What is a good installment plan for our client who owes $45,000 for architectural and engineering services from one invoice? How far out would you take a payment arrangement? Would you require a signed agreement?
Stretching Out Supplier Payments
Answers
According to their ability to pay. It makes no sense arbitrarily setting a term if they won't be able to abide by or afford it.
I would also look for a funding source depending on their type of business....like an assignment of one of their contracts where payment from their client is directed to you. You are basically distributing your
Another option is looking for assets that can be used as payment ...not necessarily equal to the amount owed....even just close to the amount owed will do...to get it over and done with.
Anon,
Is this an overdue invoice or one you are about to send out?
Are you still doing work for them?
Are you sure there are no disputes about your work done to date?
These may be factors that help you decide what to do re a payment plan.
Either way, document it and get it signed off by client.
I addition to the questions Len Green asks:
How big is the client?
Public or private?
Did you check their credit before accepting this contract?
If so, what how current or slow are they with payments?
If not, get a credit recommendation or credit report?
From the recommendation or report should also show what is the largest credit that was extended to them.
Are there any UCC's?
( These questions and planning should be done in the future for all contracts)
For this transaction, as Len stated what ever you payment arrangement is agreed upon, get it in writing. See if you can get a person guarantee or confession of judgment.
Unfortunately this is like a bank giving money to a company - AND THEN, going back to find out whether the company could really qualify for the loan and setting up the terms of repayment.
Hopefully this will not be a costly mistake in order to think differently in the future. Bradford is clearly on the right track.
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