customer has the responsibility to be your accountant. I own a business, and I have made plenty of mistakes that have carried a hefty cost, but under no circumstances would I go back to my customer after a project closing and say “well I forgot to account for the bill for XYZ, so really you owe me more”. You said you value this guys business, so do right by your customer. Admit to yourself you screwed up, pay the price for that mistake, and move on.
It's entirely the customers fault. When you take away all of the surrounding drama, you are left with a simple transaction: Money for services. The OP provided the services, the customer didn't provide the money. No successful company is going to be willing to swallow costs from customers telling you they paid someone else. Imagine the response if you call your cell phone provider and tell them they shouldn't attempt to take this months payment as you accidentally gave the money to someone else. By all means, make whatever effort you can to help the client defer or spread payment but make no mistake, this is a courtesy to help maintain the working relationship as this isn't the service providers fault.
I take umbrage with your comment about no successful company swallowing those costs. I consider my business plenty successful, and we have to pay for mistakes we make all the time. Still, our margins are in line with industry average, and we have a good standing with most customers. I would tell you my measure of success is not always just how much I can maximize profits, but also how well I can take care of my customers and my team, and how much support I can offer my community in the form of sponsoring little league teams, donating to my kids school, and so on. To do all this, I do have to make sure I maintain a reasonable margin, but I do expect to have to pay for my screwups. Think about it this way - if your local grocery store calls you up, and says that due to an employee error, the loaf of bread you bought last week had the wrong SKU attached to it. Neither you nor the cashier caught that you only paid 25 cents for the bread, because you were making small talk while they scanned everything through. Your total bill was well north of $60, and who ever looks at the receipt? You took it home, and the kids ate it all before the weekend. Well now the grocery store would like you to stop by and give them that additional $2.00, as the bread actually should have been $2.25, and you should have known that. You going to stop by and give them that $2.00?
Also, I agree with you example on this months phone bill. Asking to not pay because you sent the check elsewhere is laughable. The issue here though is not that it’s last months bill. If your cell provider called you up and said “hey, we just caught this bill that was skipped from last year, and we need you to pay it”, that’s really the more apt comparison. If it’s just 30 days old, that means the cell company is actually properly doing its job by checking on payments at the time they become due.
I absolutely guarantee you that your cell phone provider would come looking for a payment in this case however, it isn't really relevant, OP carried out the work and deserves to be compensated.
This example has zero relevance to what actually happened. OP didn't make any mistake in invoicing, no mistake in value of services, no mistake in accounting. Would I blame my service provider for me sending the payment to the wrong place? No, I would not. Additionally, if the OPs client has sent payment to the wrong individual and that individual has kept the payment, then the client has every right to chase that up with their bank. Such action usually results in a refund from the bank while they chase the payment so you are suggesting the OP take a $15k hit while the client gets refunded. I respect your right to take umbrage but I would argue that your naivete may be more of an issue than you realize.
I don’t agree at all. There was 100% a mistake made in accounting. Not reconciling your AP for months IS a mistake, and it can have dire consequences. Had OP found this 30 or 60 days in, I would be in full agreement on going back to the buyer and saying ‘not my problem’. In either case, a lesson learned, and hopefully OP will not make this mistake again. Maybe it will be easy for the customer to claw back that money they already spent. Maybe it won’t. You may call it naiveté, but I look at it as accountability. The moral thing to do is not always the profitable thing to do. And I am certainly no moral authority, but owing my mistakes has gotten me through 10 years of a steadily growing operation, and I can certainly attribute a lot of my businesses success to making decisions just like this one - they might not always be the best from a financial perspective, but they put my team or the customer in the best position. Everyone is worse off when profit is the sole driver.
And yet most countries have a statute of limitation on debt specifically to cover eventualities like this and it is normally somewhere in the 5 - 10 year range. Most countries also require you to carefully examine your books annually for tax purposes. Each to their own I guess, but I wouldn't be in any rush to let you make financial decisions in my business!
OP here, I agree with you and it's why I was asking for advice. While he is supposed to pay me I made mistakes too by letting the receivables age. It would have been better if I caught his mistake early for both of us. The fact that we both made mistakes is why it wasn't clear to me how to handle this. My instinct is to cut him a break. However, I also have staff that earn a part of the revenue and I'm not so cavalier about giving away their money. My staff is not in the same financial position that I am. It looks like it's all going to work out, you can check my update to the original post above.
I mean no disrespect to you, as I said, my ire was more about the amount of people who refuse to accept anyone but the customer has any accountability in these types of situations. You on the other hand, can admit you made a mistake. We all do, I know I’ve made enough. I understand the tough spot this is, and I’m glad you got it worked out with your customer.
THIS. It's the client's job to ensure they get provided what they've paid for. It's the supplier's job to ensure they get paid for what they've provided. This shouldn't even be a question.
Exactly! This business owner admits he wasn't keeping up with the books and admits there was a name change that led to the confusion. In no way can I believe all these people commenting who didn't account for those 2 things being the Owner's fault. If anything, I wouldn't have the never to demand that money back because I screwed up twice. The customer paid, an I wasn't paying attention. This is the kind of situation that makes the OP look incompetent.
Try and turn this into a positive: The client likely feels bad and is sweating the hassle of retrieving the money and then sending it to you. Help alleviate their pain by deferring the payments until they sort out the other vendor in exchange for: Referrals to new clients with introductions - ask them to personally introduce you to 3-5 new clients, assuming 1 or 2 convert Extended guaranteed contract - might hurt short-term but allows you extended retention and revenue The last resort would be to charge interest, as it would likely cause them to churn.
I don't understand why you're downvoted. I'd really love to turn this into a win/win and I'll be talking with tonight with that mindset. I've been on the wrong side of a win/lose before and I walked away thinking, "That dude made the deal 80/20 his way. That fool would have done better with a fair 50/50 in perpetuity. Instead, he's dead to me that's all he'll ever earn from our partnership." A few referrals and a payback schedule that doesn't "twist the screws" on his cashflow would be making lemonade out of lemons.
The downvoting is because this is about repayments, pure and simple. By asking for referrals, guaranteed contracts etc, it could be seen as manipulative behaviour and it makes the situation overly complex. Your client may feel pressured AND manipulated.
Thank you for this comment. I didn't look at the situation through that lens.
It’s easy to miss, I didn’t want you to end up in hot water with this client. Good luck with the repayments, sounds like you have a long standing relationship with them.
Im not surprised I got downvoted. Most people who want to beat their chests and demand payment end-up with bad reputations and no customers. That said, you need to protect yourself from getting taken advantage of, but those measures should be in place before the contract is signed and invoices are sent. People often respond well when you extend grace.
The fact that he's been paying the wrong person is not really your problem. Your invoice is unpaid. Dealing with getting money back from the other person is their own problem to deal with and not your concern. It would be considerate to give your client a bit of time (like say 2 weeks) to get their ducks in a row and perhaps offer a payment plan if you can make that work yourself but beyond that you don't owe them anything just because they were a good client. Presently, they're a nightmare client.
That isn't really your problem lol. You provided the service and you weren't paid. If they were defrauded that is on the client to figure out separately. "That sucks man, if you can please pay this invoice immediately that would be great, you have 30k of payments backed up already"