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Service Agreements vs Purchase Orders

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Had a first time request today - an intended future client of a one-time compliance project has asked if we can accept a Purchase Order from them in lieu of our signed service agreement. Not even sure how to react...

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I would also decline. While we rarely have to take measures to enforce our SA, I would have some doubts about a client who does not want to sign one at all.  

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Every so often I post information on our philosophy on Service Agreements. We don't have them, and haven't had them from our first day in business (1983).

What is the purpose of Service Agreements: to protect the servicing firm (not the client).  We don't need protection.  A big part of this is we get paid in advance, so don't have to worry about collecting past due payments (we have a few things we bill after the fact, like distribution forms, but not a big deal and in 35 years we can count on one hand the number of times we got stiffed on these small amounts).

We do what we say we will do. We have never been sued and I can't remember ever having a client have a problem with what we delivered after being paid.

And I tell clients we don't have a service agreement because it is only meant to PROTECT US from them; we write it and they have to sign it. So, we don't use them.  If you want to fire us, that's your right.

Anyway, just another way to look at this.

So, yes, we would be happy to accept a "purchase order" since we don't need it in the first place: we send the bill and they pay us and then we do the work.  If they don't pay us, no work!.

Larry.

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I think Larry Starr has a very unique, and enviable, situation.  But for those who do not have the same, I believe very much in service agreements over purchase orders if the purchase order does not contain specifics.  Yes it protects the firm, but it also identifies for both parties what is expected from both sides.  Truth be told, I would prefer Larry’s situation over an agreement.

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16 hours ago, Larry Starr said:

Every so often I post information on our philosophy on Service Agreements. We don't have them, and haven't had them from our first day in business (1983).

What is the purpose of Service Agreements: to protect the servicing firm (not the client).  We don't need protection.  A big part of this is we get paid in advance, so don't have to worry about collecting past due payments (we have a few things we bill after the fact, like distribution forms, but not a big deal and in 35 years we can count on one hand the number of times we got stiffed on these small amounts).

We do what we say we will do. We have never been sued and I can't remember ever having a client have a problem with what we delivered after being paid.

And I tell clients we don't have a service agreement because it is only meant to PROTECT US from them; we write it and they have to sign it. So, we don't use them.  If you want to fire us, that's your right.

Anyway, just another way to look at this.

So, yes, we would be happy to accept a "purchase order" since we don't need it in the first place: we send the bill and they pay us and then we do the work.  If they don't pay us, no work!.

Larry.

I think you have done very well with the "predictable."  In my mind, a SA is to define what happens in the "unpredictable" by defining with written clarity the limits of services provided.  That way, when something unexpected (unpredictable) happens, everybody know what the responsibilities of the service provider are, and more importantly are not.

I would politely decline.  I'd never ever ever let a judge decide what the parameters of services offered are.  Very dangerous.

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Our service agreement also serves as our 408(b)(2) disclosure.  That was an easy decision since our agreement has always described the services we provide and our fee schedule.  I agree with MoJo and prefer to have clear documentation of the services we are agreeing to provide. 

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To me, a PO is just how and when they are expecting to pay for services, but doesn't define those services. I love Larry's setup, but can understand why a SAgmt is needed to clarify the roles of both sides.  To me, these are two different things for two different reasons.  

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