Monday, May 4, 2009

Pay Consultants Promptly, Please

Since I have been out of traditional employment for 3+ months, I have ramped up efforts to do independent consulting work. I have several trusted clients who I have developed rapport with, but with extra time available - I have looked outside this circle of trust for new clients so that I could possibly come close to being able sustain myself financially between traditional employment positions.

Competition for such work is fierce. In order to compete, I price myself reasonably and try to make dealing with me as easy as possible. One such policy I have is not to charge anything upfront, but instead issue quotes for a defined amount of work and then collect on that quote after the work is complete.

Unfortunately, this system of trust does not always work in my favor. It may bring the client to me, but what compels the client to follow through on their commitment to pay (outside of common decency) when the job is completed to satisfaction?

I have had a few situations lately, with new clients, where work is complete but payment is lacking. Asking several times is not only uncomfortable, but brings more empty promises and excuses. I have had to make the decision to cut some of these clients, and still have not received payment. I can only ask so many times, and small claims court would only be a time hog and a 'feel good' victory.

Working and not getting paid is obviously a detriment to any business, but for the independent consultant (IC) it is devastating as this is the bread on my table. As it stands normally, the amount of work for IC's is not consistent month after month and sometimes even honest payments may take as long as a month to come through. The small bill from the non-threatening IC may not be a priority to a business having received the services, but it could very well be the lifeline for the IC.

A friend of mine does website consulting and had some advice for me. He offers hosting in addition to website consulting, so he retains a credit card for the hosting charges:
It helps that we offer hosting and accept credit cards. People are more likely to pay if they know we can shut down their website and accepting credit cards means there's no excuse.

We also require signed contracts and if we don't have a previous relationship with a client, we require a 50% deposit. If a client is flaky, we work off of retainer.

Nothing you can really do about collecting except for being persistent.
I am probably going to have to give up independent consulting, simply b/c I cannot seem to make the income steady enough to support recurring personal bills like mortgage, healthcare, utilities, etc. It is unfortunate, b/c I do enjoy IC work and believe I provide a valuable service to my clients - who may experience some difficulty in having to find and train a replacement.

The message here is to show your appreciation for your independent consultant by paying them promptly. It can sometimes be a thankless job, and to get a prompt payment is the best sign of appreciation you should show. For those who have been consistent with me over the months/years, I appreciate you now more then ever.

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