Billing Process Best Practice

How to Get Paid for Your Work in a Timely Manner

43114830_sThis fall I asked readers to share some of the greatest challenges they face at work. Many readers said they struggle with managing payment for their work. Today, I am sharing the payment processes we follow at Spack Consulting to get paid for our work. We’ve used this process for more than a decade and it has become our best practices.

Whenever we prepare a proposal for a new client, we ask for a 50% down payment with the signed agreement and 50% due upon delivery of the study.  Sometimes they push back, but more than ¾ of the time they just send in a check.  On small memos less than $1,000, we’ll also ask for the whole payment with the signed agreement instead of spending time on the traditional billing process. In both scenarios, we’ll get started on the project with a verbal approval but hold delivery until we get payment.  This approach has also tipped us off to developers who aren’t adequately funded.

The above has worked even when we’re subs to architects or site civil firms.  They pass on our proposal to the developer and they pay us directly.  It doesn’t always work out this way, but we prefer to be paid directly by the developer or agency whose commissioning the work.

We also send the final invoice (no matter what the agreed to terms are) as a PDF when we email the draft study and we mail a hard copy to accounts payable at the company to protect against the project manager losing the invoice.

None of this is foolproof – we still need to make calls to follow-up on invoices (which we do once they’re 30 days old).  The pay when paid model is a tough one.  Lastly, we’re not afraid to ask clients at the beginning of a project what we should expect for a payment schedule (Walmart is a tough one because we have to wait months for the whole approval process to work out, but they end up paying more because of this practice).  Bringing it up early helps with later conversations if they set an expectation early on that they’re not following through on.

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