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Ask HN: Under quoted, late, no contract unpaid project

6 points by damaru ↗ HN
Hi there, I am learning the hard way how to manage client. I am in the end of a contract, well without any contract, with a client. I quote way under because I wasn't clear on the work that needed to be done. I am really late on delevery of the contract - client is pissed and angry. And I only received part of a security deposit. I probably should have step away from the contract months ago, but I stayed with the process in the feeling that the project was just about to be done.

One major problem that arose, is that the brief for the project wasn't complete. It was in the form of, 'We want that part like it was, but make these change' 'This part leave it as it was working on the site' 'This part you can remove'. So I had to learn the site itself without knowing really what I was doing. Now that site was half broken on it's way out, and now it's not working anymore, so I cannot have the bigger picture.

Now the client wants the site done. I am not sure when it will be done since I don't have a clear image. They don't want to pay until the site is done, I need food so I work on other project at the same time, which makes me a lot slower on delivering on that first project. I invested hundreds of hours on that project, so I feel like walking away would be a huge loss, but the time I spend on this project I cannot spend it on paying project...

That seems the typical, I just started to freelance and getting the learning experience in! What would HN do with that project? The remaining payment is around 10 000$, which is quite substantial for me.

15 comments

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codezero
I'm not a freelancer so my advice may not be practical. Talk to your client, let them know 1) you are committed to finishing the project 2) you don't know how long it will take 3) you want to better understand your client's needs, and in doing so, you can get a better idea of how long it will take.

Let them know that because you are a freelancer, you have other contracts too, so that will be a factor in determining how much time it will take to deliver for them. It's reasonable to say that not having any of the project fee will mean you need to have more parallel projects to pay the bills, and you might see if you can get some amount for work delivered so you can scale off other contracts and dedicate more time to them.

mrmincent
Create a scoping document now. You need to put down on paper what needs to be done.

Find all the emails between you and your client that happened up until you sent the quote to the client. Put any requirements from those emails into your scoping document. That is what you work towards. Send this to the client to sign off on.

Gather any requirements asked for since and put that in a new scoping requirement for releases 2, 3 and 4 if need be. Send these to the client to sign off on.

Explain to the client that you are happy to deliver what is being asked for, but you will need payment on delivery of the first release, and each release after. If you have to split the $10k up over different releases, do so, but explain to them that as the scope of the project has evolved you will have to charge for the extra work that has fallen outside of the original project.

All that said, if you are skipping actual paying work to try and get this to work, you are missing out twice. You have already sunk a lot of time into the project for potentially nothing. Don't skip your baths on the chance that it rains.

tostitos1979
Can you pls point to some good examples of a scoping doc? Do you make the first pass and allow the customer to subsequently edit it? Or is the idea that you don't let customer-like fuzzy language into the document in the first place?
mrmincent
If you can get a copy of software requirements it comes with good examples. If i have the luxury i create visual mockups of everything as that is easiest for clients to understand (I use balsamiq mockups). Once done with the requirements I get the client to go through them to either sign off on them or to send through changes. http://shop.oreilly.com/product/mobile/0790145385512.do
damaru
That's what I was wondering about. Seems like there is a lot of dirty clothes to clean at this point. I sent an email to the client yesterday to sit down and talk, instead of them sending angry email of 'Why isn't this ready- and how about that part - and this part which we never talked about'. Not only that, but there is an intermediary person between me and the company. And there seems to be another intemediary person between her and the 'bosses'.

If I take one thing from that is learning to work 16 hours a day for many days in a row. I am getting tired but at least I know I can put the extra effort when needed, as long as it doesn't stay like that for too long.

mrmincent
Yeah mate at this stage I would work out a timeline for the next six months and if this project can't fit in you're better off getting rid of it. It sucks for everyone involved, but if things are going to carry on the same for the next 6 months you might as well end it sooner rather than later.
johnjlocke
The advice so far is very sound; I will add this as well. In the future, work with a contract, and never work without one again. This first thing to do in future projects is define the scope and make sure that both you and the client are in agreeance on what will be delivered and when for how much.

For this project, the blame is entirely on yourself. That is not meant to be harsh. No contract, you were not clear on what you were doing but took the job and did not set expectations correctly. This is a learning experience - communicate where you are with the project to the client on a regular basis from now on.

_xhok
Future advice: at the beginning, sit down with clients and draw up a comprehensive list of specific features they want created. Quote them for this exact list. Any adjustments, updates, new features, etc.--charge an hourly rate.

Don't feel like a dick charging for every single little feature. An hourly rate guarantees fairness. If the feature only takes ten minutes to add, great, they're only paying ten minutes of cash. If the feature takes longer, you deserve to be paid for that too.

tostitos1979
I lost 2K this way many years ago. Didn't have a contract. I didn't get the money. It was like 2K or something. It felt bad but I got over it. Learned a lesson.

Another freelancer who was there bragged how he had a lawyer on retainer. I didn't get into freelancing much so don't know how good of an idea that is. Would love to hear best practices.

wikwocket
Do you want to walk away from it, or try to complete it? Your post doesn't seem to say, so I'm not sure, but it does sound like a bad situation where it may be in everyone's best interests to move on.

Don't obsess about the time you spent on it. It is a sunk cost; try not to let it bias you against the best course moving forward. Instead you might consider:

1) How much deposit did they make? Can you afford to walk away and return this amount?

2) What is the best case scenario if you proceed? $10k is a lot (although not that much if this is a 250-hour project) but are they likely to pay it? Without a contract?

3) What is the worst case scenario if you stop the project? Are you incorporated, in case this comes to legal action? Feel free to ask a lawyer for a free consultation to find out more.

damaru
My plan is to finish the contract - but not held hostage by it. Trying to find the best solution for everyone.

I can't afford to walk away and give back the deposit at this point. The client seems serious enough to end up paying. I might have high hope as well since they're German (why do I trust them more is probably just a preconceived idea).

The site itself is live and 95% working for the user. There will still be a big part of administration and management that I see coming shortly - which is working as far as I can tell but will be another story when they start managing their site.

I have talked to a lawyer, but at this point I got told, since it was international online business stuff I needed to get a specialize lawyer and would need to put the money down first. We aren't incorporated yet, just moved from freelancer to owning my own business. I am not too worried legally at this point, I am more worried about tears and sweat - and the negeative impact it has on the other part of my business.

Thanks for the comment, it help just to put it out there and see different points of view!

fsk
Another way to look at it is the time spent already is a sunk cost.

Figure out how much time it will take you to finish, and your effective hourly rate to get the remaining $10k. If it's a reasonable hourly rate, go ahead and finish. Otherwise, walk away.

Also, that's why it's better to work hourly rather than fixed-price. That way you avoid arguments when the client increases the scope.

You don't need to always have an airtight contract. What I do is make a limit on how much I'm willing to risk, and once that limit is reached I stop working until I get paid.

ohsnap
Easier said than done but: Fire the client, cut your losses and move on. Be direct - tell him/her that the project wasn't managed right, their expectations are out of line and there is no end in sight.

Don't try to convince your self you can fix the project. Faster you get away the faster you can get new clients that you will be able to manage better.

Also don't panic: everyone learns the hard way to manage clients :)

damaru
I hear you with that. It's hard to let go of something you sunk hundreds of hours. It would be quite healtier to just fire them and move on. It would have a tremendous positive effect on my days on my business.

I am thinking to do it in 2 phases. I am finishing the last wave of update to the site today or tomorrow. From then on I'll let them know as I said to them previously if the want any other update/changes, they have to pay if not the contract is done. At least I give them a bone, and if they pay I am willing to continue the relation.

Yes indeed, it was the hard way to learn to manage client. Although I read about it so many time, I just jumped in hoping it wouldn't be one of those...

saluki
Aside from in the future work with a contract, I would also recommend breaking all projects up in to phases with incremental payments. That way you are satisfied the client is paying and the client can verify they are happy with the work. And you'll find out if there are going to be issues early on.

Sounds like things are getting out of control with this project as far as scope and payments.

I would setup a scope of work in phases for what you quoted initially. Note what is completed. Then setup a reasonable time frame to complete the remaining items along with incremental payments and an initial payment to cover some of the work you completed above the initial deposit.

Be careful with this as far as when you can complete it and how much payment you expect. If things are way more work than they should have been now is the time to ask for extra time/money. And if you can pad your schedule some I would do that as well so you meet all the remaining deadlines to keep them happy and paying.

This will document that you have far exceeded what they have paid for so far . . . in their initial payment.

Once you have this, contact them and let them know you are committed to completing the project this is the time frame and payment schedule you are proposing to make it happen.

If they balk at doing this I would indicate you will send them an invoice for the work completed beyond their initial payment and you'll be happy to provide their next developer with a summary of the status of the project to get them up and running.

Follow up and send them an invoice for the % of work completed. Best case they pay this . . . but this is mainly to allow them to screw you by not paying this invoice and not think about trying to ask for their initial deposit back.

They might not be as mad as you think and just want a cost/time frame for their project so if the scope is out of line you could even propose more fee. To cover items they have added or if the existing app was in bad shape.

You should probably weigh if you'd be happy getting away from this project with just their initial deposit. If so you might want to try to go the invoice for % complete route and move on to other projects.

Good luck.