There are a variety of approaches to this. Most vendors (as noted by a
previous poster) fear the ex-client who refuses to pay after services
have been rendered and the records are gone. Most clients fear the
vendor who drags their feet after being paid a big pile of money to
remove records.

My experience is that many vendors will dig in their heels and demand
full payment before moving box one. Generally, that approach tends to
exacerbate what may already be a contentious situation.

However, in many cases, there are happy mediums. One possibility is
paying a percentage of the amount due up front, then incremental
payments as the records are retrieved. What is then at risk for the
vendor is the final payment, which is a small percentage of the total.
The challenge is keeping the payment flow moving in concert with the
box flow. Many companies find it difficult to process check requests
quickly, and many companies will not make multiple small payments to
the same vendors (concerns about people circumventing purchasing rules
and approvals). So a discussion with your compnay's Accounts Payable
department is in order.

In particularly difficult situations, it may behoove a client to put
the money into an escrow account for the vendor to be paid from upon
completion of the services (or on a pay as you go basis). This assures
the vendor that the money is there and that there is a clear process
wherein they will get paid.

Both sides need to be aware of the interests of the other. It seems all
too often that vendors gain the upper hand unfairly (after all, they
have the records) and take advantage of an already difficult situation
for both parties. I've seen all manner of issues in these processes --
bar code labels torn off of boxes or blacked out; requests for the new
vendor to immediately pick up the records, only to sit at the old
vendor's location for hours waiting for the records; retrieval rates of
tens of boxes per day (and being told that "we have other clients to
service and perm outs are the last priority"); additional storage
charges accrued because the boxes are retrieved slowly; the
ever-popular hostage fees; additional fees that were never discussed or
documented; and, of course, boxes that can't be found or boxes
belonging to other customers.

Clearly, many vendors would never imagine doing any of these things.
They aren't happy, but they don't want more trouble -- and want to try
and provide good service even when losing an account because you never
know when you might want to win that account back. But they also want
to be sure that they will be paid for their expenses.

So the best advice is to negotiate a payment plan based on performance
and percent of completion. That tends to provide incentive for the
vendor to move swiftly. Further, negotiating the process (rate of
retrieval, pickup availability, condition of boxes, pallet stacking,
escalation paths, etc.) and documenting the process as a project where
milestones are tied to payments and signed off by both parties will
help ensure that both sides agree upon the process. And, as I said with
hostage fees, this sort of thing is best to negotiate before the
marriage, rather than after the divorce.

Patrick Cunningham, CRM

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