[consulting] being a listed consultant

[George D. DeMet]

All of Roshan's points are really great.  We've never taken Paypal, but 
I can vouch for wire transfers as a safe, secure, and speedy method of 
payment.

The bottom line is that it comes down to judging each new client as they 
come in, and if it looks like it might be a risky situation, adjusting 
your terms accordingly. 

For most of our clients, we ask for 1/3 payment upon acceptance of the 
proposal, 1/3 payment at delivery of a fully-functional "beta" site, and 
the final 1/3 is billed when the site is launched.  If it is a 
particularly large job that will tie up our company's resources and 
prevent us from taking other work during development, we will sometimes 
ask to bill monthly during project development in order to keep our cash 
flow steady.  In every case, client service, training, support, and 
actual project development are separate line items in our proposal, and 
we always include a clause that expansions in project scope or requests 
for additional features during development will be subject to change orders.

Our experience is that the larger the organization you're working for, 
the longer it takes to get paid.  Small businesses are very familiar 
with the challenges posed when clients don't pay on time, and usually 
respond to invoices very quickly (net15 or less).  Larger companies and 
institutions are far less responsive, and it can take 45 days or more 
for payment to trickle through multiple layers of bureaucracy.  
Publicly-funded institutions are invariably the ones that longest to 
pay.  I definitely recommending getting a purchase order from larger 
clients whenever possible, as invoices issued against a PO get processed 
much more quickly.

We have occasionally taken jobs from potentially "risky" clients, and 
our strategy with them has usually been to ask for a larger payment up 
front and/or adjust the payment terms so that work is billed more 
frequently.  That way, if the client skips town, the amount of money 
we're potentially out is minimized.  Project milestones can also be tied 
to payment; e.g., project development does not start until we've 
received the deposit payment, the site does not launch until we've 
received payment for beta development, etc.  The more money a client has 
paid, the more invested they are in seeing the project through to 
completion.  In no case do we ever take a job where the client says, 
"Oh, I don't have the cash on me now, but I'll make so much money when 
this site launches that I'll pay you then."

As far as freelancers go, we always commit to pay them, even if the 
client does not pay us.  We consider hiring freelancers part of our 
project overhead, and if they've spent time working on one of our 
projects, they should be compensated for that work.  This can be a tough 
commitment to make sometime, but in our experience it's the best way of 
attracting the best freelance talent.

-- 
George D. DeMet
Palantir.net
1601 Simpson Street
Evanston IL 60201
p 847.328.7150
f 847.328.2211
demet at palantir.net