We recently invited Joanna Oakey, Director of Aspect Legal to a webinar on the topic, ‘The Legal Challenges of a Growing Business’
Here’s what she said -
The reason for non-payment and slow payment, is a lack of provision in your client agreement when they don't pay on time. You have the right to charge interest and the right to charge administration fees. I've seen some great examples of business owners adding discounts for early payment or discounts for on-time payments.
That is sort of a different way of posing fees and an alternative to imposing fees for late payment. You should be thinking about utilising your client agreement to help ensure that you have the right power behind you to enforce on-time payment, if you're not getting it from your clients.
We deal with the expectation first between the parties and you should be using client surveying tools like MPS to make sure your clients are happy as well. You should also have the power that sits in a client agreement, to ensure that you have the right to enforce things from a financial perspective to enforce things from a financial perspective that will make it increasingly likely that they will want to pay on time.