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What To Do If Clients Can’t Or Won’t Pay Their Bills?

A wide range of views and views offered by experienced sound company owners and managers

By PSW Staff July 25, 2011

The following is a very useful “thread” from the Live Audio Board (LAB) forum on ProSoundWeb.

Question posted by D.D. Pawley
I know most everyone has had to deal with this sort of issue before. Two sides of the same coin.

What is the generally used policy on deadbeats? Do you wait for em’ to pay? Take them to court? Arrange a mob hit? Give them bad press?

What do you guys do? (I like he mob hit thing, but I don’t know the local mafia chapter.) How is this sort of thing written into a contract?

Second thing. A month ago, a renter dropped my older Peavey board that was out of warranty. He’s a great guy and paid for the minor repair. Works like new.

But what about the guys who break stuff, and don’t pay for replacements? How much of a security deposit is usually asked, and how flexible should our policy be, if the renters are trusted people and they can’t afford rental and security deposits.

The reason I ask, is because I’m having a friend of mine (paralegal) draw up a contract. The info on the workers liability a while back sure helped. But what if your friends help you? Can you be held responsible if they get hurt? Should I make sure they have their own insurance?

I know they can’t sign anything, but is there any way of getting around the union help? I mean, I never have union grade loading/unloading, but it does take time to unload and hook up our usual stuff, and I can’t do it w/only my little bro when the other guys are working.

Reply by Simon Adams
When we did hire (for 30 years) in the later years we simply got a credit card slip signed if they broke it or didn’t bring it back they owned it on expensive things we got a clearance from their bank before letting it go. This made some customers walk away, but we lost a lot less stuff, and if their integrity was solid, they didn’t mind We still do this on appro gear like camera, wireless, etc.

Reply by Hasse Queisser
I had to think I while about this, but here’s my two cents. I have just been in this situation this spring when I lost a rig (don´t count on the police doing squat for you if it happens). I also had a couple of gigs where the client blew a fair amount of speakers.

The best thing is of course to never get any deadbeats to hunt down for money. It takes I while in the business to learn to spot them before they do any harm. I have had my company for almost ten years now, and I´m just getting a hang on it now.

Our policy right now:
1. Cash up front for everyone except official institutions (government, state …) and loyal customers who have never been late yet (this is especially true for clubs and restaurants).
2. If someone is late on payment, cut the credit at once. They will have to earn the trust again.
3. If someone is late, let them know you will hunt them until it´s paid, no matter if it takes you 10 years. Let them know you´ll never drop a debt, EVER. That can make some pay up, understanding they will not get away with it.

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eyewear says

thanks for great post.
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darrensy says

They definitely loose their business. and they will be tag as delinquent.
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jasonlee says

Well, if that is the case, then tendency is bankruptcy is ahead of them.
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jaonna says

Well, if that is the case, then tendency is bankruptcy is ahead of them.
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