Contracts

GET CONTRACTS IN WRITING – GET CONTRACTS IN WRITING – GET CONTRACTS IN WRITING!!

“That’s NOT What I ASKED YOU TO DO,” screamed the customer at the contractor. “But I thought it was what we agreed to,” replied the contractor angrily. In the majority of cases, these misunderstandings and hostile experiences can be avoided with the simple step of creating a contract that outlines expectations and expenses.

When you are an independent contractor you want to make sure to cover yourself in the event of any misunderstandings down the road. As a bookkeeper, I always knew what my job functions were ‘supposed’ to be, but every once in awhile, the water was muddied by miscommunication, and that always resulted in disaster. Had I taken the time to create a simple contract outlining my understanding of the job BEFORE we got started, I would have prevented those disasters.

mwbmw-com-getcontractsinwritingWhen what you thought you knew is wrong:

While attending college I worked at the college bookstore.  A man came into the store one sunny morning and asked me for directions to an area I thought I knew. It turned out that he wanted to go one place and I gave him directions to another place. The end result was him cursing at me, and me asking security to remove him from the premises. Lesson Learned!

During my first year in business as a bookkeeper I saw the need to create an outline for myself of the job duties and the tasks I would be performing for my clients, as well as a brief explanation of our billing policy and payment expectations. With each of my clients, I had to make a few modifications, but the contract example below has (and continues to) served me well through these years.

Having a contract can mean the difference between expecting to get paid and begging to get paid.  PROTECT YOURSELF.

SIMPLE CONTRACT EXAMPLE:

Date: ______________

This letter is to confirm my understanding of the terms, nature and extent of _________________ services I will provide.

I will prepare your ______________ for the function/s that we agree upon. I will not ________________________, although I will ask for clarification as I am reviewing the relevant paperwork.

All _____________ work is subject to review by you and/or your Partner. You should all relevant paperwork and information and any other supporting items relevant to your work situation. In the event _____________________, I will be available to assist you or recommend appropriate action. Such additional services are not included in the fee for preparation of ____________________. Application of the law often involves conflicting authorities and interpretations. Although I may recommend a position or course of action, you have final responsibility for the accuracy of your ____________ and should review the data you provide to complete _________________. You are responsible for penalties and/or interest attributable to future modifications of ___________________________.

My fees for these services will be at my standard hourly rate divided in half for the time spent. My hourly rate is $________ per hour, or $________ per hour for these purposes.

Beginning ______________________, ______, (Your company name) billing cycles will commence on the first day of each month and the 15th day of that month. Our new billing policy is as follows:

Invoices will be mailed out on the first and the 15th day of each month, and are due upon receipt. If the balance is not received in our office within seven (7) days of your receipt, a 10% late fee will be added to the balance and interest will begin to accrue on the unpaid balance at the rate of 18% per annum, 1.5% per month. Accounts that are not paid within 60-days of receipt will be sent out for collection with a private agency.

You are strongly encouraged to pay your invoice balances before these additional charges are added. Once late fees are added, they will not be waived.

Do not hesitate to call and discuss with me any questions you may have about this policy.

(Your name)
(Name of Your Company)
(Company Address)
(City/State/Zip)
(Telephone/Fax/Email)

You may want or need several different contracts on hand, depending on the nature and extent of the job you are performing.

The bottom line is really this: If you do not get it in writing then you do not have a leg to stand on. You have no friends when it comes to business relationships and (mis)understandings.

Got it? Any questions?


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