The Art of Professional Billing– Timing

When’s the best time to bill a client? Well, obviously, that’s very situational, but it should never be haphazard or ill-timed. There are right times, and wrong times.

In my opinion, one of the biggest PR disasters for professional firms is the monthly billing blitz, when clients are billed solely to enable the partners and associates to make quota. Sure, it may keep their “numbers in line” for compensation purposes, but more often than not sending out a bill to the client which has no apparent relationship to results will make them feel used, that they are there for your benefit, not that you are there for their benefit. Building and keeping trust is too hard to be wasted because of bad budget planning.

That’s not to say that end-of-the-month billings are all bad. There is a place for a monthly billing scheme if it is agreed upon in advance with the client, and regular, periodic billings can often make sense economically both to the professional and to the client. But it can’t look like an ambush.

Staged billing, similarly, can be a good way for both client and professional to keep focused on progress. “Fifty percent due and payable upon approval by the City” can be quite motivational for everyone.

Progress billings are also a good way to gauge client satisfaction, as well as the client’s capacity to finish the project. It’s better to discover, three months in, that the client is getting cold feet or is running out of money than to carry the client’s baggage for two years only to be told they didn’t like your work, or that they’re broke and can’t pay you.

Billing can also have a salutary effect on the client, helping him or her focus on what’s important. When I was practicing matrimonial law I found that hitting the client in the face with a good, solid, no-discount bill early in the game worked wonders to get them in touch with reality. Clients who had insisted on “having their day in court” to see their perfidious ex-spouse roasted by the judge would suddenly see the merits of mediation and cutting a fair and simple deal on custody, access, support, and property division, then getting on with their lives. By whacking them with a significant bill at an early stage, I actually did them a great service and ultimately saved them a lot of money.

It’s also often useful to bill if the client seems to be dragging his feet, or has gone out of radio contact. If it’s going to be a fight to get paid, let’s find out now, before we spend any more time on the file.

Finally, and perhaps most important, we should remember that everyone is more willing to pay in prospect than in retrospect. The time to get money from a client is when he needs you, because human nature is such that even if you walked on water on his behalf, after the fact he’ll begin to complain that you can’t swim. But if you were paid in advance, or took a cash deposit, you don’t need to worry about the back side of the gratitude curve.

(Excerpt from The Alignment Doctrine)