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patio11's profile
Patrick McKenzie
Patrick McKenzie
Patrick McKenzie
@patio11

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Patrick McKenzie

@patio11

I work for the Internet, at @stripe, mostly on accelerating startups. Opinions here are my own.

東京都 Tokyo
kalzumeus.com
Joined February 2009

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    Patrick McKenzie‏ @patio11 Apr 6
    • Report Tweet
    • Report NetzDG Violation

    I saw a freelancer post that a client sent them a "We're not paying invoices due to [the economic environment]" notice. I won't link to it due to my no shaming policy. The responses from freelancers to this are fairly predictable. I have some slightly different ones:

    8:05 PM - 6 Apr 2020
    • 86 Retweets
    • 560 Likes
    • will minshew Ergest Xheblati 🦊 . Eman Zabi 🚀 P. Michael Holland ダークソール Scott Nixon ᛯ 🤖💾💻 . Daniel Houck
    15 replies 86 retweets 560 likes
      1. New conversation
      2. Patrick McKenzie‏ @patio11 Apr 6
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        • Report NetzDG Violation

        This is not a refusal to pay. It *says* it is a refusal to pay, in the same sense that I might *say* that I need $X to do some particular thing, but these are steps in a negotiation rather than absolute positions. You can't take it at 100% face value.

        2 replies 4 retweets 113 likes
        Show this thread
      3. Patrick McKenzie‏ @patio11 Apr 6
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        The right response to this is probably "I have received your letter. The invoice is good. I demand payment by the date on the invoice, under the terms of our contract." Most people sending that demand *will likely be paid.*

        6 replies 12 retweets 257 likes
        Show this thread
      4. Patrick McKenzie‏ @patio11 Apr 6
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        This behavior is so common there is a word for it among consultancies. It is "slow rolling." If the client is in a cash flow crunch, and you can imagine a lot of clients in cash flow crunch right now, slow rolling allows them to prioritize accounts receivable & buys time.

        2 replies 9 retweets 136 likes
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      5. Patrick McKenzie‏ @patio11 Apr 6
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        Many freelancers are extremely offended by slow rolling. As a former consultant, I get it, but you can't afford to think like an employee when you're running a business. You should do what all the "real" businesses did when they got that letter; treat it as a nullity and move on.

        6 replies 13 retweets 185 likes
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      6. Patrick McKenzie‏ @patio11 Apr 6
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        There are backstopping options here. It is important for businesses to understand that credit risk *is a very real thing* and that there are, at this moment, some companies which have been extended trade credit by firms like yours which will not be able to service that debt.

        1 reply 2 retweets 59 likes
        Show this thread
      7. Patrick McKenzie‏ @patio11 Apr 6
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        Your chief recourse to that is charging more, because you bake credit risk into the expenses of your business, and if a client goes out of business on you between invoicing and receiving payment you grimace a bit, chalk it up to credit losses, and move on with your life.

        4 replies 4 retweets 115 likes
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      8. Patrick McKenzie‏ @patio11 Apr 6
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        But a client simply not paying today is, well, Tuesday. Stop work, send letter, escalate as per your usual collection efforts. If you do not want to deal with this hassle, that is a reasonable preference. You will enjoy being an employee more than you will running a business.

        4 replies 2 retweets 155 likes
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      9. Patrick McKenzie‏ @patio11 Apr 6
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        Psst if this is a material amount of money for your firm you *may* want to look at your business insurance policy because this is conceivably a covered risk given the circumstances, though expect that to also be a negotiation between you and your insurance carrier.

        3 replies 1 retweet 66 likes
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      10. Patrick McKenzie‏ @patio11 Apr 6
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        In *that* negotiation it is may be helpful to you that the client has sent you a letter re: coronavirus or government-ordered shutdown because plausibly those are covered ("business interruption", etc) where "I'm a bozo and not paying" is probably not a covered risk.

        1 reply 0 retweets 66 likes
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      11. Patrick McKenzie‏ @patio11 Apr 6
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        Note that it is entirely possible the insurance company says "Coronavirus is not a covered risk; check your policy" and that is *also* perhaps more a negotiating position than it is a true statement about what your policy does and does not cover.

        1 reply 0 retweets 72 likes
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      12. Patrick McKenzie‏ @patio11 Apr 6
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        "Coronavirus! No!" "Business interruption at direct customer caused by government action. Yes!" "Has to be incident to physical damage. No!" "Customer site coated in lethal biohazard. Pay or have your lawyer suit up." *check quietly arrives* (Only worth your time if $$$.)

        6 replies 3 retweets 116 likes
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      13. End of conversation

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