Hi Everybody, Just looking for some guidance on how to navigate the process of enforcing payment of an unpaid debt. I'm sorry for the long-winded post but more information is better than less. I'm sure the problem is quite common.
Firstly, I'm a one man company with an engineering consultancy. I've been in this business for over 30 years. About 5 months ago I was approached by a largish company who had a nasty problem with the electronics module on some of their equipment. These failures are quite embarrassing to the organisation. I spoke to their Senior Engineer by phone and set up a meeting to see first hand what their problem was and whether I could assist them. I informed them that I could look at their modules and attempt to determine the reasons for their failure. I informed the Senior Engineer that I would need some modules and connecting equipment in order to perform some tests. Several days later, the equipment was delivered to my premises.
Next, I was asked to sign a non disclosure agreement and requested some documentation such as schematic diagrams and parts list etc. Unfortunately, there were no schematics, only a wiring diagram. There was also a report conducted by the University regarding the problem but they were not able to identify the cause. I noticed that the company COO and part owner had been copied on these emails. I then set out to trace the board out by hand and identify the components used under my magnifier. I was then able to connect everything up and run the equipment. I informed the Engineer of the progress and told him I was ready to begin analysing the circuit and making measurements.
As part of other emails to and fro I was asked how I like to be paid. It was not possible to provide a cost since I had no answers at this stage and no idea how long it would take. I told him that I'd have a better idea once I've at least located some areas of concern. He appeared to accept this and money was never mentioned again. As it turned out, I'd identified several problem areas that could cause these catastrophic failures the very next day so there was no chance now of any cost blowout. I informed him of my findings. He then asked me if I could provide a report on what I'd found and some ideas on possible remedial action. The report took me about 1.5 days to complete and it was emailed to the Senior Engineer.
He then asked me if I could give him some further information on how the modifications would work and some cost estimates. I provided some basic schematics, theory of operation and an estimated cost of the design and fabrication of the modifications together with an estimate of a cost per module to modify. In total, I spent around 5 days working on this client's problem.
I drafted an invoice for just under $5000 for the work and sent it to the senior engineer. The amount is quite standard in the industry. I became concerned when after two months I hadn't been paid nor received an acknowledgement that I was even in the system. I emailed the Senior Engineer and asked how the invoice was progressing. He informed me that their finance department were having difficulties because no purchase order was raised nor a quote provided. I informed him that I received no indication that these items were required while still receiving work instructions. I reiterated our conversation about the cost and the fact that it was not estimable until some investigation was performed. The problems were discovered the following work day. At no point was there any mention of purchase orders. He agreed with my summation and said he would pass it on to the Financial Controller.
I called the Financial Controller this morning and described the situation. My invoice for the work was fair and reasonable and I was under instructions from a senior person in the organisation. I informed him that the COO / part owner was aware of my involvement. He stated that there was no quote nor a PO. I argued this point with him stating that it was not uncommon in my business to work without one until there is some known point at which costs can be determined or there will be a blowout in costs. Since the whole job took only 5 days and my findings are useful and what was asked of me I see no reason why I should not be paid. Needless to say, he maintained his hard nosed stance even though I have no way of knowing what the internal protocols are of his company. Most insulting, he said that I may have simply done the job out of interest or the possibility of further work and he cannot pay the invoice. I told him that I don't work for free and maintained that I was continually asked to find a solution. He maintains there was no agreement.
I have a reasonable idea of what I should do but not sure on the procedures and technicalities.
1. I understand that I need to send a formal letter of demand. Who do I send this to. I'm unsure If it should be the accounts department the CFO or the owners of the company.
2. Should I be making contact with the owners / CEO and inform them of the situation.
3. Failing a resolution I understand that in NSW there is a small claims court. I can't imagine it being worthwhile pursuing $5000 in a superior court.
4. If I need to take this to the small claims court who do I serve the papers to. The owners, the CFO, Senior Engineer, CEO etc. I'm not so sure which one. It is a private company with 3 part owners but I can confirm via ASIC.
5. During the investigation I noticed that some regulatory testing has not been performed. Do I have some duty to report this to the statutory authorities. Just concerned that I may be held to account if someone is injured.
Thanks to owners of the forum. A great service you have here.
Firstly, I'm a one man company with an engineering consultancy. I've been in this business for over 30 years. About 5 months ago I was approached by a largish company who had a nasty problem with the electronics module on some of their equipment. These failures are quite embarrassing to the organisation. I spoke to their Senior Engineer by phone and set up a meeting to see first hand what their problem was and whether I could assist them. I informed them that I could look at their modules and attempt to determine the reasons for their failure. I informed the Senior Engineer that I would need some modules and connecting equipment in order to perform some tests. Several days later, the equipment was delivered to my premises.
Next, I was asked to sign a non disclosure agreement and requested some documentation such as schematic diagrams and parts list etc. Unfortunately, there were no schematics, only a wiring diagram. There was also a report conducted by the University regarding the problem but they were not able to identify the cause. I noticed that the company COO and part owner had been copied on these emails. I then set out to trace the board out by hand and identify the components used under my magnifier. I was then able to connect everything up and run the equipment. I informed the Engineer of the progress and told him I was ready to begin analysing the circuit and making measurements.
As part of other emails to and fro I was asked how I like to be paid. It was not possible to provide a cost since I had no answers at this stage and no idea how long it would take. I told him that I'd have a better idea once I've at least located some areas of concern. He appeared to accept this and money was never mentioned again. As it turned out, I'd identified several problem areas that could cause these catastrophic failures the very next day so there was no chance now of any cost blowout. I informed him of my findings. He then asked me if I could provide a report on what I'd found and some ideas on possible remedial action. The report took me about 1.5 days to complete and it was emailed to the Senior Engineer.
He then asked me if I could give him some further information on how the modifications would work and some cost estimates. I provided some basic schematics, theory of operation and an estimated cost of the design and fabrication of the modifications together with an estimate of a cost per module to modify. In total, I spent around 5 days working on this client's problem.
I drafted an invoice for just under $5000 for the work and sent it to the senior engineer. The amount is quite standard in the industry. I became concerned when after two months I hadn't been paid nor received an acknowledgement that I was even in the system. I emailed the Senior Engineer and asked how the invoice was progressing. He informed me that their finance department were having difficulties because no purchase order was raised nor a quote provided. I informed him that I received no indication that these items were required while still receiving work instructions. I reiterated our conversation about the cost and the fact that it was not estimable until some investigation was performed. The problems were discovered the following work day. At no point was there any mention of purchase orders. He agreed with my summation and said he would pass it on to the Financial Controller.
I called the Financial Controller this morning and described the situation. My invoice for the work was fair and reasonable and I was under instructions from a senior person in the organisation. I informed him that the COO / part owner was aware of my involvement. He stated that there was no quote nor a PO. I argued this point with him stating that it was not uncommon in my business to work without one until there is some known point at which costs can be determined or there will be a blowout in costs. Since the whole job took only 5 days and my findings are useful and what was asked of me I see no reason why I should not be paid. Needless to say, he maintained his hard nosed stance even though I have no way of knowing what the internal protocols are of his company. Most insulting, he said that I may have simply done the job out of interest or the possibility of further work and he cannot pay the invoice. I told him that I don't work for free and maintained that I was continually asked to find a solution. He maintains there was no agreement.
I have a reasonable idea of what I should do but not sure on the procedures and technicalities.
1. I understand that I need to send a formal letter of demand. Who do I send this to. I'm unsure If it should be the accounts department the CFO or the owners of the company.
2. Should I be making contact with the owners / CEO and inform them of the situation.
3. Failing a resolution I understand that in NSW there is a small claims court. I can't imagine it being worthwhile pursuing $5000 in a superior court.
4. If I need to take this to the small claims court who do I serve the papers to. The owners, the CFO, Senior Engineer, CEO etc. I'm not so sure which one. It is a private company with 3 part owners but I can confirm via ASIC.
5. During the investigation I noticed that some regulatory testing has not been performed. Do I have some duty to report this to the statutory authorities. Just concerned that I may be held to account if someone is injured.
Thanks to owners of the forum. A great service you have here.
