I have been using Twitter to find some great blog postings and articles. This is how I found today's guest blogger, Kelly S. (who needs to know her last name anyway?), aka @KolorKube.

I know we all mediate and do conflict coaching because we love the work we do yet at the sametime accumulating smiles does not pay the bills.

What do you do when parties or clients are not paying?

Enjoy Kelly's suggestions:

Client not paying in a timely manner?
(Originally posted at Kolor Kube Blog
Here)

I work with the awesomest clients but keep running into these payment issues. They get busy in their work and put the payments on a back-burner. It is not their fault but it does hurt our cash flow.

There are a few ways that you can speed up the payment process, making certain clients easier to work with.

1. Payment Plans
A lot of companies have tight finances right now. They’d love to pay off your invoice, but they just wound up over-extended. If you can offer a payment plan, you can make sure that you still get paid. You may not get paid in full immediately, but a payment plan is better than having to keep calling and asking about when your client will be able to pay you.

2. Early Payment Discounts
Some clients just delay to the last moment the invoice is due because it gives them the benefit of having money stay in their accounts just a little longer. If you can offer a benefit for paying an invoice immediately, those clients will remit payment much faster. You may have to raise your prices a little to be able to comfortably offer a discount to any client who pays within a certain number of days of receiving an invoice, but it’s worth it.

3. Late Payment Penalties
There are some clients who just won’t send you a check because there’s no reason for them to get moving. For them, there’s no difference between sending out your money today and next month. A penalty creates a difference: if your client doesn’t pay by the due date, it’s reasonable to request an additional fee for the extra work that goes along with late invoices.

4. Communication
Occasionally, a project will end and a client will unintentionally forget all about you. But if you’ve been in constant communication and suddenly you’re not, an invoice can get lost in the shuffle. Something as simple as following up on a project can guarantee that you stick in a client’s memory.

5. Reminders
Don’t be afraid to send out reminders of invoices to clients. You probably won’t get the best response if you send out a reminder the day after you send your invoice, but as you’re nearing the due date, a reminder can be a good idea. Reminders sent before the due date should probably be worded differently than those sent afterward, however.

6. Escalation
In general, it’s best to keep the billing process polite. But if you have a client who consistently makes payments after they’re due, it’s worth taking the matter to the next step. What that next step is depends: Maybe it’s having a serious discussion with your client. Maybe it’s a matter of not starting the next project until you receive payment for the last. Maybe it’s time to fire the client in question. You have the right to be paid on time, but sometimes you need to drive that fact home with a client.


If you enjoyed this, visit Kelly's site [here] and tell her I sent you :)

Views: 74

Comment by Mark Wilson on February 3, 2011 at 12:36pm
I'm new to the ADR "scene" - as I just began the Master's at Creighton University.  At any rate, is it not common practice to ask for money upfront such as a retainer for mediation services?  It seems like that would be the least confrontational way to ensure payment for services rendered.
Comment by Stephanie Shaul on February 5, 2011 at 8:46pm

Mark,

 

We ask for payment at the time of Mediation.  The clients hourly rate is based on their annual income, so each mediation session fee, is not very pricey; $25.00 - $150.00.  Most people can come up with this amount of money, if they know in advance it is due.   The Mediation session doesn't occur, if the client cannot pay, or does not work out a payment plan with us in advance.

We do have to billl-for-office time, for those cases where we Mediate objections, and have extended time via email or on the phone, beyond the individual or joint session.;  with the adversary or opposing counsel.  This creates another  position  in our office, where we then need a bookkeeper to handle billing, invoicing, statements, collections, etc.  It get's costly. 

Paying at the time of service, has worked well for us for over two years.  I hope it can be a workable solution for others as well.

 

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