I’m Jean Eells and I’ve operated E Resources Group, my evaluation and consulting business, for 14 years. My clients are small non-profits and small local or state governmental departments and I run from 8 – 12 contracts at a time and up to 15 in a year mostly by myself, or with subcontractors. My tip is about getting paid and keeping cash flow timely which is essential to be successful as a small independent evaluation firm. As a small shop, I can’t wait months for a paycheck and I’ve learned a way to avoid most of the stomach-churning delays I hadn’t anticipated.
Lesson Learned: Whenever I enter into a contract with a new client, or one who has undergone significant restructuring since I last worked with them, I always write the payment schedule to include a nominal payment right at the beginning before I’ve produced any real products for them. Sometimes the contract language I use is “due payable upon contract signing” and the amount may be $500 or $1,000. Most of the rest of the payment schedule is tied to benchmarks common to most consulting contracts. For state contracts which will only pay in reimbursement, I negotiate for a small easily achievable benchmark for the same purpose.
Hot Tips: Getting the client’s organization to enter me into their accounting system often takes longer than they assure me it will take! This also gives me a heads up to anticipate the length of time it may take from when I send an invoice to when I have the check in hand. It allows my client – who is not the same as the accounting department – to save face when the check gets delayed for weeks and they don’t have to be embarrassed when their organization doesn’t pay as quickly as they said. I can’t say the technique makes slow-paying clients hurry any faster but it helps me manage my expectations and thus my cash flow more effectively.
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