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PAYMEs

I was talking with an Engineer I know and he was bummed out that he was being stiffed for about $6000 worth of consulting fees.  Apparently his customer didn t realize how expensive it was and they did not have a written contact.  I know some of you are saying stupid stupid stupid but It is not uncommon for some very charming people to not pay their last installment when they don t think they will ever need you again.  I told him I never put in more than $500 worth of my time unless we have a contact in place.  Even with that if all the people that owed me $500 paid me, I could buy a new car.

 I told him that whenever I present a proposal it will include at least two show stoppers ( problems unsolved and undocumented.)  I figure if I get the job I will solve them but if they take my proposal to a cheaper consultant he won t know how to make it work.  (I have been asked back after 6 months to finish a project)  I also like to put PAYMEs in the code.  A PAYME is a bit of software that will cause the product to stop working after a couple of weeks.  Maybe instead of a for(;;)  I put a for(i=0;i< bazillion; i++)  This version of the code is adequate for product development but not for official release.  No one ever gets source code until they are all paid up.  I had one non payer call me and ask what it would take for me to fix his code.  I said he could pay me.  He then asked if there was anything else he could do instead.  I explained that would be physically impossible.

 What tricks do you guys use to insure you get paid?

Comments

strauch1's picture

In addition to the code trick, I usually incorporate an error in the schematic. The error is removed upon last payment, and all final documentation is delivered.

tommoxon's picture

Dave,

I would caution people about putting timebombs in code, that can get you sued.
(You can google the legal precedents about that, it's complicated...)

A better method is to use a hardware key that is included with the pre-production code,
and the key check is removed in the final production release; and make sure
that this is disclosed in the statement of work, so you are covered legally.

Also, never underestimate the power of the "Mechanic's Lien",
putting a lien on the company will get you payed quickly,
but you are unlikely to get an further work.

Note, that you can deduct the unpaid invoice(s) as "Bad Debts" on your taxes,
but only if you have tried to collect, usually in small claims court.

Unfortunately this happens more often than not to small consultants.
The best way to prevent it is to have very clear milestones
in you contract/statement of work, with a pay point for each
milestone. Make sure to include a cancellation clause in the
contract for nonpayment and nonperformance (covering both you
and the client). Make sure to have a lawyer review your contact form.
It will be a good investment in your business.

:-) Tom

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