Client suggesting to cap off a project

Question

So I have been working with a US based funded startup (atleast that is what I was told initially they had USD 1 million in funding). I started off the project on T&M approach because the app constantly evolved. I bill them weekly (USD 1000). It’s the fourth week now and the client tells me to cap off the project because they don’t have a budget. When I closed the project, they told me to go for a T&M approach and they told me they had funding and would not negotiate because they wanted the best of the work.

Now when the third week payment is due, they tell me the budget was USD 3500 and I am like WTH. They tell me to cap if off at this amount and haven’t paid the third week’s dues.

They liked my work, they have told it to me,I have it written and also a contract in place.

The client asks me what are the ways we can go forward with this budget.

What are my options?

I was supposed to work on both UX and UI design initially but then given the nature of the app, I quickly told them if they want to meet their Thanksgiving deadline, another designer would be required (the app has almost 150+ screens). They agreed to it initially and before closing the project were also of the same opinion that they would be happy to help bring another person to help me out. I suggested, I work on the UX part and make the process agile. They never understood the wireframes and told me we can't understand how the UI would look. So I told them I would make one screen's UI to help them understand what it would look like. I create a clickable prototype in XD, make a video and send it to them. They really like it and tell me they don't understand wireframes and want me to only work on the prototype.

But the thing is with UX a lot of processes need to go in the background to deliver that level of prototype and now they are bringing up the budget issue. And, accusing me that they are paying me for the UI and only getting UX done. I had already made it clear with them in the beginning that without clear user flows, prototypes, and wireframes you can't move to UI. They wanted me to brainstorm about UI too in the beginning which I gave a lot of creative concepts and they loved it. I made the flows, wireframes with sticky notes so that the job becomes easier for the UI designer.

Initially, they told me they understood the difference between UX and UI and agreed we are on the same page and now this shit happens. They still owe me about USD 1200.

Edit: Based on how the things were evolving and changing with flows being altered every other day, they agreed UX alone would take about 6-7 weeks. Also, this app has a huge gamification part for which they required consultation. We told them this is going to take time as we do a lot of testing also at our end.

Answer 1

The approach is simple: until you get paid, work stops. Period.

Let them know you'll start doing work once their payment clears, as they have used their one free late payment (or something similar).

Keep it professional, but be ready to walk away and look for other work. If they are flip-flopping this much this late into a project, it seems to me like they are either scammy (check your previous payments!), or not ready to seriously commit to a project.

Answer 2

Now when the third week payment is due, they tell me the budget was USD 3500 and I am like WTH. They tell me to cap if off at this amount and haven’t paid the third week’s dues.

I would 1.) Not deliver anything until they pay. 2.) After they pay, stop all work. Re-negotiate a higher fee and make sure the new agreement has hefty late fee penalty written into it. If they ask why the price is higher, say you have other clients who pay more & pay on time. The lower price was on the assumption that they would meet their obligations.

Don't feel desperate to work with these guys. The time you spend chasing them for money could be spent finding new clients. If you have that attitude they can't railroad you.

Answer 3

The work you're doing is irrelevant to the question. You should remove that "wall of text" from your question and stick to the crux of the issue.

1. Your client needs to pay you for work performed. Do not perform any additional work until they've paid you for your previous work.

2. Negotiate a new arrangement and fee schedule with the client based on their needs and budget limitations... if you're so inclined to continue performing work for them.

3. If the client doesn't pay for the previous work then send them a demand for payment letter.

4. If the client still does not pay for the previous work you can hire an attorney to help you sue them for payment if you wish to do that.

Answer 4

Think you made a mistake of not signing a contract. It seems there are misunderstandings and mishandling.

firstly, we should not start an offshore project without any agreement. Secondly, before initiation of project we need to provide a prototype for that you can bill them. Thirdly we have to clearly inform the client about no. of manhours, hourly pay, size of the project and size of team required.

Without which if we start any project in Indian and abroad such things will occur. They have lost 3,500 without getting the complete project which is of no use. And you have lost one week's pay.