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Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Purchase orders again....

About 10% of our sales are handled by a certain payment processor, which is part of a rather famous (infamous) company that owns several companies all of which are in the business of software reselling and payment processing. This payment processor allows the option of checking a box according to whether you want to accept purchase orders through them. We unchecked that box years ago.

Well we had a big order from a quasi government department and for them we temporarily turned on accepting purchase orders again through this payment processor.

Well apart from the usual delays they did pay in the end. The larger amount of money from the sale was nice.

That is not the problem. The problem is for a few weeks the box was ticked allowing this payment processor to accept purchase orders.

A well known software reseller submitted a purchase order just for 1 rather inexpensive software license. As soon as they did we unticked the box to stop other people doing so later.

Of course we sent them a temporary registration key.

However it seems this software reseller is slow to pay. They keep demanding invoices are resent and saying they never receive them. Despite sleeping for months when it comes time to pay they blame us for not accepting a wider range of payment options!

All in all months have gone by and I've have quickly counted up the number of emails sent about this and it is around 30!

The vast majority of our orders are via our web page and almost instantaneous.

As the end-user is keep having to request replacement temporary keys, it seems this software reseller (and they are a major, well known one) just doesn't care about annoying software developers and their clients.

I am just speechless. This is not good. It just wastes everyones' time.
AnonForNow Send private email
Sunday, October 12, 2014
Bunch of topics here, I'll pick one, how to deal with no payment from customer.

What kills you with this is having to send out new requests for payment over and over. Each time you do you get angry and go through a thought process that is emotionally draining, isn't that right?

The key is to avoid going through this, while still applying pressure so they go through it instead.

The non-paying customer's game is that they can starve out a lot of people by wearing them down oven time until they give up.

It's a game of patience.

To win, you do this. Set aside a whole day. Write a series of 15 letters requesting payment. Make them start polite, and gradually get more insistent, just making small changes. Make some long, others short. Towards the end, start including a table with history of previous letters sent and a column to check there was no reply, or an inadequate reply, or a promise of payment by some named person.

These are your forms for the future, so this is an investment that will pay off over the years.

When someone won't pay, mail merge the forms and print out all 15 and 15 addressed envelopes. They will have dates a week apart, in the future.

Then, each Monday, you send out the next envelope. If you have tables that rely on previous results, you can hand fill in those.

Now you only spend 2 minutes a week on this.

And they will get these letters.

And after 8 weeks, start sending them registered mail.
Scott Send private email
Sunday, October 12, 2014
Also, after 15 weeks and no payment I have on several occasions driven or flown to their location and sat in their front office day after day requesting to see them about payment. If they see me and don't pay, I come back the next day. On weekends, I parked in front of their house and sat there and read novels.

Did this once for an entire month to get paid $500. Waste of time and money, and they knew it. But I got paid.

Now I am very far away from nearly all my customers and have an international base, so there's no point to doing this. But if the customer is local to your area you might consider appearing in person every single day.
Scott Send private email
Sunday, October 12, 2014
I think you can try other company, some smaller one but responsible one.
feelapi Send private email
Sunday, October 12, 2014
>A well known software reseller

You could start by naming and shaming them here.

I tried to get these people to pay in advance by credit card. Someones I let them submit a purchase order. but if they don't pay within 30 days then they have to pay in advance next time.
Andy Brice Send private email
Monday, October 13, 2014
It's too late now, but it's not hard to accept purchase orders yourself. No need to use your normal payment processor (and for them to take their cut for making everything harder!)

Here's what I do:
1. Tell customer you will accept purchase orders.  They will email or fax one to you

2. Create a nice looking Invoice document in Word.  Fill in all of the particulars, company, products purchased, etc.  Be SURE to have a place where you show THEIR purchase order number.

3. Send them the invoice along with whatever they bought.  I send it electronically (PDF) and print it out and mail it.  If their address doesn't show it, I add Attn: Accounts Payable to the address.

4. Have a folder where you keep all outstanding invoices.  When payment is received, remove the invoice from that folder.

5. Once a month or so, look at invoices that are too old (more than 90 days?).  Add a big red late notice to the top of the document and mail it again.  At this point I move it to a new folder ("90-days late notice sent"). 

It's very little hassle.  The only downside might be if you need to handle tax payments which the service provider would have done for you.
Doug Send private email
Monday, October 13, 2014
I nearly always issue temporary license keys for purchase orders, the customer soon sorts the problem out when their systems stop working.
Ducknald Don Send private email
Monday, October 13, 2014
IANAL, but I think that technically the actual user of your software is not even your customer, as you were not paid within the time frame stipulated on the PO.

Why don't you tell that end customer that there will be no more temporary keys unless their reseller pays you?

After a couple of really bad late payment incidents, we have established a strict "Delivery after payment" policy. No temporary licenses or anything. Reputable resellers have no problem with paying us up front and charging their customers a premium to recover all those payment chasing costs.
Dmitry Leskov Send private email
Tuesday, October 14, 2014
I'm confused by one thing - is this subscription software that they have to continually pay for?  If not, is there a reason that with a "purchase order" client you sent them the software before they paid?

I like everyone's ideas.  My thought is that they don't get the software, or it times out, until the check has cashed and cleared. (If you ever take PO again in the future.)  In their case, if there is any way to have it stop working when payment is late, I would do that.  I would even go so far as to send an "update" that includes the time out if they don't pay, and hopefully they'll replace the current version with that one. 

I guess the situation is not so simple though or you probably would have sent time-out software to begin with.

If/when they ever call for tech support - be merciless if their payment is not up to date.
Emily Jones Send private email
Friday, October 24, 2014
Emily, we only sent them temporary registration keys. In fact they are on their third temporary key now.

The software will have stopped working now.

My original post was frustration that a software reseller could waste so much of our time. In fact I counted all the emails about this and it is 40!!!

They sent us 40 emails all about excuses why they can't pay us. They are a local subsidiary of a large, international software reseller.

Instead of realizing they have to accept our rules about payment, they took over 3 months saying it is their way or nothing. So they got nothing, because they in turn purchased through another reseller that asks for payment in a way they refuse to pay.

I told them they could have the full registration key in all of 30 seconds if they purchase using our web page. But they refuse to do what thousands of other people have done.

They have wasted hours of our time and for no money.

We are not going to give them anymore temporary keys, nor are we going to correspond further with them.
AnonForNow Send private email
Sunday, October 26, 2014

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