Contracts

Date: Sun, 20 Jul 2008 07:03:38 -0700 (PDT)
From: "Dee Dee King, Certified Genealogist"
    <deedeeking@genealogyfinder.com>
Subject: Re: [APG] Collections Clause

Carolyn, each state has different usury laws regarding how one can charge for interest on unpaid bills.  The first step would be to speak with a local attorney who could help with the wording and compliance.

The clause usually has several elements. Generic example: Client invoiced monthly and payment is due within XX number of days. The unpaid balance is past due after XXX days.  Interest at the rate of XX monthly with an annual rate of XX may be charged on the past due balance.  (This formula is based on your state's law.)  If the past due balance is not paid within XXX time period, a collections process may begin.  (Check state law.)  Client is responsible for all collections costs, including attorney and legal fees.

All this probably should be considered in our business plan and internal best practices.  What do we do if a client won't pay?  What does the law allow?  What kind of notice must I give? What are the collections steps? Who pays those costs?

For those of us who work from advanced retainers, the clause probably would not be necessary. Some folks switch to monthly billing or billing after the work is done.  The clause might be helpful in those cases.