Getting deposits from contractors

[Jean Shimp]

I'm getting jobs from building contractors to supply and install ADA interior signs in new buildings. So far these are $5 to $10k jobs with not a lot out of pocket costs. The contractors pay on a monthly basis after a request for payment is submitted through their website software. The software asks for the value of the work completed to date when requesting a payment. I don't mind fronting the money to buy the signs from my supplier and get paid within 30 days of installing. However, a project I am working on has been delayed which puts me out another month. My question is, are other sign companies asking and getting deposits for a job that could be $10k or more? The contracts I am getting say they don't pay me until they get paid by the property owner. This seems to be a standard practice in the building industry. Thoughts on this? Would you pass on a good job if you could not get a deposit?

 

[unclebun]

The builders get partial payment upfront before they start building. I don't see how you can think $25-$50 a pop for ADA signs at wholesale is trivial.
We get 50% prepayment on the whole invoice before we order the signs when we do ADA signs.
If they say there is no other option than to wait for payment, then I would build an extra 5-10% into the cost to cover the interest on the money they are borrowing from you, which can be discounted if they prepay 100% or 50%.

 

[Gino]

For the most part, if a request comes in from a good existing customer, we will not ask for a deposit up to maybe $3,000. After that, we explain, they are basically financing their own job, instead of us, regardless of what out-a-pocket costs will be. Unfortunately, you've created a pattern and they know they can sponge off you. Not good. My view has always been, what if there's a little hiccup, like you explained with yours being delays. What if 2 or 3 others all have hiccups at the same time. Can you weather that ?? Don't know if I can, but I don't wanna find out, either.

Also, who is the customer ?? Them...... or their customer ?? I rarely, like in almost never, wait til someone else gets paid. Puts me too far outta the loop. I don't have control of my own work.

I don't think an automobile dealership pays for the tires, paint job or bumpers after the sell the car.

 

[2B]

We have found the invoicing of the product and labor are placed on separate invoices works good,
This way as soon as production is done you can bill them, and then bill once installation is completed.

 

[equippaint]

We don't take deposits from most companies. Only from the onsie twosie guys and small contractors. It's pretty common in contracting to not get paid until the GC is paid. Most GCs wouldnt be able to cash flow multiple projects so this is how they have to do things, On new construction, 5-10k is small potatoes and you could probably negotiate net 30 terms regardless of their payment stipulations. Make sure you file NTOs on the front side too.

 

[Jean Shimp]

We don't take deposits from most companies. Only from the onsie twosie guys and small contractors. It's pretty common in contracting to not get paid until the GC is paid. Most GCs wouldnt be able to cash flow multiple projects so this is how they have to do things, On new construction, 5-10k is small potatoes and you could probably negotiate net 30 terms regardless of their payment stipulations. Make sure you file NTOs on the front side too.

 

[Jean Shimp]

Regarding the NTO (Notice to Owner) on some of the contracts I am seeing the owner may be a government entity or a large corporation. Knowing how to reach the "owner" is my question. What little experience I've had in these situations the GC doesn't give out owner's information. How would I find out the information needed to file the NOC form?
Thanks.

 

[equippaint]

Regarding the NTO (Notice to Owner) on some of the contracts I am seeing the owner may be a government entity or a large corporation. Knowing how to reach the "owner" is my question. What little experience I've had in these situations the GC doesn't give out owner's information. How would I find out the information needed to file the NOC form?
Thanks.

You cant notice govt owned property. As far as the rest, there should be be nto services that will do all of the leg work.