How communication got an overdue invoice paid.
One of my clients at a recent meeting said to me, “We have a large overdue invoice that we can’t get paid. The customer is refusing to pay even though we’ve gone above and beyond what was agreed. How can we get them to pay?”
So a bit of background, this client produces films for their customers. In this particular instance, Let’s call the Customer “My Wishes” and my Client “Filming Flipper”.
Filming Flipper had agreed to produce 3 x 30 minute DVD edits (not the actual DVDs themselves ) and 2 x 1.5 minute edits at a location of the clients choice. This was all agreed up front – something I recommend you do and also put it in writing!
My Wishes had sourced the venue and organised the actors and Filming Flipper arrived on the day to do the filming ready for the editing.
The day of Filming:
My Wishes had forgotten to ask the venue if anyone else had booked a room close by on the same day, this lead to issue 1 – background noise from another booking at the venue.
Filming Flipper, accommodated this by doing more filming than had originally been agreed and learnt a lesson, if the customer books the venue make sure they check what other bookings are on the same day and what noise level they will be producing. Remind the customer if they book the venue not you, any issues with the location will be their problem to resolve.
The day didn’t go quite to plan as My Wishes weren’t as organised as Filming Flipper expected and so it over ran/wasn’t as organised as it could have been.
Filming Flipper then went back to the studio to work on the edits.
Work commenced by Filming Flipper
Since Filming Flipper are a great company that pride themselves on fabulous customer experience, they agreed due to the issues on the day, none of which were their fault, they would produce 4 x 30 minute DVDs and 1 x 5 minute clip.
This is above what had been agreed before. They produced these and My Wishes came to the studio, reviewed the final Dvds verbally agreed they were fine and left happy with the service.
The Problems began….
Then the problems began – there was a lot of emails flying around, mostly started by My Wishes saying the quality wasn’t good enough and they couldn’t use the DVDs so they wouldn’t pay the costs agreed before filming commenced.
If they films were so bad, why then did they put them on sale in time for Christmas? Why did they say they were fine when they left the screening at Filming Flippers office?
As I said emails had been going backwards and forwards before Filming Flipper asked me to come in and help them out. All the time this overdue invoice was getting older!
We discussed what had been happening, the history and all the issues/sign off stages etc and Filming Flipper said “My Wishes want us to go to their office for a meeting as they won’t pay the full amount, they are trying to pay nothing, do we have to go?”
Suggestions for resolution:
I advised them in order to get payment resolved, they would need to have some sort of non email communication with My Wishes, it would be better if this meeting involved seeing each other, as you can read so much from body language you can’t get from over the phone.
Skype call, Google Hangouts, other video conferencing options were discussed, but my over-riding suggestion was that they do go to My Wishes office, show that they wanted to get this debt settled and the matter closed. However before they went, so that no time was wasted talking in circles, or their issues not being answered, the meeting date would only be fixed once My Wishes sent through a list of all the problems that were stopping payment of the invoice.
By having these up front Filming Flipper could prepare answers, only take the people needed for the meeting rather than everyone from the office as they didn’t know what the exact issues were and it would save time during the meeting as points could be discussed and Filming Flipper could get agreement from My Wishes that they had resolved all the points raised.
Filming Flipper and My Wishes had that meeting, I called Filming Flipper who said “It went well, we got their agreement that the points they raised weren’t valid. They agreed to the points we raised. What do we do now?”
As with every meeting, phone conversation I said put down what was agreed in writing, explain the debt is overdue and give them a payment deadline to make the payment to prevent this having to be passed externally to get payment.
I called Filming Flipper a few days later, to see how the new processes we’d implemented were going and see if they had any questions they needed me to clarify to be told
“We danced round the office this morning,
MY Wishes have paid us in FULL.
What can you do?
So if you have a customer who is refusing to pay, who is demanding a face to face meeting but you know is in the wrong, follow these simple guidelines to stop the customer refusing to pay even though you’ve gone above and beyond what was agreed:
Get a detailed list of all the reasons they aren’t paying
Do your research and get your back up documentation together to prove their points invalid
Take anyone directly involved with the problems (not everyone involved with the project) to the meeting
Answer each of their issues in turn, then get them to agree the issue is now resolved and will not be a reason for none payment.
Follow up the meeting with an email again listing all their previous grievances, the reason they weren’t valid and the fact they had agreed this was no longer a reason for non payment.
By doing these actions, Filming Flipper had an overdue, high value invoice paid in full even though the conversation started with the phrase “The customer is refusing to pay…”
How could you use this advice to get one of your customers who is refusing to pay you to settle that invoice?