We did development for a big company as a way to get money while we grow our product. It’s been 6 months and, in spite of having a contract, they haven’t paid. And I think they never will. The worst part: I already paid 20k in taxes over this contract.

Please explain why you had to pay taxes on unbooked/unrealized revenue?

dana says:

May 16, 2014 at 9:08 pm

+1

Reply
- Anonymous says:
  
  May 16, 2014 at 9:49 pm
  
  Because that’s the way it works in my country. You pay the taxes whenever you make a bill, not when you actually collect the money. Some people stall the payment up until they get paid, but that carries interests, and ir could lead to being audited by our version of the IRS. The worse part is that you have to pay taxes to the Federal and the Local governments, so it amounts for a lot of money.
  
  Since we had a contract, and they are a really big corporation, it made sense to assume they would pay in time.
  
  Reply

Should’ve done net 15 with 50% estimated up front.

Anonymous says:

May 16, 2014 at 9:50 pm

I did, 15% upfront. That they paid in time.

Reply
- Anonymous says:
  
  May 18, 2014 at 12:20 am
  
  So why’d you continue working when they didn’t continue paying?
  
  Reply

Seems like there is something missing here. Why didn’t they pay you? Was there a disagreement over the deliverables?

Anonymous says:

May 16, 2014 at 9:51 pm

No, we delivered in time. I even have an e-mail from the director of the department we made the project for praising us for the good work and the fact that we stood up to the timetable.

Reply

Does your country have lawyers that work on contingency? Perhaps you can find a lawyer who can sue and if you win your lawyer collects a portion of the proceeds.

Anonymous says:

May 17, 2014 at 1:06 am

Haha, of course, we have judges and everything (just a stupid ass taxation system). I have a good lawyer, but I’m debating myself whether the burden of a taking legal actions isn’t worse than just accepting we were screwed and move on.

Reply
- Anonymous says:
  
  May 17, 2014 at 2:28 pm
  
  Not so much a question of judges, just about whether you had lawyers that would work on a success basis so you don’t have to front the cash. That said if you’re debating if it’s even worthwhile then the deal may not be large enough to warrant the time and expense in pursuing it. My guess is that this is what the larger company is betting on. Sucks to get screwed this way. Sorry to hear it.
  
  Reply

Can you out the company so the same thing does not happen to others?

Honestly, I smell bullshit. Either they were a bad company to do business with and you should have had that sense from day 1, or you mistepped in delivery. Be honest with yourself and make zero excuses.

Fucking sue them.

Could you sell their debt to a collections agency? Some businesses specialize in buying others debt (for a cut of the total amount) and collecting on it. Why not let someone else hound them for the money. Of course you’d take a hit on the amount owed, just like with hiring an attorney, but it may be less than all the legal wrangling.

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