If your company performs services for a fee, you know first-hand how great it is and how much of a relief it is when you get paid….on time and in the correct amount, that is.   While it is great when things work out and you can move onto the next project, it is unfortunately common for service providers to run into trouble when it’s time to collect for the services they’ve performed.  Here are ways to help make sure you get paid for your services:

(1)    For any contract you enter into under which you agree to provide services for a fee, it is important for the contract to clearly set out the method and timing of payment, as well as any penalties that will be assessed if the payment is not made timely. 

(2)    It is also very important that the contract contain a provision entitling you to recover your attorney fees and related expenses should you have to retain an attorney to help you collect what you are owed under the contract.  Late fee penalties and attorney fees provisions in contracts provide strong incentives for the other party to pay you on time and in full. 

Including an attorney fees provision in a contract is especially important in situations where the contract fee for your services is relatively small.  Without an attorney fees provision, the other party may simply refuse to pay you knowing that it will be cost prohibitive for you to sue them, i.e., you will end up spending as much or more on attorneys than the amount of contract fees you are actually owed without the ability to recover the attorney fees you incur in the process. 

(3)    It also important that you always invoice the other party per the time intervals for payment set forth in the contract (e.g., if the contract provides that you are to be paid every month, you should submit an invoice every month).  In addition to clearly setting forth the fee amount due and due date for payment, your invoices should also note the late fee penalties that will accrue if payment is not timely made as per the contract as well as your right to recover your attorney fees and expenses if you retain legal counsel to assist you in collecting the amounts due.

These simple steps will provide you with a first line of protection against the other party to the contract not paying you for your services on time and/or in full. 

Remember though, before you sign any contract, you should always consider having your attorney review it to make sure you are properly protected.