Can I retrieve a misdirected payment?

September 2007

"Somehow, a couple of our checks ended up in the wrong envelopes last month, and our ISP was sent a payment for several thousand dollars that was intended for another vendor. Even though the other vendor's name was on the check, the ISP cashed it and gave us a credit for about a year's worth of services. When I finally tracked down the error, the ISP says it won't issue refunds for any reason. Can they get away with this?"

Mike: I can understand a policy of not making nickle-and-dime refunds, but it's bizarre behavior for a company to hang on to a large overpayment (unless they're desperate for cash). My guess is the "policy" here was invented by a low-level employee who misinterpreted a reasonable corporate rule.

To get your money back, you should start by escalating the issue directly to the CFO. Send a letter describing the problem, and include a copy of the check. If that doesn't work, ask your lawyer to draft a standard demand notice, which shouldn't cost you much in legal fees. If your ISP fights back, then you can make a decision about whether to invest further in resolving the problem.

How do I verify a consultant's invoice?

November 2006

"We retained an operations consultant six months ago, and he quoted us a pretty reasonable hourly rate. He's been doing a good job, but I'm beginning to think he's padding his hours. It's awkward at this point to ask him for documentation--kind of like accusing him of theft. What can I do?"

Mike: It's awkward, but you can't keep working with a consultant--or any vendor--when there's a breakdown in trust.

A diplomatic way to deal with this problem is to tell the consultant that your company has decided to standardize billing procedures for *all* its consultants. Explain that from now on, everyone will need to itemize hours worked and tasks completed, by day (or whatever detail you feel you need). In fact, this is a policy you should implement anyway, so write a formal policy memo and circulate it to everyone who uses outside consultants and contractors.

In addition, schedule a regular review meeting at the end of every month with your consultant, before he submits his invoice. Go over what's he's accomplished in the hours he's worked, and don't be shy about asking for more bang for your buck. He'll get the message.