Payment before doing a job?

[AustinRacing]

We’re looking for a marketing company to help us with online marketing. Want to do a one month trial to see how it goes and if it works we’ll continue. A company is interested but they want full payment before they do any work. I suggested a deposit and full payment at the completion. They refused, so did we. What do you think re paying in full before any work is done in similar situations. 

[JBChiangRai]

I think paying up front is a problem.

 

They are probably worried that if it doesn’t generate any sales for you that you won’t pay. Maybe they know they have set your expectations too high?

 

I founded a highly specialised marketing company in the UK. Our payment terms were invoice at commencement of work for payment in 30 days. We set customer expectation lower than we knew we could deliver, it’s easier that way and we always got paid.

[CharlieKo]

Nothing to think about. You did right to not go ahead with that company.

[mfd101]

I would interpret that to mean they're a one-horse company with no money behind them. In other words, they simply don't have the capability to work for a month without being funded in advance. Certainly here in Isaan that's pretty normal, where people are dirt poor and not much moves without greasing the wheels.

 

But It may also show a lack of trust which, in Thailand, may be normal.

Edited August 2, 2023 by mfd101

[OneMoreFarang]

19 minutes ago, AustinRacing said:

A company is interested but they want full payment before they do any work.

I think there can be many reasons for that.

It's up to you to look for alternatives and look what kind of payment others expect.

But payment conditions are obviously not directly related to performance. 

 

Personally, I set my payment conditions according to the customer. If I am not sure they will pay me according to my usual conditions, then I ask for advance payment. If they pay, fine. And if they don't pay then at least I can be sure I won't have to chase some payment.

[FritsSikkink]

I wouldn't do business with them, a partly upfront payment is ok but 100% is not going to happen. 

[blackcab]

A lot of it depends on you. If you are an established limited company and they can see this by checking with the DBD then they will be more likely to say yes, subject to a simple contract signed by both parties.

 

If you are not a limited company then it's unlikely they will work without some form of payment in advance.

 

For the first month you might want to break down what they are providing and what you expect delivered into 4 x 1 week blocks and see if they are willing to be paid at the end of each week.

[blackcab]

Moved to the Business forum.

[AustinRacing]

35 minutes ago, blackcab said:

A lot of it depends on you. If you are an established limited company and they can see this by checking with the DBD then they will be more likely to say yes, subject to a simple contract signed by both parties.

 

If you are not a limited company then it's unlikely they will work without some form of payment in advance.

 

For the first month you might want to break down what they are providing and what you expect delivered into 4 x 1 week blocks and see if they are willing to be paid at the end of each week.

Yes we are a limited company with all the documentation. I understand them wanting some assurance that we will pay. For that reason I suggested a deposit. I also told them if they do a good job we will continue to work with them. They wanted full payment before even the first meeting. It just didn’t sit well with me. 

[AustinRacing]

2 hours ago, OneMoreFarang said:

I think there can be many reasons for that.

It's up to you to look for alternatives and look what kind of payment others expect.

But payment conditions are obviously not directly related to performance. 

 

Personally, I set my payment conditions according to the customer. If I am not sure they will pay me according to my usual conditions, then I ask for advance payment. If they pay, fine. And if they don't pay then at least I can be sure I won't have to chase some payment.

I would’ve paid them for the full month irrespective of their performance. After all it was going to be a trial. The continuation would’ve been based on their performance. 

[AustinRacing]

2 hours ago, mfd101 said:

I would interpret that to mean they're a one-horse company with no money behind them. In other words, they simply don't have the capability to work for a month without being funded in advance. Certainly here in Isaan that's pretty normal, where people are dirt poor and not much moves without greasing the wheels.

 

But It may also show a lack of trust which, in Thailand, may be normal.

I see your point. I did offer some payment upfront. The issue is they may be less committed to work hard if they’ve already been paid full in advance. I’ve heard many stories about contractors getting paid in advance and not showing up as agreed. “My mother is sick I can’t come in this week” etc. 

I told them I’m going with another company. It didn’t phase the guy. 

[CharlieH]

Follow your gut it's rarely wrong !

 

No way would I pay full upfront, all kinds of excuses could follow. Stage payments would be a compromise. Complete X get Y build a relationship.

[AustinRacing]

2 hours ago, JBChiangRai said:

I think paying up front is a problem.

 

They are probably worried that if it doesn’t generate any sales for you that you won’t pay. Maybe they know they have set your expectations too high?

 

I founded a highly specialised marketing company in the UK. Our payment terms were invoice at commencement of work for payment in 30 days. We set customer expectation lower than we knew we could deliver, it’s easier that way and we always got paid.

That’s the kind of thing I was expecting and articulated it to them. Their reply was it is their company policy. They contacted us about payments a couple of times so they can set up a meeting to discuss details. Money first in my opinion is not a good way to start a working relationship. Well they lost our business but I don’t think they learn anything from it. Thai tunnel vision mentality with little foresight is something I encounter here too often. 

[OneMoreFarang]

16 minutes ago, AustinRacing said:

I would’ve paid them for the full month irrespective of their performance. After all it was going to be a trial. The continuation would’ve been based on their performance. 

Ok. But did they know that?

I think sometimes we have bad experience with some customers and then we don't want the same experience with new customers. And maybe you reminded them of one of those not paying customers.

I must have nothing to do with you.

[blackcab]

21 minutes ago, AustinRacing said:

Yes we are a limited company with all the documentation. I understand them wanting some assurance that we will pay. For that reason I suggested a deposit. I also told them if they do a good job we will continue to work with them. They wanted full payment before even the first meeting. It just didn’t sit well with me. 

 

To be honest I would have done the same as you. Normally if both parties are sincere you can find a way forward.

 

In this case, I'd look elsewhere. If they are this difficult to deal with now then they could be a nightmare further forward in the relationship.

[JBChiangRai]

The problem with a non-paying customer is the cost and timescale of litigation to collect a debt. 
 

If Thailand had some form of low cost small claims system, then I suspect more companies might accept the risk of a new customer not paying.

 

The reality is, if you don’t to pay and it's a small debt, then you probably don’t need to pay.