[markyb76]

All of our commercial clients are on a 12 month contract, the quote I provide initially is a yearly cost to them. I then invoice monthly dividing the yearly cost by 12, so every month they pay the same, regardless of the days/weeks in the month.

One of our clients over Christmas (who is on this type of contract) asked for only 2 visits instead of the usual 6 during that time and is now refusing to pay the normal invoice cost as "not as much work has been done". I have tried to explain that they pay the same amount every month regardless of days/weeks in the month as we quoted and subsequently signed a 12 month contract, but they won't have it - Any suggestions??!!!

[Pristine Clean]

Depends on how strong your written contract would hold up in court. That is if you wanted to take it that far.

I understand what they are saying, I also know that you could lose this customer just for the sake of a few days pay.

It really depends on your relationship with the customer. And from your post I would say be prepared to lose it on renewal.

This is a hard situation to be in. You have to way it up with the pros and cons. If they are a good customer and put work your way and are flexible then let them off.

We are lucky I have and my staff have a really good relationship and though experience we know who to let go and whpo to hang on to.

Best of luck, there maybe someone here that could advise better.

Dave

[Nick Head]

Dave is right - it does depend on your contract and how clear it is that you divide the annual cost over 12 monthly payments.

From my experence meeting with your client to explain face to face is always the best option and often sort out these issues.

Happy to advise further if necessary

Nick

[markyb76]

Thanks for both responses.

They are a good client and one worth keeping. I have suggested to meet up this week with them to discuss so I'm sure that will happen, just guess I'm interested in whether having contracts written and invoiced in this way is common and correct.

[Andy Foster]

Good advice, I have had to bite my lip a few times with solid customers and it still hurts now.

What you could do its suggest that the whole amount be paid up front for the year next time so that uncomfortable situations are avoided.

Alternatively, have a clause written into any new contract which states that either they pay the same regardless of the visits (if of course they cancel them and not you) or that they have the option to cancel up to 4 visits in any 12 month period (or whatever) and that the relative costs of these cancelled visits would be deducted from the appropriate month's invoice.

Basically, as long as both sides are happy with the arrangement then there shouldn't be any problems.

Hope it all works out for you.

Andy

[Gilbert Sprous]

I had this problem last year.  I lost the client, but I was not really bothered.  I started the contract in November, the place was a mess and I personally put in the extra hours to get it up to scratch.  But when Christmas shutdown came, he refused to pay, stated that there was two cleans missed and he should not have to pay for that.  I showed him in his contract where it states that all shut downs are taken into consideration of the quote, but he still was not having it.  I told him that I still have to force my staff to take holidays or unpaid during that time which means they would have to take their holidays during another time and I would have to provide cover at my expense, he still was not having it.  He even pulled over my staff and asked them a lot of questions, like did you get your full pay during the holidays, which of course they replied yes.  And still he was not going to pay, he said he did not care what the contract states, he was not paying for a service he did not recieve.  If I intended to charge him he would terminate the contract right away without regard to a notice period.  Losing that contract was one thing but what really bothered me was that he was the Master Franchisor for two other contracts that I held.  But I stood my ground mainly because if something as small as this would actually stand in his way this much, how would he react to something else.  I decided it was better to cut ties with him.  I called him personally, and made him feel pretty small.  With the cost of a court proceeding not to mention my time I did not want to pursue the matter.  I did let him know that it was not about the contract it was about integrity and doing the right thing.  I told him he was more than welcome to rip up the contract as I refused to conduct anymore business with him.  The other franchisor that I have the contracts thought it was pretty funny in the end and knew that he deserved it.  I still have their contracts to this day.

Saying that I have new contracts this year and I have just sent out my invoices so I will see how it goes this year.  But I do not think any of the old clients will say anything, as I said it is in my T and C's that any shut downs are taken into considration.  If it was a customer that I wanted to keep it would be a little harder issue.  One thing I did last year after the incident, and only for the two franchises was I told them maybe I was not clear enough on the issue and I lowered thier monthly price by 3% which makes up for the closures, and I am still able to budget for holiday pay.  I think it was 3% but if you do the math you will find it is not that much of a difference and the client sees it when you lower the price.

I hope this helps a bit.

Gilbert