Collecting Fees from Clients
The best way to avoid becoming your own part-time collection agent
is to set up a good system that starts with your very first client
meeting (whether that "meeting" be in person, over the phone, or
via e-mail). You may not eliminate every instance of needing to go
after slow paying clients, but you will at least cut way back on
the need to do so. Try implementing the following system --
** Talk about money during your very first meeting with a new
client. While discussing the project and what you can and will do,
explain clearly your payment terms -- what you charge for and how,
when you require payment, and that you always use a letter of
agreement to be signed by both parties so you both know you are
working from the same page.
** Request payment in advance. Unless it is a very small job of
less than $100, explain that you require one-third or one-half or a
minimum of $xx on deposit (or as a retainer), and that you will
begin work on the project as soon as you receive that deposit.
** Compromise on the amount of the deposit or any other of your
stated terms IF the client provides a good reason for why it would
be impossible for them to comply, and IF it fits within the
"ballpark" parameters you have previously set up in your system,
and IF that client appears to be promising enough to work with.
** Find out their payment chain of command -- who gets the
invoices, how preferred (fax, mail, e-mail), who must approve, who
writes the checks, how long their process usually takes. By knowing
this, you will know when best to get an invoice to whom and how.
** Prepare your Letter of Agreement, once all terms have been
agreed to. Describe your understanding of what you will be
expected to do, when you will have it completed, who must sign off
on approvals and when they will do so, and what your fees will be
for each task or segment of the project and when payment will be
** Begin work when you have exchanged signed copies of your Letter
of Agreement, with any changes agreed to and initialed.
** Invoice on time and when it is to your advantage. If they pay
all invoices on the 10th of the month, don't deliver your invoice
on the 11th or you will wait an extra month to get paid.
** Follow up immediately after a payment is missed. If your terms
were net 30, make your first call on day 31. If it was simply an
oversight, you likely will receive your payment within the week. If
there is a problem, you need to discuss it and work out a plan with
them, plus get in line ahead of the others they are likely not
-- Dana K. Cassell
Copyright CNW Publishing Inc., 2008.