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Businesses The Almighty Buck

Ask Slashdot: How To Collect Payments From a Multinational Company? 341

Posted by timothy
from the greedy-europeans-all-they-want-is-money dept.
An anonymous reader writes "I run a small dev shop focused on web development, based in Europe. For the past six years we've had lots of successful projects with clients from CEE, Western Europe and the U.S. One of our main clients was based in the U.S. We started working for them in 2008, while they were a 'promising start-up' and everything went smoothly until they were bought by a multinational corp. We couldn't be happier to work for such a big player in the market, andwe even managed to get by with huge payment delays (3-4 months on a monthly contract), but now, after more than two years working for them, I have the feeling we're getting left out. We have six-month-old unpaid invoices and we're getting bounced between the E.U. and U.S. departments every time we try to talk to them. What can a small company do to fight a big corporation that's NASDAQ listed and has an army of lawyers? They've been getting a lot of bad press lately so I don't think that will scare them either."
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Ask Slashdot: How To Collect Payments From a Multinational Company?

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  • Name and Shame (Score:5, Insightful)

    by Dartz-IRL (1640117) on Sunday December 16, 2012 @01:10PM (#42307749)

    Name and shame.

    And point out that they're costing jobs by not paying invoices.

  • The typical answer (Score:5, Insightful)

    by stonecypher (118140) <stonecypherNO@SPAMgmail.com> on Sunday December 16, 2012 @01:12PM (#42307761) Homepage Journal

    Send them an invoice with the maximum late payment penalty that the law AT BOTH SIDES allows, with a giant red statement that they're half a year late, and send it it to the person responsible, with a clear explanation of how much each increased payment delay costs.

    If they delay you even one month beyond that, send a new invoice with the expected increase, and cc: it with a copy of all the others you've sent to the person responsible, their manager, accounts receivable, and the office of the president.

  • get an attorney (Score:5, Insightful)

    by Anonymous Coward on Sunday December 16, 2012 @01:14PM (#42307771)

    have an attorney in the usa draft them a letter asking for a simple explanation along with a detailed sequence of events.

    this will mean they will ask their own attorney to give a response.

    their own attorney will tell them they better avoid legal issues over a startup purchase. how would google look if it didnt pay off youtube debt holders when buying the site?

  • by Roogna (9643) on Sunday December 16, 2012 @01:14PM (#42307775)

    File a lien against them, and make sure you inform Dun and Bradstreet of the lien.

  • Um, Litigate? (Score:4, Insightful)

    by naturaverl (628952) on Sunday December 16, 2012 @01:14PM (#42307777)
    They do business in EU, as do you. The solution should be obvious. Drag them into court.
  • by sporkboy (22212) <maddogNO@SPAMjerky.net> on Sunday December 16, 2012 @01:15PM (#42307781) Homepage

    I've been in IT at a major corp and had a supplier that I worked with personally come to me due to non-payment. I had to go pretty far up my chain of command before I found someone who would apply pressure to finance to pay up on the contract that they signed and approved. Had I not been there to facilitate it would have taken even longer, if they got paid at all. The supplier was international so they got a runaround. Wish I had a better answer, but finance depts sometimes like to collect interest on their bank accounts even at the expense of the company's reputation.

  • by MickyTheIdiot (1032226) on Sunday December 16, 2012 @01:16PM (#42307791) Homepage Journal

    Yes this is the typical answer...

    But something needs to be said: the law in the U.S. is AMAZINGLY forgiving for multinational companies not fullfilling contracts to individuals. We live in a society that is completely hypocritical when it comes to contracts. The masses seem fine when a company violates contracts to individuals but not vice versa.

    I wish I could be positive, but with the laws and the courts so scewed towards the rights of corporations, what realistic chance does the submitter have to get his rightfully earned money?

  • File a Lien (Score:4, Insightful)

    by PPH (736903) on Sunday December 16, 2012 @01:17PM (#42307803)

    http://en.wikipedia.org/wiki/Lien [wikipedia.org]

    It might be too late and you'll need the assistance of an attorney familiar with international contracts. But the next time the board of directors flies that company jet into St. Moritz, its yours.

  • by Anonymous Coward on Sunday December 16, 2012 @01:21PM (#42307823)

    I would recommend going about it this way.

    This late payment is being caused by two things:
    1. They don't know who the proper person to authorize payment is after the merger.
    2. You don't rate high on the priority list as your invoice is below a certain threshold to constitue an emergency. In other words the penalty that you have built in is seen as a standard cost of doing business.

    Most of the time large corporations are not evil just dumb due to corporate enforced amnesia generated by legal/risk calculus or staff turnover.

  • Bad sign (Score:5, Insightful)

    by EmperorOfCanada (1332175) on Sunday December 16, 2012 @01:23PM (#42307833)
    Keep in mind that this is a huge bad sign. Either they don't have the money, they are too disorganized to pay some small fry, or they are just bad people. Any which way that is not how to run a business.

    A potentially similar sign came shortly before the big sub prime disaster. A guy had money in a Big Euro Bank money market fund which, in theory, will return your money in about 24 hours. So a really good deal came up on a house (house prices were about to crash but hadn't yet) and he needed a big down payment of a million dollars. So he goes to his guy and says, "Withdraw a million." the guy invokes some obscure clause and says NO. He freaks out and then demands all his money. They say they can delay something like 30 or 90 days and they do. So it turns out to be fortunate and he misses out on the house and eventually gets his money. But when I told this to a person I know who is a huge trader he just told me I was wrong wrong wrong, the Big Euro Bank was probably the most sound bank in the world and that they were old and had a huge reputation and wouldn't screw someone like that in a million years. He went on to say my money market friend was probably lying to cover up the fact that he was out of money, not the bank. Needless to say that bank went right to the brink and without government intervention would have died.

    The take-away is that either the people who are handling your account are incompetent, are mean, or that you now have a valuable insight into a company on the brink.
  • Ask Slashdot! (Score:2, Insightful)

    by Anonymous Coward on Sunday December 16, 2012 @01:30PM (#42307875)
    What you need to do is to go onto Slashdot and ask for legal strategy advice.
  • by Daniel Dvorkin (106857) on Sunday December 16, 2012 @01:34PM (#42307897) Homepage Journal

    Fighting a bureaucracy that drags its feet with payments is worse than fighting a trench war

    So, how were things at Passchendaele?

    Not disagreeing with your point, just noting that this is a really ... over-the-top ... analogy, just about as dumb as calling the recalcritant company "a bunch of Nazis" would be, for much the same reason. The Western Front in WW1 is a pretty good candidate for the worst place in the entire history of the world.

  • Been there... (Score:5, Insightful)

    by bradley13 (1118935) on Sunday December 16, 2012 @01:36PM (#42307905) Homepage

    For several years, I also ran a software business in Europe. When we started, our attorney had one bit of advice: never take a customer in the USA. We made exactly one exception, out of good will, and - sure enough, we regretted it.

    If you are not based in the USA, it simply isn't worth the hassle and the risk. If they don't sue you (screw your contract, they'll sue you in a US court, which will claim jurisdiction using the long-arm doctrine), they'll screw you (as you are experiencing).

    It doesn't help you in your situation, you're already there. However, for anyone else who may not yet have taken the plunge, don't. Ethics and law in the US reminds me of adventures in third world countries - it's just as dishonest and corrupt, only with prettier window dressing.

  • Stop working! (Score:5, Insightful)

    by Mr. Freeman (933986) on Sunday December 16, 2012 @01:43PM (#42307937)
    STOP GIVING THEM UNPAID WORK! One of two things has happened here:

    1. They can't or won't pay you. By refusing to work anymore you're effectively cutting your losses by not giving them more work that won't be compensated.
    2. They have their heads up their ass. They want to pay you, but they can't figure it out. In this case, not working will light a fire under their ass and they'll pay you.

    Moving forward, make sure that your contract contains a late payment fee. Also, make sure it specifies who is responsible for paying you and who will be held responsible for non-payment. GET A LAWYER INVOLVED TO DRAFT THIS NEW CONTRACT. Don't try to do it yourself, it won't work.

    In any case, if they don't pay you within the month then you need to talk to a lawyer about suing them.
  • by LordLimecat (1103839) on Sunday December 16, 2012 @01:59PM (#42308003)

    Im not a huge supporter of unions, but Im not seeing why I would hate that idea. I think most people would agree that if a customer treats you like crap, dropping them is a really good way to solve the problem.

    Maybe next time they send a work request to you just respond "would love to do the work, but my superiors say I cannot begin work until we get at least a partial payment for the past invoices". Thats how we handled it at my past job and it always worked pretty well, both at cutting off people who truly werent going to pay and at getting money from folks who were just a bit behind the curve.

  • by Giant Electronic Bra (1229876) on Sunday December 16, 2012 @02:10PM (#42308061)

    Ehhhhh, you can't generalize. I've done business with any number of Fortune 500's. Some are quite good, and they might get screwed up as you say, but they'll fix it if you can get to the right person. Others are actually actively evil and have a policy of just "fuck everyone". They will simply steal from you and flat out have no intention of ever paying.

    1) Always have a signed written contract and PO whenever you deal with a large corp
    2) Get paid up front before work is performed.
    3) If you can't get these things then don't do business with them. Find some other sucker to do it and act as a sub.
    4) Never do business with any bank of any sort whatsoever without cash up front. Don't even start until the check clears. All banks are scum, and the US banks are the worst (but not by much, UK banks are hot on their heels).

  • Re:Name and Shame (Score:5, Insightful)

    by Anonymous Coward on Sunday December 16, 2012 @02:17PM (#42308087)

    Name and Shame violates US consumer protection laws, so it's a bad approach if you plan legal action in the US, or fear the same.

    It's multinational? A better idea might be to sue a local branch of the company in your local court.

  • Re:Name and Shame (Score:5, Insightful)

    by Offenbach (1133493) on Sunday December 16, 2012 @02:27PM (#42308143)

    Please do not do this! First off contracts can be more complicated than they seem and if you make a wrong statement it can leave your company open to libel/slander charge. Second, it will mean that company will never work with you again. It will also look bad, even if your in the right, with new clients down the road.

    Go hire a lawyer for a few hours and get them to write a notice of payment. Likely you are getting transferred between low-level temps in the accounts payable department who don't know what they're doing. A good lawyer can usually get the attention of someone important. Even if you have to take them to court it won't necessarily ruin your business relationship with the company (this stuff happens all the time) - but calling them out in public will.

  • Re:Name and Shame (Score:5, Insightful)

    by erroneus (253617) on Sunday December 16, 2012 @02:50PM (#42308245) Homepage

    Indeed. This is the best answer. Sue in U.S. courts. Someone will pick up the story and the naming and shaming will be a part of the system. They will settle. If you get caught up in trying to do this 'on the cheap' (meaning outside of the courts) you may well find yourself in court as a defendant.

    Out the multinational using the courts and make your case plainly and honestly.

  • by Anonymous Coward on Sunday December 16, 2012 @03:01PM (#42308281)

    According to the law, both sides have rights.

    The fact that they aren't being *enforced* against corporations is a privilege.

  • Re:Name and Shame (Score:5, Insightful)

    by Joce640k (829181) on Sunday December 16, 2012 @03:04PM (#42308295) Homepage

    Name and shame.

    No, don't. Fortune 500 companies tend to be run by grown-ups, not Slashdot posters.

    It's most likely a case of talking to the right person at the other company. Call them and ask who's in charge of your invoices, find out what's going on. Don't accept "we'll call you..." or "he's away this week...", ask to talk to the person's boss, go all the way up to the CEO if necessary.

    Get a real suit to make the calls. Somebody who speaks the right language in the right tone of voice. Pay a lawyer with an extra-expensive suit to do it if necessary (scratch that, get a lawyer with an extra-expensive suit to do it, period. Show him your contract first).

    Chances are, you'll get paid. A contract is a contract and big companies have shareholder reports where lawsuits for breach of them aren't popular items.

    Step 2: If you don't have a contractual obligation then stop working for them. If they're not paying you and not telling you why then the romance is gone, somebody in their hierarchy doesn't like you for some reason. Stop working, call their main competitor and tell them what you were doing, they're probably interested.

  • Re:Name and Shame (Score:5, Insightful)

    by plopez (54068) on Sunday December 16, 2012 @03:17PM (#42308355) Journal

    And make sure to charge interest on all past due invoices, at the highest legally possible rate.

  • Re:Name and Shame (Score:5, Insightful)

    by shentino (1139071) on Sunday December 16, 2012 @03:21PM (#42308383)

    Why is name and shame against US law?

    If it's true it can't well be libel or slander.

    Seriously, I wanna know what stupid law on the books says we can't talk bad about bad companies.

    Citation please?

  • by glassware (195317) on Sunday December 16, 2012 @03:32PM (#42308431) Homepage Journal

    Since I didn't see a ton of comments posted by people who have experience with this, I thought I'd add one.

    Delayed payment is normal. Large companies have very complex rules about how to make payments and how to process invoices. You must be extremely persistent and gracious in order to get things resolved. Each company will respond differently, but I encourage you to make use of some (if not all) of these following tactics:

    1) Get a "Master Vendor Agreement" in place with the customer that states invoicing terms. This contract may take months to negotiate and require guidance from a lawyer. Once this is done, all of your projects should be addendums to this original master vendor agreement. This reduces the amount of paperwork the large multinational company has to do to validate each of your invoices and speeds them up.
    2) Provide both a discount for early payment and a penalty for late payment. Annotate these discounts & payments on each invoice. If you carefully track your effort, you can know how much it costs you to track long term overdue payments. You can use this to determine how much of a discount you can offer for prompt payment.
    3) Designate someone within your company as the "Accounts Receivable" person. It is their job to contact each customer with an overdue payment once per month (or week). They should very carefully take notes on all of their conversations and correspondence, but they _must_ be friendly and relaxed. The goal is to establish a positive rapport with the "accounts payable" person on the other side. It may take dozens of polite phonecalls to get routed to the correct person though, so you absolutely must be willing to put in the effort while not creating bad will.
    4) Be gracious when payment is offered. Many times, companies may refuse to pay late payment fees; you can simply say, "I'll remove the late payment fee if you wire the money by tomorrow".
    5) If desired, you can contact your bank to find out if they will finance your receivables. Some banks will provide you with cash up front (and charge you a fee) since they know how this process works.
    6) Don't harass your point of contact until the invoice is more than a reasonable amount late. Generally, in a big company, the person who signs the contract doesn't even know the person who actually pays the bill. You want to avoid harassing your point of contact (who is usually your biggest fan) until you really need their help getting the bill paid.
    7) Know your customers' "approval limits". Generally, executives at a large company will have specific approval levels - for maybe $500 they can simply file an expense report; for $2500 they have to file one form with one signature, and for more than that they have to get approval from a VP level person. If you can keep your projects small enough, you can bypass some of the challenges.
    8) Once you've read lots of advice on slashdot and picked a strategy, contact a lawyer before doing anything. Most lawyers will be able to confirm whether your plans follow the law quickly. It'll only cost you a small amount.

    And finally, remember, "managing receivables" is part of the cost of doing business with large companies. Factor it into your project costs.

  • Re:Name and Shame (Score:2, Insightful)

    by frovingslosh (582462) on Sunday December 16, 2012 @03:38PM (#42308465)

    They've been getting a lot of bad press lately so I don't think that will scare them either..

    No sympathy for you if you don't even name them. Sure, you might not shame them into anything by naming them here, but you might help others, and might get a response from someone who knows how to pressure them. As long as what you have to say about them is honest I don't know why you didn't name them.

  • Re:Name and Shame (Score:5, Insightful)

    by im_thatoneguy (819432) on Sunday December 16, 2012 @03:54PM (#42308547)

    You don't even have to sue. We had a 6+ month invoice, we just had our lawyer write up a "final notice" letter letting them know that our lawyer was prepared to sue and we were paid that week.

  • Re:Name and Shame (Score:4, Insightful)

    by houstonbofh (602064) on Sunday December 16, 2012 @03:55PM (#42308549)

    Why is name and shame against US law?

    If it's true it can't well be libel or slander.

    Seriously, I wanna know what stupid law on the books says we can't talk bad about bad companies.

    Citation please?

    The fact that it is true is a defence against a slander or libel suit. Whit the right attorneys, it is a very expensive defence against it.

  • This (Score:5, Insightful)

    by kiwimate (458274) on Sunday December 16, 2012 @03:56PM (#42308557) Journal

    Agreed with most of what Joce640k writes.

    The most likely explanation is not malice, but that the right person hasn't done their goods receipt so A/P can release the funds. Or they made a screw-up, closed a project or a funding source by mistake, and now need to go through three levels of horror and approvals to get the funding back.

    Go and see a lawyer. The charge for the few hours of work will sting but it's surely going to be much less than you're owed. Take careful note of Step 2. Well, ask the lawyer about step 2 and take careful note of what they say. If you can do so, cease your work (hopefully you've got short term work you can get your employees to do in the meantime) and let the client know politely why you're doing so. (Get the lawyer to do it; they're much better at that kind of thing, and they're not going to get emotional. As Joce640k says, businesses are run by grown-ups.) It may feel satisfying to write a screed of anger, but it doesn't get results in the business world. Go out for a drink with a friend and rant to them, if you'll feel better. But be professional in your business dealings.

    If lawyer says you can go ahead and stop working on this contract until things get resolved, then l

    I wouldn't advise approaching the competitor, at least until you've heard the lawyer's opinion (yes, that too could be a breach of contract on your part).

    Don't try the "name and shame" game. As others point out:

    * Beware of libel lawsuits.
    * Where will you go for the "naming" part?
    * ... that will agree to publish (newspapers are afraid of libel too, and it's probably not that interesting as a story, and classifieds in a big paper/commercial site are more expensive than the lawyer option)?
    * ...that's big enough that the company will notice?
    * And even if they notice, they most likely won't care.

  • by Anonymous Coward on Sunday December 16, 2012 @05:18PM (#42308877)

    This is the right thing. You have to be bloody minded, the collections agency specialises in this. If you're a retail company you have internal people for this, and they can be bloody minded, but if you're a little specialist business you barely have a sales guy so you can't afford to have collections people.

    For the collections people this is all they do. They aren't "glad" when somebody pays, any more than you're "glad" when you add an HTML form element to a page. That's just the job. Oh the new computer system isn't working? Don't care, pay me. Head Office is using Oracle eBusiness now and you need to get an approved supplier number before you can process the paperwork? Don't care, pay me. Your boss is sick? Don't care, pay me. We need a signature from a group leader and no-one is sure which is the right group? Don't care, pay me.

    If you're really big you do have another option which is switch stuff off. But it will not work if you are small. If you're British Telecom, and you switch off a company's telephones, they go out of business. Bye bye, next time pay your overdue fucking bill. But if you're Joe Bloggs web design Inc. and you switch off the larger company's web site they will just sue you and hire somebody else, and chances are their PR machine will make you look like the bad guys. Expect the overdue bill to be returned miraculously a day after with some pitiful error pointed out like you mis-capitalised the company name and therefore they "couldn't" pay so now you're the bad guy.

    So, yes, if they don't respond to reasonable demands for payment, send it to collections. If they have good credit and a presence in your country the debt collectors will probably give you a good price. And peace of mind is valuable.

  • Re:Name and Shame (Score:4, Insightful)

    by Anonymous Cowpat (788193) on Sunday December 16, 2012 @05:41PM (#42308989) Journal

    Absolutely agree about writing.

    I've answered telephones in an office. If I don't want to transfer you, you don't get transferred; doubly so if the person you want to be transferred to has specifically told me not to transfer you to them. I was by no means a tyrannical martinet on the phone - there are people who are much more effective gatekeepers than I - any company trying to delaying paying its bills will have employed such people to ward off telephone calls.

  • Re:Name and Shame (Score:5, Insightful)

    by rtb61 (674572) on Sunday December 16, 2012 @05:41PM (#42308993) Homepage

    Now for the real best answer. You have to do some of the stuff "Anonymous" was known to do, with out the rest of the stuff "Anonymous" has been known to do ie. ring around making it sound like you are in the know, to get the right contact information, in accounts payable.

    Problem is you are at a massive distance to the people who decide who gets paid when. In large organisation getting to know the right people, chatting with them, sending Christmas and Birthday cards and presents. Might seem tright and old fashioned but, when you bills are at the smaller end of the scale, the people that sign off on the checks will remember you and you'll be surprised at how far up the payment schedule you can end up, do it right and less than thirty days is the norm. Make a pig out of yourself with lawyers and watch your contracts dry up.

  • Re:Name and Shame (Score:5, Insightful)

    by Dogtanian (588974) on Sunday December 16, 2012 @06:22PM (#42309227) Homepage

    In any case, don't get advice from random people online, get advice from lawyers and debt collectors who know about this sort of thing.

    Well, yeah. To be blunt, the only advice that should be taken on Slashdot for a question like this is from either people in a similar position who have actual experience of this having having happened to them and/or those few posters with an actual solid legal background. And the former's advice should be "this is how it went for me, blah blah, but you should get proper legal advice".

    Too many Slashdotters will come up with "cute-on-paper" sounding ideas (e.g. the name-and-shame idea above) not based on practical experience without understanding the implications in the real world. I've said this many times before, but the problem with many Slashdotters is that they like to think they know how the legal system(s) work when they don't.

    This is because they think the law can be deduced and works in a relatively logical manner, i.e. they (a) think they can deduce how a particular law might work logically because (b) they think that the way the law *should* work is the way that the law *does* work; i.e. that it's both fair and logical. But it's not always that way, and the only way to actually know how the law works is to have learned how the law works properly.

    I've been attacked on more than one occasion for pointing this out, as if my drawing attention to the fact that this is how the (flawed) system works- like it or not- implies that I approve of it, i.e. shooting the messenger. But, yeah; any answers to this question should be taken as pointers from people who've encountered similar situations and what direction to be heading in, and certainly not taken as final legal advice or anything near it.

  • Re:Name and Shame (Score:5, Insightful)

    by L4t3r4lu5 (1216702) on Monday December 17, 2012 @04:38AM (#42312359)
    Why should I have to bribe someone to get my bills paid on time?

    You know this just reinforces the status quo, right? I deserve to be paid on time and in full for the work I do, as stipulated by the contract signed by the client at the beginning of the work. If they think they deserve some special treatment or privilege, then they should stipulate that before the contracts are signed and damn well stick to them. I shouldn't have to send a case of whisky to some bean counter's house just to get a cheque signed.

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