The great payment squeeze junaidbhura | November 15, 2010 at 1:14 am | Tags: Client Education, Freelancing | Categories: Client Education, Freelancing | URL: http://wp.me/pBOiX-1R

Pay me? Please?

As far as my understanding of services go, one gets paid for services if the client is satisfied with the service offered. A simple connection, and an exchange of synergies. I'm not sure if it is 'customary' here in India to not ask for money after a service is rendered, but people squirm where they stand when faced with the moment of sorting out finances. Sometimes, and usually the side which owes money gets offended at this 'impolite and inconsiderate gesture' on the part of the service provider. Or I could just be imagining things. I do have a very active imagination.

Whatever the cause, Indian companies, particularly media agencies and other service providers with no tangible products seem to find it difficult to make their clients pay them. This fact caught me by surprise because these agencies are in no way small-time. Quite the contrary, these were established firms with big clients.

Now since there are no funds to go around, it obviously affects the company both in-house and otherwise. Freelancers and vendors get caught in the crossfire, which is extremely unfair, because they are independently functioning businesses.

What I find hard to understand is why these agencies hire services when they are unsure of clearing payments for them. Or rather, with what nerve. The thought process that sparks this kind of behavior is a mystery to me, unless, there is something sinister going on in the background. Again, it could be my active imagination, but maybe... Just maybe.. They don't really give a crap!

With this lack of empathy and basic business etiquette, a very unhealthy atmosphere is created for all involved. There would need to be a kind of buffer at every level of involvement. The freelancer needs to set a buffer because the client has a history of not paying on time. The client would need to set a buffer because their clients never pay on time, and so on.

I have recently changed my policies to reflect this, where I specifically mention that my client's payment to me is independent of their clients' obligation to pay them. I think it would be best if all companies had this term clearly outlined in their contracts, especially if they plan to outsource a certain part, or all of the service.

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