It might just be a matter of semantics, but a retainer is not your money, it still belongs to the client and has to be returned when they make a request or demand for it. An advance payment is what should be requested. We do this with international clients who have a history of slow payment. We have done it with other clients that might suspect could be a payment issue. Another method is to advance bill and work until the fee is used. Continue work when the next invoice is paid. This provision has to be clearly negotiated in the contract, and then do not waiver.
The best method to get paid is to follow up after the invoice is sent to make sure they are no issues, then follow up after the contract stipulated payment period provision to inquire about status of payment. After the second invoice, if there is still no payment then hold deliverables. If there continues to be no payment then you should stop work. Stop work notices need to be done in accordance with your contract naturally. Often times when you stop work you have effectively fired the client. Which should be okay as you do can ill afford clients that do not respect you enough to commit to their contractual obligations and pay for the services provided.
Also, you should not commence with services unless you have a signed contract or letter of intent that stipulates payment provisions. When you work off verbal directives you are at risk of working for free.
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Kerry Hogue AIA
HKS, Inc.
Dallas TX
Original Message:
Sent: 05-17-2016 09:39
From: Lester Lloyd
Subject: collecting fees
I have learned over time to get a 10% to 30% retainer from every new client. It is applied to the last invoice. The amount depends on the size of the job (smaller=larger retainer) and the size of the client (bigger may=smaller retainer). This does three things: gets you into their accounting system to avoid later delays (for a larger client), makes sure they are serious about paying, and gives you something in case they never pay again. No one seems to object to the retainers, surprisingly.
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Lester Lloyd AIA
Principal
Lloyd Architects
Plymouth MA