Make Sure You Get Paid

• Halfway there: There are clients who are willing to pay half up front -- which is great and something you should insist on -- but some of these people are assuming that the work you do in the first half will be enough that they can finish it and avoid paying you the rest.
  I've had this happen to me, but I was warned by the accounting firm that brought me in. So I charged enough in the first half to include my profit in the event the client refused to pay the rest.
• Inexperienced husband-wife teams: The most dangerous group you could work with. I avoid working with husband-and-wife teams, because one of the two spouses is usually afraid to tell the other when they are wrong.

Getting What's Yours

1. You should have a signed agreement that specifies

• exactly what you are responsible for
• exactly what the client is responsible for
• deliverables
• due dates for payments
• penalties for not paying
• how disputes will be settled

2. You should always get half of any agreement up front. Make sure that the first half of payment includes all of your costs.

3. Don't do anything until you are paid. All too often we want to be good, cooperative vendors and give our clients the benefit of the doubt. Unless you have worked with the client for a long time and have established a level of trust, don't take the risk.

4. If a client isn't paying his bill, send him several written warnings and a last warning by certified mail.

5. Don't hesitate to take a client to small-claims court if the amount is worth more than the time you would spend litigating it. Suing someone should be a business decision, and emotion should be removed. Sometimes you need to take a client to court just so everyone knows you can't be walked on. I once made the mistake of not taking a client to court and have regretted it to this day.

Finally, keep in mind that not all debt is collectable. You have to assess whether it is worth the time and cost it takes to collect. All businesses at some point get desperate for business, but you have to restrain yourself from taking on bad risk. Trust your gut, which I find to be more accurate than any financial report or referral you will get.