Entrepreneur - - By John Tabita

Stop Waiting to Get Paid! How to Collect Even when Your Client Delays

In January of this year, I traveled to our New York sales office to conduct a week-long sales training session. Mid-week, one of the newly-hired reps made a follow-up call to a client she’d sold adverting to the week before, reminding him to send the ad content.

Not only did her client eagerly email his logo and photos, he also sent her a text message, letting her know he’d done so, because he knew she was out of the office all week.

Is that a common scenario for you, clients enthusiastically sending content in a timely manner? I didn’t think so. Her off-handed comment after she’d read his text message was: “I train my clients.”

The advantage to newspaper or Yellow Page adverting is that there’s a deadline. Clients know if they delay, they risking missing the publication date. With the Internet, no such urgency exists. But you can create a sense of urgency by implementing Action Step #5.

Action Step #5: Stop Attaching Payments to Production Milestones

What this Solves:

Waiting to get paid because of client delays

Our industry has fallen into the trap of attaching payment schedules to production milestones. I once waited seven months to get paid for a site that was 95 percent complete, sans content—all because I didn’t require a deposit and foolishly stipulated “payment upon completion.” It took some time to figure out a better way, but once I gained some experience, I knew I could produce a custom site within 60 days, tops. So here’s what I did.

First, whatever document my client signed (i.e., contact, proposal) included a project time table:

  • Apr 1: Client provides all content
  • Apr 10: Developer presents site mockup for client review
  • Apr 10-30: Client reviews design, requests changes; developer submits revised mockups
  • May 1: Client approves final design
  • May 15: Designer presents working site for client review
  • May 15-30: Client reviews site, requests changes; developer makes revisions
  • Jun 1: Client approves site

Next, I structured by payment schedule like so: one third up-front, one third in 30 days, and final payment in 60 days. If all goes well, you’ll notice that the client will be approving the final design approximately the same time payment #2 is due; but, again, it’s not a milestone. Dragging his feet on approving the mockup doesn’t mean he gets to drag his feet sending me a check.

Perhaps the client still hasn’t sent the content; but I used stock photography to create a design, so I’m still good. I’ll use the 30-day payment benchmark to remind him I’ll need content very soon.

At the 60-day final payment benchmark, if I’m the one who’s behind schedule, I can choose not to invoice him just yet. But if the site’s incomplete due to his inaction, he’s getting a bill.

Most clients delay because they’re busy, but some delay intentionally. One developer had a client who purposely delayed final payment by taking weeks to review the site. Another had a client who refused to pay the full amount upon completion to insure the developer would provide technical support. If you’ve not been paid a dime at this point, you’re in a poor position to demand payment, because you risk losing it all. If, however, you used my three-step payment method, you already have two-thirds of your money. If things go south at this point, you have a lot less to lose.

Remember my story of how I waited months to be paid because one of my first clients took so long to send content? Years later, one of my very best clients asked me why several pages of their site were incomplete. I told her because her predecessor never sent content. She seemed surprised and assured me she’d send something right away. I’m still waiting … but not for my money.

It’s not too late to get my free guide, 27.5 Must-Ask Questions for Consultative Selling. Just follow me on Twitter and I’ll send you a link.

This is part 7 of the series Putting a Stop to Abusive Client Behavior:

  1. Stop Client Abuse of Web Designers Now!
  2. Stop the Abuse! 7 Steps to a Well-Trained Client
  3. Stop Wasting Time with Prospects Who Aren’t Serious
  4. Stop Giving Away So Much Free Information!
  5. Stop Writing Proposals to Win Business
  6. Stop Doing the Same Things and Expecting Different Results
  7. Stop Waiting to Get Paid! How to Collect Even when Your Client Delays
  8. Stop Getting Walked on and Set Some Boundaries Already
  9. Stop the Slippery Slope of Scope Creep
  10. Stop Making Endless Design Changes
  11. Stopping Abusive Clients: The Complete Process
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