[brudgers]

When I can, they are paid before I send them because I stipulate a retainer in the contract and further stipulate that the retainer is to be applied against final invoice. Likewise, my default terms include payment is due upon receipt and failure to pay is grounds for stopping work.

The only one that really matters is the retainer, because that's the one about who owes who what and it means I owe work instead of the client owing me money. It prevents clients from using me as a bank.

That's not to say that some clients have well defined invoicing processes and that I wont' work with some of those. I say 'some' because some other client side well defined payment processes include partial payment or slow payment or no payment. And those are clients I generally want to avoid.

One of the things a retainer does is that it demonstrates how the client really views the idea of paying me. If they struggle with the idea of writing me a check during the honeymoon, it probably ain't going to get any easier for the client as the project proceeds and when it snags in the middle or when the client has what they want. And deeper down, the basis of good client relations is less contracts and more mutual trust. Clients who default to not trusting professionals tend not to be worth the effort of trying to earn their trust.

Good luck.

[vram22]

>It prevents clients from using me as a bank.

Not clear what you mean by this, please explain.

[brudgers]

A company can go to a bank and ask for a few thousand dollars to be repaid in 30, 60, or ninety days. The bank will charge fees in return for the providing the money. That is the bank's business and how it turns a profit.

On the other hand, there are no fees if the company does not pay me for 30, 60 or ninety days and so it is economically rational for a company to improve cash flow by not paying me rather than using a bank. Worse, collecting delayed payment takes my time and energy and does not produce additional profit for me. Just additional work. Even worse, holding my payment creates cash flow problems for me that provide the company leverage to renegotiate for pennies on the dollar.

At worst, I have learned in one of the harder ways that I don't want to loan money in the form of delayed payment to businesses with cash flow problems. A company that cannot write me a check before the project starts does not have sufficient funds to complete the project. Better I forego fantasy profits and play the odds.

[vram22]

I get it now, was not clear earlier because the fees are not present in your case, so the analogy did not seem exact, though I did think about it before asking. Thanks for the detailed answer. Makes good sense. I've had a few cases like that too, as a consultant, and have learned from them.