Hi, I'm Katherine Taylor, the lawyer for business owners.

I'm going to explain one thing you can do right now that could make the difference between getting paid quickly and chasing clients for money.

What is it?

Take a look at your service contract, sales contract, or whatever agreement you use with your clients or customers. It could be an online agreement or a hard-copy document. Then go directly to the payment clause. If that payment clause only says something like, "Payment in the amount of ___ shall be made upon completion of the work," and that's it, you need to go further.

Why?

Because the payment clause is probably the most disputed provision I see in my practice. After years of litigation and drafting contracts for business owners, I've found that payment disputes often happen because the clause simply isn't clear or detailed enough. A payment clause needs to be extremely detailed because it lays out the process you, as the business owner, will follow to get paid. The payment clause should address:

• How much the client or customer must pay
• How that amount is calculated if it isn't a fixed fee
• When invoices will be issued
• How invoices will be delivered
• When payment is due
• Whether payment is due upon receipt, within a certain number of days, or on a specific date each month

It should also address what happens if payment is not made on time. Can you charge late fees? Can you charge interest? If you have to initiate collection efforts, who is responsible for those costs? If those terms are not in your agreement, you generally cannot charge them to the client. If they are included in the agreement, you can. Collection costs may include:

• Collection agency fees
• Certified mail expenses
• Attorney's fees
• Court costs

Attorney's fees are especially important because they must be expressly stated in the agreement if you want the ability to recover them. So, business owners, pull out those contracts you've been using for years. You probably haven't looked at them in a while. Review the payment clause carefully. If it needs work, give us a call. We can help you strengthen your agreement so you can get paid more quickly and with less hassle.