“You actually get paid to direct a road race?” How many times have we all had someone say that to us?! Um, yes, we get paid… well, most of the time.
Have you ever found it a challenge to get paid money owed to you by a sponsor or by a client hiring you to manage their event? Lucky for me, I have not been “stiffed” one penny in the past four/five years. Why? Well, I would like to think it is because there are a lot of good, honest, dependable people out there who live up to their commitments. At the same time, I’ve learned that you just can’t sit idly by, thinking the checks are just going to magically roll in. Here are some lessons I’ve learned over the years that has kept my batting average at 1,000 during the past few years:
- Be sure to get it in writing!!! By far, this is the most important step you can make to ensure timely payment. Call it a contract, call it a letter or memo of understanding, call it an agreement—call it what you want—just get it all in writing. The total amount and especially the payment plan. Usually, I might divide up the total amount in four or five payments between the signing of the contract and perhaps until a week or two after the event... sort of a “pay as you go” structure.
- Additionally, and I have honestly never done this, but you might want to consider including language that addresses additional charges if the client is late on paying according to the agreed upon payment plan (but good luck getting away with that one).
- You want language in your agreement that addresses the remote case that the company you are dealing with is sold or the event you are managing is acquired by a third party. Include an “assignment clause” in the agreement that addresses this, especially in this day and age where businesses and events are now being bought and sold on a regular basis.
- And, the same thing goes for a cancellation clause. If you do all the upfront work and then the event is canceled, how does that impact what is owed you?
- Even though I get it all in writing, it isn’t so that I can take someone to court on an issue. In fact, I’ve never been sued (knock on wood) nor have I ever sued anyone. The main reason I get things in writing is to clarify what has been agreed to and who is responsible for what. You never want to get into a situation with your client where you are debating whose responsibility it is to do a certain task. If it is all in writing, then you can at least refer to what was agreed to up front in writing by both parties.
- Always require a small deposit upon signing the agreement. It is when you receive this first deposit check that you know they are serious about going forward with the deal.
- I truly believe it is important to establish a good relationship with the client, one built on mutual trust and respect. This can go a long way toward their wanting to be honest and fair with you and make every effort to pay you on time.
- Constantly communicate with the client, making them aware that you are doing the job and doing it in a timely fashion. Many agreements are structured where you have to meet various milestones before receiving the next payment. I’ve always said, treat every client as if they are your only one. Constantly show evidence that the work is being done.
- It is imperative that you send out timely invoices (both as reminders and out of necessity if the contract calls for that) for each payment due. Most companies will need at least a few weeks lead time to cut a check, sometimes even more. When you are finalizing the agreement, ask them up front when they want to receive the invoices so that you can receive that payment on or before the day it is due.
- If the check does not arrive on time, absolutely send out “gentle” reminders about the payment. If they owe you money, don’t be shy about asking for it but ALWAYS do so in a polite, professional manner no matter how late the payment might be (that is, if you ever want to see the payment and renew the agreement for future years).
- I think a key, too, is to be honest about what you are asking for or charging right at the beginning. Overcharging will eventually come back to haunt you. No one wins when that happens. Let your conscience be your guide.
- And lastly, if you do get “stiffed,” how does that impact the folks working for you? What is your obligation to them? Personally, if I promised someone a certain fee for doing the work and they do it, then even if I am not paid by the client, I still feel obligated to fulfill my financial commitment to my staff and consultants.