[consulting] Proper Collections Procedure

[Gunnar Langemark]

Larry Garfield wrote:
> After the spec is finalized, there's a billing milestone.  Work does not 
> continue until it's paid.
>   
Right  but - Reality usually kicks in at this point, and you continue 
working while waiting for the money. So give them short payment terms. 8 
days or so.
(OK - I'm not in the US, but in Europe (Denmark)). I payment is late - 
work is too. Unless of course they have a good explanation (could they 
have?).

Many consultants and developers hesitate to talk about money (at least 
here in my country it is some kind of tabooish thing), and some clients 
take advantage of it. Money talk is ok!

If you don't like to/are able to - get paid before you start working - 
you need to get paid for the specs. That is important, because it is 
work you've done, and because it will give you an idea about the clients 
behaviour.
Be sure that things are not always as they seem. Some clients seem easy 
in the beginning. They behave as if we agree on everything, and then 
later they're annoyed that you did not deliver exactly what they thought 
it would be. Even if they never let you suspect that would happen. Other 
clients are a big pain in the a.. in the beginning, and then it turns 
out, that it is because they actually took charge and ownership of the 
project, and they know exactly what they want - so if you deliver that 
they will be happy. Clients starting out easy - may be your worst 
nightmare. Simple psychology.
> After the beta is released, there's a billing milestone.  Work does not 
> continue until it's paid.
>   
Very important. Now you've delivered on the specs (in your own opinion) 
and are finished with the project if everything is ok (which it never is 
- but anyway). This is where you need WRITTEN consent from the client. 
Make sure there's a milestone in the agreed upon contract - or at least 
some sort of written - e-mail is better than nothing - agreement that 
when you deliver something which resembles the specs - you get some money.
You need to get paid at least partially for the work you've done - even 
if it does not fulfill the expectations of the client 100%. Make that 
clear from the start.

> After the final release, there's a billing milestone.  Presumably if you got 
> here, they're good for the money. :-)
>   
This is probably 30-50% of the total payment. And you need to make the 
client satisfied with what he has got. To accomplish that - you need to 
communicate with your clients along the way, making sure he agrees that 
the requirements in the spec. are met. Actually it pays to get them 
little by little along the way. Only disadvantage is that if you 
communicate a lot with the client you give him the chance to try to 
change his requirements. If you can handle that (have a policy of 
written "change request" for it) you're better off in the end. If you 
can't handle that ongoing communication, make sure to have a meeting 
where you take charge - and walk the client through all the 
requirements. This is a crucial meeting. It is best for you to have his 
signature on the specs list immediately after walking through. He will 
probably hesitate, but if you make it clear that his signature is the 
goal of the meeting, it should work. At least if you have the balls to 
hand him the pen, and point to the line where his signature should be!
:-)
No it's not so much fun. Not as much fun as building the site. But it 
sure is fun when you see the money on your bank account.

Reality Check: No I don't always follow these rules. No I don't always 
get to do only what I anticipated. No I don't always think I have full 
control. No not all projects are big enough to have all that paperwork. 
So I try to take it easy and calm down sometimes. Or else I get all 
tight up and stressed.

Best
Gunnar

> What breakdown and milestones you use will depend on your situation, work 
> process, clients, etc, but the concept itself is sound.  Bill in stages.
>