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how to enforce payment?

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how to enforce payment?

Post by nikkili26 on Sun Jun 16, 2013 2:35 pm

I recently got burned on two parties.  This is not fun because I invested money in insurance, as well as made arrangements to stay available for the booked events and even purchased more business cards, thinking I'd be distributing the others.  I didn't mind spending the money when I thought I was being somewhat reimbursed....but now I'm just out about $300. 


I'm thinking about adding a clause about non refundable deposits if cancellation occurs less than a week in advance....

How do I go about enforcing this? Is it possible to ask for 50% of the fee up front, and the rest on arrival?

Should I raise my rates to recoup the loss?  Require a minimum booking of 2 hours? 

Am I being outrageous?  What is normal in booking rates?  I really don't want to go through the preparation again, only to lose money in the long run. (one of them even sought me out a month in advance and kept sending me details though email all month and still canceled at the last minute).
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Re: how to enforce payment?

Post by pinkundies on Sun Jun 16, 2013 4:18 pm

I have a clause in my contract that states cancellation within 48 hours results in the whole party amount being due. I usually contact my clients a day or two before the event to make sure everything is on track and haven't had a problem. Cancellation within a week results in forfeiture of deposit.
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Re: how to enforce payment?

Post by leapinglizards on Sun Jun 16, 2013 4:28 pm

I do 50% deposit, non refundable, to book.

Cancellation less than 7 days before full fee is due.

UNLESS  it is peak season like halloween-  then it is 100% non refundable up front to book.

2 hour Minimum would not be unusual.

Including your requirements would be appropriate and a clause that failure of the client to supply the agreed to requirements will be considered cancellation with full fee being due.  (Inside, adult to supervise kids, no pets- whatever you need)

Evidence of payment upon arrival is not unheard of but some folks get weird about it.

If I have a large corporate client- who are often the worst about paying-  I ask them up front when THEY would be able to pay me.  I then write the contract up for double the agreed to amount, with a 50% discount for paying on time.  Why?  In the state of Fl, if you sue you are entitied to 3 times contract damages plus Ct costs.     If someone is being a jerk about paying me, I point out that if I have to take them to court, they will owe me 3 times, double the amount we agreed to.  I have used this threat twice in 20 years....  both times I had a check in hand within minutes.

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Re: how to enforce payment?

Post by leapinglizards on Sun Jun 16, 2013 4:29 pm

Follow up question:  Did the people say WHY they decided to just refuse to pay you?  Was there any problem?  Did they just skip out?

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Re: how to enforce payment?

Post by TheGildedCat on Sun Jun 16, 2013 7:26 pm

I love you my 50% non-refundable deposit.
And yup, for halloween gigs, it's 100% non-refundable.
Homey don't play that.
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Re: how to enforce payment?

Post by silversky on Sun Jun 16, 2013 10:54 pm

How do you handle it if they cancel and say its due to illness?
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Re: how to enforce payment?

Post by TheGildedCat on Sun Jun 16, 2013 11:24 pm

I *keep* the 50% and they can choose to reschedule. Life happens, I'm not going to penalize someone for getting sick. It happened with a pregnant mom who ended up in the hospital with the flu. Her husband called to cancel and we rescheduled her daughters party when she was feeling better.
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Re: how to enforce payment?

Post by veelux on Sun Jun 16, 2013 11:32 pm

I also do a 50% deposit to book, and so far haven't had people complain.  It also weeds out the ones who hum and haw for weeks trying to decide what they want...I say..send me the deposit so I can book it for you, otherwise I will keep that slot open as we are quite busy this time of year.  I would let them rebook for sickness, but not if they just want to cancel.
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Re: how to enforce payment?

Post by TheGildedCat on Sun Jun 16, 2013 11:42 pm

veelux wrote:I also do a 50% deposit to book, and so far haven't had people complain.  It also weeds out the ones who hum and haw for weeks trying to decide what they want...I say..send me the deposit so I can book it for you, otherwise I will keep that slot open as we are quite busy this time of year.  I would let them rebook for sickness, but not if they just want to cancel.

Yes! I think I borrowed this line from Linda Shrenk or Shannon or one of the other smart peoples in this forum:
"I will hold your date and time for three days. The return of your contract and a 50% deposit will retain the date and time as yours."
Dude that makes people scramble! I have people frantically calling to make sure I didn't give away their date.
The exception to this is if they call to schedule a last minute event. In that case, the 50% retainer is due NOW - and I use SquareUp to take the payment over the phone.
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Re: how to enforce payment?

Post by fairyfox on Mon Jun 17, 2013 12:08 am

I feel your pain- My first birthday party was a $200 affair, and the check bounced. Good news is- three years later, I have never had a problem with another private party payment. Being burned is part of business- but not everyone is out to get you! Smile
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Re: how to enforce payment?

Post by FUNtasy on Mon Jun 17, 2013 12:45 pm

I started having the same disappointment, so now I don`t do any event at least they make a non-refundable deposit.
This is one of the lessons in the learning process
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Re: how to enforce payment?

Post by Tineke on Mon Jun 17, 2013 1:16 pm

I noticed a lot of entertainers are demanding payment in advance... and they actually say there will be no entertainer present if the payment hasn't been received one day before the event.

While I think it's a tad rude, I must say it's also a clever way to not have to wait for months untill they pay your invoice that was due after 10 days
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Re: how to enforce payment?

Post by TheGildedCat on Mon Jun 17, 2013 1:19 pm

I don't know about rude as much as the reality of the world we live in. If I order a piece of furniture, nobody is going to deliver it until it's paid in full. If I want to make payments, that's what a credit card is for.
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Re: how to enforce payment?

Post by Tineke on Mon Jun 17, 2013 2:16 pm

on the other hand, you don't pay the painter untill he's finished painting your porch....
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Re: how to enforce payment?

Post by TheGildedCat on Mon Jun 17, 2013 2:27 pm

This is generally true, though we bought a fixer house in April and have been working with many contractors. Each have a different way of handling payment and some expect to be paid after, some want a credit card number up front. The electrician, the most disorganized one, still hasn't billed us and it's been weeks. Think we'd hire him again or recommend his services? No freaking way.

I guess I wish I could trust people to make good on the promise to pay. Frankly, I just don't and I don't have the money to pursue collections or the time to endure small claims court. My tradeoff for not investing the time or money post-service is to generally collect pre-service. It also saves me from myself. I know I'm going to have a hard time remembering to follow-up with clients post-gig, but that's just me.

Potentially, a 50% non-refundable deposit and collecting the balance at the event might turn some clients off but it hasn't been an issue. I get more gigs than I can currently handle and end up referring a lot of them out to other local painters. You gotta' figure out what works for you! Wink
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Re: how to enforce payment?

Post by Tineke on Mon Jun 17, 2013 2:31 pm

I know, I've been hesitating to do it myself for a couple of years now... I'm probably gonna give it a try soon, since I've got some customers who have a nasty habit of waiting months to pay me....
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Re: how to enforce payment?

Post by TheGildedCat on Mon Jun 17, 2013 4:45 pm

I the few clients I let slide really took it and ran. One HUGE fast food company who shall-not-be-named took so, so long. I think there was an internal snafu on top of dragging their heels, but it was terribly frustrating, especially for a company of it's size and reputation. So now, only the Queen of England gets to net30.
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Re: how to enforce payment?

Post by nikkili26 on Wed Jun 19, 2013 6:51 am

Omg,thAnks for the tips. Trying the contract method asap. Also, it wasn't that they refused payment for work done.they canceled literally an hour before the event!if I had dropped kids off with babysitter already, it'd be an even bigger loss.
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Re: how to enforce payment?

Post by Sandie on Wed Jun 19, 2013 10:00 pm

$50 non-refundable deposit is a must!  I include a reminder on the invoice that their event is not considered booked until deposit is received.  Haven't had a problem since I started doing that.
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Re: how to enforce payment?

Post by leapinglizards on Thu Jun 20, 2013 11:37 am

You never did say-  did the people say WHY they refused to pay?  I mean, was there a complaint, or did you ask for payment and they laughed at you,  or you told them to mail it and they never did and you showed up anyway?

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Re: how to enforce payment?

Post by nikkili26 on Thu Jun 20, 2013 5:02 pm

Leaping lizard, I said they cancelled right before the party. When I was a kid babysitting and the parents canceled, they would still pay me just for holding the date. Yet after investing insurance , New paint,  brushes, sponges, business cards, child care, and gas in the car.....the last party canceled right before the party began.

So now I'm thinking as bad as this is, it could be worse-if I require a deposit to cover my initial investment, what do I do if they refuse to pay once I arrive?
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Re: how to enforce payment?

Post by Gretchen on Thu Jun 20, 2013 6:08 pm

How you handle it really depends on the reason they didn't pay you, so it's hard to really give any advice.  I now require a 50% or at least a $50 deposit before I will save the date, but didn't used to.  If they haven't already handed me a check during the party, after I'm done I thank them for having me, then ask if they have a check/cash for me or if they need to pay via credit card. I carry a Paypal credit card swiper so if they don't have cash they can charge it right there.  Some events I have to invoice them afterward, especially corporate gigs as they have a drawn out payment process.  I LOVE that idea of billing them for twice the amount and giving them a 50% discount for paying on time!  If someone just flat out didn't pay me after sending the invoice, I would repeatedly send them updated invoices weekly with the new finance charges added for late payments.  Or maybe go knock on their door!  ;-)  That is totally unacceptable if you completed a job and they didn't pay.  But again, I'm not sure what really happened??
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Re: how to enforce payment?

Post by leapinglizards on Fri Jun 21, 2013 5:54 am

Sorry I missed the part about them cancelling!   Yes- deposit would have helped.  Good thing is- THAT's an easy fix for the future!

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Re: how to enforce payment?

Post by nikkili26 on Fri Jun 21, 2013 6:14 pm

Well, I ask for pay upon arrival. The last job I worked waited til the end of party. Being the worrier I am, it made me paranoid, especially because it was very obvious they had expected quadruple the kids to arrive....I learned from that to get a contract with terms on it, but I'm wondering if it's legal to make them pay even if I don't paint the planned amount of faces...

I do like the idea of 50% discount for prompt payment, and upfront deposit. I just can't afford another deep investment
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Re: how to enforce payment?

Post by eviedejesus on Fri Jun 21, 2013 11:58 pm

Technically you are not out of money since you will eventually be using the business cards, gas, and insurance. I agree that deposit up front eliminates the flakey ones. I do a 2 hr. party because I don’t want people booking me for 1 hr and trying to cram in more than 10 kids. If I suspect people are expecting more than 20 kids for 2 hrs. - I tell them I will be giving them 20 wrist tickets when I arrive to give out to the kids  - they will immediately say “but what happens if more kids show up than I expect?” that’s when you can tell them a price per each extra kid or tell them to pay for an extra half hr. or hr. 
When you arrive at the event, just get payment out of the way before setting up. YOU are in charge - they need you, people respect people that respect themselves. I refuse to be taken advantage of and if someone finds that rude, oh well. My contract covers everything and I believe communication is the key - I text them a reminder before the event of the key parts of our agreement.
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