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David G. Axt, CCS, CSI ,SCIP
Senior Member
Username: david_axt

Post Number: 1358
Registered: 03-2002


Posted on Friday, June 06, 2014 - 01:17 pm:   Edit PostDelete PostPrint Post

Independent consultants: What is your advice on getting paid promptly?
David G. Axt, CCS, CSI, SCIP
Specifications Consultant/Web Publisher
www.localproductreps.com
Lynn Javoroski FCSI CCS LEEDŽ AP SCIP Affiliate
Senior Member
Username: lynn_javoroski

Post Number: 1824
Registered: 07-2002


Posted on Friday, June 06, 2014 - 01:31 pm:   Edit PostDelete PostPrint Post

A really big ex-footballer line-backer type friend? (But then, I'm in-house)
Robert E. Woodburn, AIA, CSI, CCS, CCCA
Senior Member
Username: bob_woodburn

Post Number: 84
Registered: 11-2010
Posted on Friday, June 06, 2014 - 01:35 pm:   Edit PostDelete PostPrint Post

Sorry, I can't think of much that would help. (That's one of the reasons I've been an in-house specifier for the last 12 years, after 11 years as an independent...)
David J. Wyatt, CDT
Senior Member
Username: david_j_wyatt_cdt

Post Number: 85
Registered: 03-2011
Posted on Friday, June 06, 2014 - 01:57 pm:   Edit PostDelete PostPrint Post

Here are a couple of observations based on my past life as an independent.

First, have open discussions with prospective clients about your payment expectations before you propose fees for projects. Ascertain if they operate on a pay-if-paid basis or not.

Be willing to offer discounts for fast payment. To me, fast means within two weeks of delivery of documents.

If you don't get a good feeling from these discussions, try to walk away. I know it's hard to walk away from an opportunity when you need the work, but if you exhibit strength and discretion at the outset, you will foster an atmosphere of respect.

The likelihood of getting paid promptly tends to diminish when:

- The client is so far away you can't get in good face time with the project manager

- The design stages are lengthy

- The owner has a large national or international presence.

My best, fastest payers tended to be lean, efficient architectural firms working for local owners. Try to cultivate those relationships.

If I experienced slow payment (45 days or more), I would build a nuisance contingency into my fee for the next project.

With two slow payers, I provided paper copies rather than word or pdf documents for review sets. Each page had a visible watermark indicating they were review sets not for construction. I wouldn't turn over the 100 percent cd sets until I had assurance I would receive payment in a reasonable time frame. If I got stiffed, I wouldn't work for them again. Believe me, there aren't so many good spec writers around that they can afford to treat you badly.
Jeffrey Wilson CSI CCS
Senior Member
Username: wilsonconsulting

Post Number: 142
Registered: 03-2006
Posted on Friday, June 06, 2014 - 02:09 pm:   Edit PostDelete PostPrint Post

My advice: Forget about it -- I haven't found anything that will induce architects or other clients to pay promptly. They are not receiving prompt payments in most cases, so they aren't likely to make timely payments to their subconsultants.

My agreements include a clause that requires them to pay invoices within 10 days of receiving payment from their client, which most will gladly do. I also include a 90-day limit regardless of payment from their client, although this is tough to enforce. I have also found that most clients will not object to a 180-day threshold at which time they become responsible for collection costs -- because they don't typically consider this a real possibility. I starting adding this last provision after I had to go after a client who didn't pay. Although I won, collection costs ate up 40% of the amount recovered. I would elect to enforce this provision only in an extreme case, and not against someone I consider a good client.

My practice accepts 4 to 8-month payment turnaround as normal. If necessary for cash flow, you might want to consider using a line of credit. Although I have not done this, I found that it would be cheaper than some alternatives, such as offering incentives to my clients for timely payments.
J. Peter Jordan
Senior Member
Username: jpjordan

Post Number: 739
Registered: 05-2004
Posted on Saturday, June 07, 2014 - 11:33 am:   Edit PostDelete PostPrint Post

In some states, pay when paid is not an enforceable contract requirement, but not in Texas. What I hate is the implication that "pay when paid" means "pay if paid."

My rate of noncollectable acounts is less than 5 percent (probably between 2 and 3 percent) after 8 months, but based on the fees people want to pay, even this relatively modest rate is too high. Most of my clients pay as soon as they are paid (checks go out to consultants in less than 3 days), but many clients don't promptly pay. This is true even of local governments which are supposed to pay promptly.

Try to find out when your client invoices. Some firms do invoicing once a month (usually at the beginning). If they receive your invoice the day after theirs goes out, it won't be processed for a month, any your payment will be comparably delayed. If your client invoices as soon as a milestone is achieved, make sure your invoice goes to them promptly.

I have had turnaround on invoices in less than 10 days, but a more normal turnaround is 60 to 90 days.

I know some people do COD, but while it does ensure your business has a good cash flow, it really isn't the way the business world is supposed to work.

I did have success threatening copyright infringement on a public project; created some real concern on the part of the Owner and Contractor. That is action to anyone publishing your work without permission, not just your client; it is triple damages in Federal court. Copyright doesn't have to be filed. I do put in my proposal that right to use my work for the project is conditional upon receiving payment.

Don't do work for deadbeats, even if you have enjoyed working with them before (usually not the case), but you can't always see one coming.

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