London based start-up Crowdmix Ltd was in the process of developing a social media music platform. But before it could even launch its product fully, it ran out of money despite having previously raised £14 million in funding.
As of Monday 11 July, 2016, it has left its creditors, many of them freelance contractors, tens if not hundreds of thousands of pounds out of pocket. If you’re owed money by Crowdmix the prognosis for recovery is not good, so let’s look at what happens next.
The Professional Contractors Group have called for an anonymous hotline to be created, allowing small business owners to 'name and shame' large companies that pay late or otherwise try to use their 'brand power' to manipulate payment terms.
While the PCG are calling it a 'witness protection' hotline, we prefer to call it Slimeshoppers, as it doesn't get much lower than a big business trying to use their size as an excuse to withhold payment to small suppliers.
We regularly speak to Freelancers and Contractors who are uncertain on how to handle the credit control process after an invoice has been issued. Credit Control (occasionally called "Dunning") is no black art and it is simply a mix of common sense and a considered approach to ensuring any monies are paid in full and on time.
Below you will find an easy to understand infographic outlining a suggested process for any contractor issuing invoices on 30 day terms. If your business terms are longer or shorter then just adjust the steps below to suit your client.
Following on from part one "Going Dutch: Contractor Debt Recovery in the Netherlands" we speak to Alex Tucker, the contractor who found himself at loggerheads with the Dutch agency and find out more about what brought him to this point.
Working for overseas clients is either a gamble, or a logical expansion, depending on which way you look at it - but as a self-employed contractor, you need to be confident that you will be paid promptly, as international debts can be more difficult to pursue.
A recent client handled by Safe Collections demonstrates this well; Alex Tucker had every reason to expect prompt settlement of his invoices by his Dutch client. He had worked with the company, both as a self-employed individual and as temporary staff, since 2005, as well as supplying services via a third-party limited company.