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E LE CT R I C AL CONNE CT I ON
W I NT E R 2 01 5
DEBT RECOVERY
Settling payment disputes
M
rs Jones seemed nice enough.
She made you cups of coffee.
She inquired as to your family’s
well-being. She shared a joke with you
most days.
That was then. Now you haven’t been
paid in two months, she’s ignoring your
calls and her lawyer-brother-in-law is
threatening to sue you for $450,000.
Welcome to domestic installation.
In recent times we have had a number
of these stories come through the door
and they all have things in common that
contributed to the payment dispute. These
are the saddest stories because they all
start out so well. The parties like each other,
the relations are good, the work seems to
go well, everybody is happy.
Let’s take a closer look at how this all
goes wrong.
RELATIONSHIP
This is perhaps the root cause of most
of your problems. You have allowed the
relationship to get too close. You must
remember that Mrs Jones is your client.
She is not your friend. You have been
engaged to carry out a defined scope of
work for a defined price or rate. You are
not doing someone a favour, or helping a
friend. By letting the relationship cross the
line into friendship you inevitably invite
poor practices into your work that will
cause a payment dispute.
Keep the relationship friendly, but
business-like at all times. Many contractors
are told that they can’t get paid because
the couple who hired him are now getting
divorced. Many contractors have had the
client cry in front of them and feel sorry
for them, then back away from payment.
This happens because the contractor
has allowed the relationship to become
personal. You must insist on payment no
matter what. After all, your own divorce
would not be an excuse for not completing
the contract work, would it?
VARIATIONS
Now, because Mrs Jones is such a
nice person you have most likely done
additional work for little or no cost.
Or maybe you have bought her some
materials at trade prices to be nice (and so
made no money on it!), or maybe you have
done additional work but not bothered to
get it signed off as a variation, because it
seemed too formal for someone so nice.
These are key errors. The biggest cause
of payment disputes in domestic work
is variations. It is very common for clients
to get carried away with extra work
orders only to come crashing to earth
when you invoice them. At this point
they will pick a fight with you and try to
find some reason not to pay you; alleging
defects is common.
To keep this under control, do the
following:
>
Always quote additional work and get
How do you recover payment
from a residential client who
just won’t pay?
Anthony Igra
explains the ins and outs of
getting paid.