IC Week: Jean Eells on Small is Beautiful–Getting to Pay Day

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.

The American Evaluation Association is celebrating the Independent Consulting TIG (IC) Week. The contributions all week come from IC members. Do you have questions, concerns, kudos, or content to extend this aea365 contribution? Please add them in the comments section for this post on the aea365 webpage so that we may enrich our community of practice. Would you like to submit an aea365 Tip? Please send a note of interest to aea365@eval.org. aea365 is sponsored by the American Evaluation Association and provides a Tip-a-Day by and for evaluators.


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