FULL AND PROMPT PAYMENT FOR SERVICES RENDERED--SOMETIME OR ALWAYS?

Over the past few decades, the design professions have experienced increasing pressure from clients for lower fees and expenses, resulting in reduced profitability, reduced fees, increased aging of accounts receivables, and write-offs or write-downs of aged receivables. These issues can be addressed through contract provisions and effective management of the billing and payment processes. The first step is client selection. Once satisfied with the prospect for prompt payment, companies can concentrate on the benefits and advantages of good contract payment provisions and effective money management. Protection of this essential ingredient to a firm's continued success requires clear agreement with the client about the basis of the fee, the way in which fees will be allocated by a schedule or a periodic basis when payments are to be made, and clear consequences that attach to the failure of timely payment. When coupled with proactive efforts on the part of the engineer to remind the client that payments are expected, the engineer can be reasonably sure that his accounts receivable will be manageable.