Big clients that don't pay on time?????

[asd]

how much money is this customer spending on your business yearly, 1000, 10000, 100000, if your company can't survive if you lose their business then you need too have better terms of payment between you and your client. if whatever amount they owed you is stressing you out then you need to drop them. we all have to deal with customers like this that take their sweet time to pay you or look the other way when the bill shows up, we all handle these situations differently but at the end of the day is upto you if you want to keep them as customers or keep having the same headaches. Today i got pay for a job i did back in august the amount was 142.00 the only reason why I got pay is because my client got a new work truck and want their name and logo install it has been two weeks since they asked me to do it and I still haven't replied to their email, will it bother me if they go somewhere else, no I don't need customer like this

 

[visual800]

As much as this is what we'd all love to do to slow paying clients, I hardly feel this will fly with a large museum client. Sure, being a slow payer is unprofessional, but threatening to act like a cowboy will get you fired real quick. I can't imagine anyone walking into a museum and ripping down signs without being arrested.


your reply has been posted before. No one is going to arrest anyone, no one is going to take it that far, at least not in my experience. 2 things are going happen when you remove a sign for non payment. You still aint going to get paid OR they freak out and try to get you paid ASAP. There is also no "ripping" signs down, you remove them as professionally as you put them up.

I think you guys get too far into your heads into thinking than acting. There is not one sign co in this town that has not repoed a damn sign. and it does NOT get reinstalled until I get a check

 

[visual800]

An I agree about the PO, that is very important. It is also important to have a email trail. in the end 120 days later the bookeeper or accounts payable will be avoiding your calls and email. I dont know how some people sleep at night

 

[WildWestDesigns]

I got a museum client. They are an A list (whale) client. They eventually always pay, but are constantly overlooking invoices, not paying on time, making mistakes, and it is really starting to bug me. Problem is I can not afford to let them go. I've tried waiting, checking in with them weekly, but its at a point where I don't know what to do?? Are late fees / charges something sign makers do? What about a contract?

In this day and age, there should be contracts. It's not any different then having a string of emails to serve as proof of what was going on.

I've been involved in 2 industries that a lot of people will still go by the "handshake is good enough" and in the majority of instances (unfortunately, at minimum that's only 51% of the time), that's not a problem. It's only when a situation like this happens, that it's a problem.

Everything from assessing late fees, when things get escalated (sent to collections, repo etc) should be spelled out in the contract. Otherwise, how do both parties know when thresholds have been met and what constitutes what? Sometimes, certain things need to be specified in certain ways with certain languages in order to make sure that the contract has you covered. Here (and and at least one other neighboring state) in order to repo something for instance, it has to be specified in the contract and can't use "colorful language" like "emergency repairs" instead of "repossession". That's just a for instance and it can vary from jurisdiction to jurisdiction. Most industries have little minutia like this that's specific to them to take advantage of those protections or have a recourse to fall back on.

Experiences will vary on either side and the outcomes. Some experiences may give a certain false confidence about things. Doesn't necessarily mean the next person will enjoy the same outcome. I just prefer to make sure I'm above board. To me, that goes in with being a professional in whatever I'm doing.

With regard to the whale of a client. In my view, don't really want to have one client that is so crucial to your business. Even if you don't get rid of them, they can get rid of you. Then what happens, up that well known creek without a paddle.

 

[anne zoomsub]

A good question for us to discuss, this problem is very hard to handle,especially for a big customer. In my opinion, if a big customer and cooperate for a long time, it's better 30% deposit, 40% before finish his project, the balance 30% will be paid after check, this payment should be noted in both parties contract.

 

[brycesteiner]

I recently learned from a first time large customer that we were given that their policy is 90 days to pay. I had made this for a client who was the designer customer. The designer decided, after we had done the job, to bill directly for the sign, and they would bill for their design separately.
Unfortunately, after we sent the bill, the company comes back and says all their vendors agree to their 120 day policy. I never agreed to the policy. They said too bad.
This 4500.00 would have been 5500.00 If I would have known I was bankrolling them.

Anyhow, here are two very large companies whose policy are 90 days just so YOU know:
LaFarge (stone quarries, concrete, etc.) Corp.
Campbell Soups.

I won't do any work for Campbell soups anymore. After the 90 days they offered to pay by CC immediately and give themselves a discount or we could wait longer for the check.

Some of these corporations are downright awful.

 

[Texas_Signmaker]

Aren't there companies that will advance pay you on a PO and then wait / collect from the customer? Wouldn't that solve your problem if you paid in the cost of that service?

 

[#racewraps]

Some very good advice in this post, I'm sure we've all been here. For any and all new clients we are 100% pay up front until we get comfortable with each other. Then it typically moves to 50% deposit, balance on completion. We do not offer any of our clients net 30 / 60 / 90 etc., although we have had customers create their own terms and it was usually due to not having the proper verbiage of being assessed an interest fee of $..% per time unpaid. That happened once until we made that correction!

I agree offering clients a credit card payment option is also a great way to ensure cash flow stays on track. Many complain of the fees that the CC processor charges just be sure its added on the bill somewhere somehow if thats really a worry. I look at it like paying a small percentage to get paid now is much better than waiting to maybe get paid.

Anyhow, this is a great post, have learned a lot as well. Good to see others thoughts on this subject.

Good luck with your client, just be sure you make your point known and not let them run over you. Some people you just really have to spell it all out for!

 

[premiercolour]

It is a great question. I did enjoy the replies from everyone from the forum. It really comes down to if you could lose the client. Ask yourself. What if they decided to pay you off and move on and will never come back? There are several thousands of sign shops in Los Angeles. We have one customer that is 1/5 largest in LA. The accounting dept. decided not to pick up the call and ignored the invoice. We usually have customer pay upfront but since this is a rather larger company. ok. The rule is they cut check every Fridays. I understand it is corporate rule. So they didn't pay. up front I pursued more when past 1 month. Our term was 15 net. I gave them couple chances. No pay. Alright. I am ready to give them up. We sell automatic grommet machine to them. The grommet is customized made. There are only two companies that have this size in the world. Us and manufacturer. They don't know who the manufacturer is. It is either they throw away the best working $8,000 grommet machine or bring the payment to pick up the grommet. We were ready to lose the company because it is okay for us. They came back to pay with a check every time they pick up on Friday. But we have another customer, had four grommet machines out of state. We pushed them. They stopped buying. They buy 50,000 grommets each order, aprox. every 2 months. It is your decision to make; consequence to face. I would talk to them dearly, bring the most expensive cake in town and visit the payable. Can we do this xxxx starting January and I will not bother you for xxxxx or do this for you. A customer is not easy to find. A customer makes your schedule from 5 days 9-5 to 3 days 9-5 so you can spend your valuable time with the family . My opinion. Best luck to you.

Francis

 

[equippaint]

I believe its called factoring. We're always waiting for money, not that anyone likes to but it doesnt bother me. Keep enough money in the bank to float it, its a tool just like anything else. We wont give terms to small companies or 1 off jobs though.

Aren't there companies that will advance pay you on a PO and then wait / collect from the customer? Wouldn't that solve your problem if you paid in the cost of that service?

 

[Emd2kick]

Aren't there companies that will advance pay you on a PO and then wait / collect from the customer? Wouldn't that solve your problem if you paid in the cost of that service?

It’s called factoring. If they are miss paying invoices, or really late this may not be the best idea due to the vig as it grows daily. Also you need them to verify receiving/processing of the invoice etc...which sounds like he’s not able to accomplish due to how they lose or miss things.

Here’s the biggest issue, if you push back against the client they will find someone that will deal with there bullshit. Is there anything proprietary that you are doing...doubt it. They can throw a rock out of the window and hit another large format shop willing deal with this. The only time you’ll ever have leverage in this situation is if you can truly walk away and don’t mind losing the customer.

Good luck, I had to fire a long time customer recently. I had wanted to for years but couldn’t justify is from a $$ standpoint until recent growth allowed it.

 

[WildWestDesigns]

Many complain of the fees that the CC processor charges just be sure its added on the bill somewhere somehow if thats really a worry. I look at it like paying a small percentage to get paid now is much better than waiting to maybe get paid.

Be careful with this, some jurisdictions don't allow this.