Receiving payment from a client is a question almost all of us have had to consider. And, it turned out to be the ideal topic for an IFDA NY Chapter panel discussion held on May 16 at the New York City Cosentino showroom.
Three panelists offered their perspectives:
- The Attorney: Alex K. Ross, Esq., of Ross & Katz, New York
- The Accountant: Tricia M. Taitt, principal of The Art of Money Matters, Your Outsourced CFO
- The Client Relationship Expert: Richard R. Shapiro, founder of The Center For Client Retention, Berkeley Heights, N.J.
The group was moderated by me, as a representative of IFDA NY Chapter member Pavarini Design, New York.
The key takeaways?
- Good personal relationships with clients matter. Make sure to over-deliver with great customer service and thorough forecasting of job costs and budgets.
- Request a retainer upfront and consider an upfront design fee to cover the drawings and planning documents/spreadsheets, etc. This requires some prior historical data for reference and is advisable for experienced professionals.
- Only agree to a flat fee if there are strict limits and inclusions set forth in your letter of agreement.
- Make sure your payment schedule doesn’t leave a large amount due at the end of the project when clients may want to avoid paying.
- To keep positive cash flow, don’t invest your own money on behalf of a client. Be sure there is always money in the retainer to cover your work in process.
- Charge a markup on product in addition to monthly billing for construction supervision and reimbursable expenses and make sure product is paid in full PRIOR to delivery.
- Know your worth and charge it in your hourly fee and be clear how that applies and is billed during the course of a project to cover time and expertise.
- If it becomes tricky with the client toward the end of a project, MAKE SURE to do EVERYTHING you have committed to do, check off every punch-list item and that ensure everything installed works as designed before pressing for payment.
- Include a stipulation in your contract that suspends deliveries if payments are not made on schedule.
- Small Claims Court is the best way to recover unpaid balances under $10,000 for unreasonable clients.
Attendees left the event with plenty of good advice. We hope you think so, too.