Hacker News Reader

Comment by chasd00 | Hacker News Reader

i've read comments like this before on hackernews. Are the payment terms not on the contract signed? It seems like something you'd really want to understand before starting a project...

View on HN

They generally are, but if you say net 30 and set a % penalty for not paying in net 30 (common), when a multi-billion dollar corporation decides to do net 90 and won't pay the penalty, what are you going to do as a freelancer? Sue them? The amount of money you spend on legal fees would likely be multiples of the penalty fees. And it would delay payment further. Big corporations rely on this power imbalance.

Reminds me of one of my favorite videos on the internet:

"F*ck you, pay me"[1]

In which Mike's lawyer makes the very good point that you should really put an attorney's fees provision in your contracts so that the purchaser pays your legal fees if you need to chase!

[1] https://www.youtube.com/watch?v=jVkLVRt6c1U

yeah, i see your point. I think I fall into the trap of believing what some random piece of papers says always reflects reality. I worked for a large smallbiz ( independent pharmacy chain ) early in my career and it was like pulling teeth to get insurance companies to reimburse/pay on time and correctly despite what the contract said. We had about a dozen people who's only job was to watch them like a hawk and stay engaged with their AP department and nurture a relationship.

It can get much, much worse. We had a customer that set a net-60, it was the first time we landed an "enterprise" type deal and we sort of missed the net-60 part of the contract (I know, lol). So after 2 weeks we called the customer asking if everything was alright and that we hadn't received the payment yet. He let us know that a net-60 doesn't mean they reserving 60 days to pay, it's that they actually pay after 60 days. Well that blew our minds, but we patiently waited the 60 days.. nothing. So we called to their finance department and we got a callcenter worker in a far away country that actually tried to negotiate a 10% discount on our order for a more speedy payment.

In the end they paid 2 weeks after the net-60 expired. Probably calculated to be maximally annoying with the least amount of risk of legal costs. Really takes the wind out of you. Selling to California startup type companies is so much nicer, I once took a call, negotiated a whole new pricing model closed the deal, entered the product details into FastSpring and the customer paid 40k for the yearly subscription on that model that same afternoon.

I wonder how you could word the contract such that failure to pay on time would be onerous enough that the big company would actually move on it. Something like penalties + legal fees + treble damages or something.

Good luck getting $BIGCORP procurement department to sign off on that deal. Favorable seller terms will be immediately redlined.

Ask a lawyer!

Our lawyer told me years ago that you are SOL and therefore to avoid doing business with assholes and to try to acquire leverage over debtors where possible and to expect to lose money once in a while.

I guess it depends upon the type and size of the job in question. A lot of my work is invoiced upon commitment or completion, and in some cases (as with Unilever here) it's simply decided that their terms over-ride that on my invoice somewhere after the event.

I tend to disagree with that mentality.

Reply on news.ycombinator.com