Is Your Payment and Agreement Process Losing You Money?

If you get paid for a service, collecting payment is the lifeblood of your company.

And, yet, if you are like most people, you’ve made it an afterthought. Indeed, few companies and individuals have given deep consideration to how their clients and customers interpret and understand the agreement presented.

For example, I recently got a request from a client I’ve worked with a few times before to review her client agreement.

Upon doing so, what I saw was not only an agreement that felt like a big turn-off, but a payment collection process that made it less likely that her ideal clients would say yes to working with her.

Here’s how it worked:

Step 1: Review agreement that basically says if you are accepted for mentorship, we are going to charge you the full amount (unspecified in agreement) and you are responsible for payment, no matter what.

Step 2: Apply for mentorship and put down a $500 refundable deposit.

Now, if I am her potential mentee client, that agreement is going to turn me off to the point where I am unlikely to put down the $500 refundable deposit.

The agreement comes at the wrong part of the process. And, the wording in the agreement itself is overly harsh and does not feel protective enough of client for me as client to feel good about signing it.

Remember this: agreements are in place in your business not just for your protection, but for the protection of the relationship as a whole.

How your agreements are presented, when they are presented, and what they say are of critical importance to your relationship with your clients and customers.

In this case, I recommended to my client that we upgrade the language of the agreement to make it more mutually protective – win/win for all involved. And, that the agreement not be presented until after the application was reviewed and the mentee was approved and validated his or her desire to fully participate by signing the agreement.

So now, the process is:

Step 1: $500 refundable deposit to get an interview. If approved during the interview, review the agreement together during the interview and solidify the relationship, being sure to point out the places that the agreement protects client, not just mentor. If not, refund $500.

Step 2: Sign agreement that is a true win/win agreement. Begin long-lasting relationship.

This process will enhance sales, ensure the right people enroll in the program, meaning those who will be most successful with the mentorship, and also create raving fans.

The language of your agreements and the way you present your agreements are a critical piece of you getting paid (and being able to collect on overdue payments) AND building a business that lasts.

If you would love to have your agreements reviewed, not just for legal compliance, but to ensure they support your marketing and client engagement processes and create better, more profitable client relationships for the long-term, contact us for a comprehensive audit of all of your Legal, Insurance, Financial and Tax systems and we’ll include a full contract review in the process.

The South Florida business market is only getting more competitive. In Fort Lauderdale, the private sector created over 26,000 jobs last year and there are still 25,000 open positions. New businesses are opening all the time. Will yours be the one to be successful?

This article is a service of A. J. Yolofsky, Family Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.