Another customer fired....

[tylercrum]

I need to vent.
We are primarily a wrap shop, though on occasion we will produce some mounted boards. Some of our customers pays 50% down and 50% upon completion, a couple like to pay a graphics fee and then pay another deposit once graphics are approved and then the rest upon completion. Point is, we don't have a single client that doesn't pay COD. And not one person has ever complained.

We've had a big customer we just started doing business with a couple months ago. Really big account, and a real big pain. Constantly resubmitting files with corrections hours before the jobs were due, forgetting what jobs they had ordered and what they'd forgotten to order etc.
They are a print broker btw.
The first couple weeks we did everything 50-50 and they had no complaints. Then they started asking us if we could wait 7 days to get paid because that's how they're client was paying them. I cautiously said yes and for a few weeks that worked out fine. Then we did a a $15k job for them that took them 3 weeks to pay on, at which time they came to us and said that they needed us to give them 30 day terms or they were going to have to find another vendor. So at the beginning of this month, we told them that they needed to pay everything COD this month so that we could use the profits to put some vinyl and boards in inventory and then we could extend them some very strict credit terms starting December 1st.
Finished a job for them on Friday, and one on Tuesday. They paid some on Tuesday and said they would pay the rest Wednesday. Today rolls around and I still couldn't get them on the phone. Finally talk to them and they say it's going to be next Tuesday before we can get paid, but they have another big job to turn in.
Told them I needed the check today and that they were going to have to find another vendor.

I watched my father's printing company go belly-up thanks in part to some larger corporations taking as much time as they'd like to pay their bills and I'm not willing to go through that myself. Stubborn as it may be. (It should be noted that he was a terrible business owner to begin with, haha, which is why his business closing was only due in PART to unpaid invoices)

Rarr

 

[unit29]

wow in new here but Ive done the same thing in past . i have out of the game for Five Years . I'm coming Back with this in Mind . Deposit and C.O.D. and NO ONE Has complained . Good For You..

 

[ChicagoGraphics]

You should have gotten your money first and then tell them to look for a new vendor, chances are you might not get the rest that's owed to you.

 

[Sticky Signs]

I get paid to deal with other peoples problems. Bigger the problems, the bigger my bill. My policy is to accommodate my clients as much as humanly possible.
In your case, don't you think it would have been wise to extend 30 day credit? Especially given the amount of work they're sending you. Those 30 day periods roll around pretty quick (as long as they pay within 30 days). A few months from now, you could be getting cheques rolling in all the time not to mention a lot more work. I'm sure there is more to this story than I'm aware of, but I would have tried to make things work before firing the client.
Just my 2

 

[RobbyMac]

I'd have to agree. 30 days is more accomodating to bigger clients. though it doesn't help at all that they are a pita.

 

[HulkSmash]

Are you complaining about getting 3 weeks late by a big client?

I have 2 dozen companies that have us on 90 days. These companies are huge, and will only do work with companies who can't work with them on these payment terms. Why? Cause their corporate office isn't in our state, and that's who pays us. We do wholesale work, just like you're describing, all day every day, and they are all on 30 days. It's how the big companies work. If you want your company to grow i suggest you go after the big, accounts. Yes - aggravating at times, but they usually come with a hefty profit.

But yes, all the big corporate companies are on 30-90 days with us.
everyone else is 50% down, 50% on completion.

 

[FS-Keith]

Are you complaining about getting 3 weeks late by a big client?

I have 2 dozen companies that have us on 90 days. These companies are huge, and will only do work with companies who can't work with them on these payment terms. Why? Cause their corporate office isn't in our state, and that's who pays us. We do wholesale work, just like you're describing, all day every day, and they are all on 30 days. It's how the big companies work. If you want your company to grow i suggest you go after the big, accounts. Yes - aggravating at times, but they usually come with a hefty profit.

But yes, all the big corporate companies are on 30-90 days with us.
everyone else is 50% down, 50% on completion.

troof

 

[Si Allen]

You forgot to mention that large companies give you a Purchase Order ... that is just like a contract.

A broker's verbal order is useless in a dispute. It winds up in Court as "I said -He said".

 

[RobbyMac]

its more funner when your terms are net 30 and the customer tells you their payment terms are net 60 or 90 lol

 

[Patentagosse]

If you wanna play that game, you have to be in the major leagues already. If you're just a small shop with 1-2 employes and jump into the "+90 days" imposed by these big players, you may end up having trouble facing your overhead and pay your staff. 'Been there, 'done that. At the end, I was taking cash I put on the side for family trip to pay the guys while still hoping to get paid. Finally I got paid but learned a precious lesson: at the end, I haven't made a single dime more than if I had taken regular jobs and got paid on delivery but all the stress caused by this adventure almost drag me down to burnout... my health worths more than that. Now when they want to stretch the payments to another week or more, I tell 'em to put it on their credit card and take the number of months they want to pay 'em. That usually close the case. If it threathens our relationship, maybe it doesn't worth it. I'm getting more jobs than what I can do so why going after troubles? Good Luck.

 

[James Burke]

Extending credit is a very slippery slope.

We've all been beaten up at one time or another, and if there's one thing I've learned through it all is that CREDIT MUST BE EARNED, NOT FREELY GIVEN.

If they're really interested in working with you, they'll be more than willing to accommodate your initial requirements which should be 50/50 for the first several orders.

If they need to migrate to terms, pull a credit check on them and keep them on a short leash by limiting their balance until they can be trusted. In other words, don't extend any more than you can handle to lose or have to wait months for.

C.O.D. only with a P.O.

Chronic payment problems are usually a symptom deeper problems within the company.

JB

 

[Patentagosse]

well said JB. When I open a new account at JoeBlow sign supplies, they do a complete credit study to decide if I'm good enough for 'em and allow me $1500 limit. Why the hell should we give away credit of many thousands dollars unless we can be garanty the payment?

 

[Patentagosse]

One thing is sure: I'm not going to finance big companies / city administrations / etc... because I'm not a bank. Period.

 

[Locals Find!]

For companies that want net 30-90 terms from you. There are finance companies that will purchase those invoices from you paying 80-90% of the invoiced amount. The customer then makes their payment to the finance company and if they don't pay the finance company goes after them. Your paid and out of the picture as far as collections at that point.

Just google invoice financing. You will find many different companies with varying terms willing to take those off your hands. Might be something worthwhile for your business it might not be. Just letting you know it exists.

 

[Gino]

Your key word here in your opening statement was 'BROKER'. Nothing more needs to be said. That is completely the way a 'broker' runs their business. It's based upon threats of going elsewhere if you don't meet their demands or their terms. They will constantly wiggle their way out of your terms and then you end up financing large companies for THEIR customers. Let your 'broker' friend do the financing. You're his production facility and it's up to him to get terms met for his receiving the product. He's YOUR customer, not HIS customer. Whatever deal he makes with all of his subs, clients, girlfriends or whatever are his business. Yours is making sure he meets your demands.... or just slug 'em upside his head and walk away.

Don' ever give in to these thieves [brokers]. And screw getting a financing company to do HIS dirty work. He either meets your terms or he goes elsewhere. No need for you to spin your wheels if you don't need his dumb business.

 

[HulkSmash]

Your key word here in your opening statement was 'BROKER'. Nothing more needs to be said. That is completely the way a 'broker' runs their business. It's based upon threats of going elsewhere if you don't meet their demands or their terms. They will constantly wiggle their way out of your terms and then you end up financing large companies for THEIR customers. Let your 'broker' friend do the financing. You're his production facility and it's up to him to get terms met for his receiving the product. He's YOUR customer, not HIS customer. Whatever deal he makes with all of his subs, clients, girlfriends or whatever are his business. Yours is making sure he meets your demands.... or just slug 'em upside his head and walk away.

Don' ever give in to these thieves [brokers]. And screw getting a financing company to do HIS dirty work. He either meets your terms or he goes elsewhere. No need for you to spin your wheels if you don't need his dumb business.

You don't give any re seller off the street 30 day terms. When a new "Broker" comes in, he's a regular customer for 120 days, or 25 jobs, whatever comes first... that means 50 down, 50 on completion. Then if they prove to be a worthy paying re seller, they get their 30 days. But 1 late payment. They're done. It's that simple. Companies we do work for like Conagra Mills, WON't do business with us unless we agree to those terms. It's the nature of playing with the big boys. Frustrating yes, but it's work you would have never gotten else where, so it's in your interest to go ahead and work with them

 

[rjssigns]

We are in a situation where a client brings us large jobs then bases the 30 days off of when they receive the finished product. A PITA, but like the man said it is work we probably would not have gotten if we weren't willing to "play". And there is the counterpoint of a sign shop not being a bank either. Ultimately you have to do what is best for your bottom line, but more importantly your stress level.

 

[boxerbay]

he's a broker which means he is waiting for payment from his client before he can pay you. understand the game and decide if you want to be in or out. that type of client needs some float. put him on net 30 with a cap. The guy is bringin 15K jobs. Hello? You should take him to lunch. Most large companies (like us) only do payables once a month. It is what it is.

 

[Techman]

he is a broker. That means he should pay you for your work COD. Your participation in the work has no bearing on his ability to get paid.
Your work has no bearing on his ability to screen out bad clients.
He is selling his work using your talents using your equipment. Paying you later is treating you as an employee.

I was there dealing with a broker long ago. One day my check came in short because they did not get paid. That was not my fault. It was their fault. That ended my participation with their scheme to use my talents, and time to make money but not pay me.

Later another supplier to their scheme called me to ask about payments. Seems he wasn't getting paid for his work either. So its nothing new. Pay late for one they pay late if ever for another.

 

[John L]

For companies that want net 30-90 terms from you. There are finance companies that will purchase those invoices from you paying 80-90% of the invoiced amount. The customer then makes their payment to the finance company and if they don't pay the finance company goes after them. Your paid and out of the picture as far as collections at that point.

Just google invoice financing. You will find many different companies with varying terms willing to take those off your hands.

It's actually called "factoring". Unfortunately, ever since our economy went through the floor, I doubt you will have much success finding any still around and willing to take receivables from a small business other than medical or credit cards.