Prompt Payment and Service

posted by hampton on June 6th, 2008

This is probably the most obvious article I’ve ever written, but its amazing how many people just don’t get it. I’ll sum it up with this:

Prompt payment breeds amazing service from independent contractors. Slow payments bring about bad service and dissatisfaction.

It’s so simple from the contractor’s side. If you’re “floating” the clients bill with your own time and life, and they don’t respect you by paying quickly, then you get nervous and less passionate about doing the work. You’d be amazed how many clients don’t understand this simple truism.

Working for clients that are slow-paying is always a frustration for contractors. They will call and request some work done… and it gets lowest priority, because you don’t know when you are going to get paid (6 months later?) and other clients are always waiting in the wings willing to pay. Its probably not good PR to say something like that, but its absolutely the truth. And not just at Unspace. This applies to all contractors. Contractors have to live invoice to invoice. They don’t have salaries or huge bank accounts. We rely on the payments to live our lives. The money isn’t guaranteed. The contractor is floating you credit usually when they are doing work, and it can make them very nervous to be wondering if they will have rent money while working on your project.

That’s why at Unspace, we work on a 2 week billing cycle (1 week for projects going quickly). When we are working for a client, its important that the client can keep tabs of the work being done ($$$ they have spent) and that we always ensure we aren’t floating much debt. Keeps everyone happy. We notice bum clients faster.

This post isn’t prompted by a bad client right now that isn’t paying. It’s actually because one of our clients (guess who… read back) is so good at paying quickly. And I’ve noticed what a difference it makes in the team here. We work on that project at the drop of the hat. Its not just about the money, its about trust and respect and passion. That’s what keeps contractors going.

Also, its tough in a company like ours, because our contractors get paid when the client pays. So, a client that doesn’t pay means that our team doesn’t get paid. No salaries here. All work done that is a direct line from the client to the contractor. Unspace being the team of contractors all working in unison within a small company structure.

The final point: If you are paying a contractor right now for some work, make sure you pay immediately. In fact, write the cheque the moment you get the invoice— right in front of them. You will get passionate, amazing work from them and much better bang for your buck.