outstanding invoices

[reQ]

A good friend of mine, who owned pretty big wood processing plant along with his own trucking company, told me that you can't get them all and i understand it but still... somewhere deep inside i want them all

 

[Gino]

Ya know the old saying..... the grass is always greener on the other side of the fence ?? Well, don't worry about what's not yours..... worry about what you have and take care of it. It's like that with anything from a wife, to a customer to your own soul.

 

[bernie]

Pick your customers differently?

I honestly don't know how businesses survive when they do a job, pay employees, cover overhead and get payment on invoices 30, 60 or 90 days
later. OUCH! Takes a lot of time to chase money.

Every business needs to set their own policy on payment and it has to work for them. If it doesn't work for the customer - oh well ... one needs to not be afraid to walk away from a job that is not going to keep your cash flow moving.

My business is different than yours but I have a sign posted in my shop that says "no work begins without payment, no job is picked up without
final payment". 80% of all my jobs are paid in full prior to my cutting stencils for sandblasting, roughly 10% I get 50% down "only if" its a customer owned rock or glass with final payment due upon pick up and the other 10% are county, city or university that are invoiced and I get a check in roughly 2.5 weeks.

Occasionally I will get the customer that will automatically assume I will invoice them as "everyone else does it that way" ... I simply say, my payment policy is what has kept my cash flow moving and kept me in business all these years. And I will usually add that I am lousy at chasing
payment so I don't do it. I definitely do not take in as much $ nor produce nearly the amount of work that you guys do but, this policy has
worked for me for many years.

 

[Techman]

You have to understand that big account would not deal with you if you will demand your payment right away.

I have nothing to understand. I do not care what they say I run my company my way.
I have yet to be told no by anyone or any company for COD. Its simple. Tell them its paid when delivered and you get paid..

The old days of holding money 30 days are over with these new payment systems in place.

 

[iSign]

I offer 30 day terms...

... by accepting most major credit cards!

 

[Jillbeans]

After 30 years, I finally grew a set. Cash up front if under $100.
50% deposit on anything else.
You can call and email but some people just don't care.
Try to take care of the problem before it arises.
Nothing should leave your shop without your getting paid.
Love....Jill

 

[heyskull]

Money up front or the door!

SC

 

[Marlene]

Hello everyone!
my question is what trick and tips have you discovered to get customers to pay up signs they got when you were not noticing or looking, or, in your shop at the time, when they escaped with their sign order....
My A.R. has ballooned up a little too much for my liking.

Christopher

how many of these do you have? also how did they pick up their signs if you were a the shop? did someone at your shop just let them come by and leave with the signs? how did that happen as shop policy is concrete no matter who is working the shop. as far as collecting goes did you clearly state on your contract with these customers your payment terms?

 

[CanuckSigns]

Pick your customers differently?

I honestly don't know how businesses survive when they do a job, pay employees, cover overhead and get payment on invoices 30, 60 or 90 days
later. OUCH! Takes a lot of time to chase money.

Every business needs to set their own policy on payment and it has to work for them. If it doesn't work for the customer - oh well ... one needs to not be afraid to walk away from a job that is not going to keep your cash flow moving.

My business is different than yours but I have a sign posted in my shop that says "no work begins without payment, no job is picked up without
final payment". 80% of all my jobs are paid in full prior to my cutting stencils for sandblasting, roughly 10% I get 50% down "only if" its a customer owned rock or glass with final payment due upon pick up and the other 10% are county, city or university that are invoiced and I get a check in roughly 2.5 weeks.

Occasionally I will get the customer that will automatically assume I will invoice them as "everyone else does it that way" ... I simply say, my payment policy is what has kept my cash flow moving and kept me in business all these years. And I will usually add that I am lousy at chasing
payment so I don't do it. I definitely do not take in as much $ nor produce nearly the amount of work that you guys do but, this policy has
worked for me for many years.

This is not always an option, i would estimate that 85% of our clients have net 30 or net 60 terms with us. Sure some walk-in off the street pays 100% up front, but the reality is, if you deal with large companies, you have to accept their terms, if we tried to insist that General Electric pays us before we ship their job, we would be dropped as a supplier instantly.

Out Accounts Receivable is pretty much always $40,000 - $90,000, it's just part of doing business with larger companies, the up side is that generally once they are happy with your service & product, they generally don't start price shopping.

Plus it's always nice when that BIG cheque comes in the mail!

 

[2B]

This is not always an option, i would estimate that 85% of our clients have net 30 or net 60 terms with us. Sure some walk-in off the street pays 100% up front, but the reality is, if you deal with large companies, you have to accept their terms, if we tried to insist that General Electric pays us before we ship their job, we would be dropped as a supplier instantly.

Out Accounts Receivable is pretty much always $40,000 - $90,000, it's just part of doing business with larger companies, the up side is that generally once they are happy with your service & product, they generally don't start price shopping.

Plus it's always nice when that BIG cheque comes in the mail!

+1, we run into this A LOT, and even then some of the companies take 90 days for payments.
The 2 things that help keep the AR lowered on the big companies

• Have a PO before starting the fabrication
• Send the invoice as soon as the PO is received.

For the customers who request NET terms they have to do a full credit check and jump through all of the hoops.
anyone who does not do this or refuses to, its payment in full under $250 and a 50% down payment on receipt.


Granted there are still cases that slip through the cracks and don't pay. for these its turned over to a collection agency

 

[CanuckSigns]

+1, we run into this A LOT, and even then some of the companies take 90 days for payments.
The 2 things that help keep the AR lowered on the big companies

• Have a PO before starting the fabrication
• Send the invoice as soon as the PO is received.

For the customers who request NET terms they have to do a full credit check and jump through all of the hoops.
anyone who does not do this or refuses to, its payment in full under $250 and a 50% down payment on receipt.


Granted there are still cases that slip through the cracks and don't pay. for these its turned over to a collection agency

We do this for some clients, other clients won't accept an invoice for a PO that has not been received in their system, so we can't invoice until the job had been delivered.

on another note, we got a request to quote on an interior signage job for a new hospital, HUGE job, but the client would only accept net 60 terms, with a 10% holdback untill 1 year after the project was complete, so we would be looking at a minimum of 2 years to collect on the last 10% We had to pass on the job, we didn't have the finances or the manpower to complete that size of a project, we would have had to float them around $120,000 for 60 days, we just can't afford that kind of $, especially on a client we have had no dealings with in the past.

 

[fresh]

we got a request to quote on an interior signage job for a new hospital, HUGE job, but the client would only accept net 60 terms, with a 10% holdback untill 1 year after the project was complete, so we would be looking at a minimum of 2 years to collect on the last 10% We had to pass on the job, we didn't have the finances or the manpower to complete that size of a project, we would have had to float them around $120,000 for 60 days, we just can't afford that kind of $, especially on a client we have had no dealings with in the past.

We increased our sales by over 35% by working with a company whose payment terms SUCK. The first job we did for them, I actually included the costs in loan I was applying for (timing is everything, right?), and then payed it off as soon as we received the check. Honestly, it took closer to 6 months to be paid, but for the amount of profit, I was okay with waiting. The next job we were able to loan ourselves the money we made off the first one to cover expenses... By the third job, I started getting a bit smarter and added in an extra % to the overhead cost (I'm not a bank, a loan from me will cost ya). When my client complained to me about how much everything cost (he was just being a pain), I said I'd give a discount if we were paid in a more timely manner. He shut up about it. The 10% holdback is what it is, and its common in the construction industry. Signs are often one of the last things to go up, so we haven't had to wait a year to get paid in full. Also, that 10% is almost all sales tax, so its not really me waiting on the $$, its our state treasury.

The thing that is AWESOME about all of these jobs is the labor must be billed at Prevailing Wage. IDK about you, but I sure like being required to pay myself about $65 /hr to install small interior signs. The waiting on the $$ is hard, but if you can get into something like this, it is profitable.

 

[BIG EASY DOES IT]

We increased our sales by over 35% by working with a company whose payment terms SUCK. The first job we did for them, I actually included the costs in loan I was applying for (timing is everything, right?), and then payed it off as soon as we received the check. Honestly, it took closer to 6 months to be paid, but for the amount of profit, I was okay with waiting. The next job we were able to loan ourselves the money we made off the first one to cover expenses... By the third job, I started getting a bit smarter and added in an extra % to the overhead cost (I'm not a bank, a loan from me will cost ya). When my client complained to me about how much everything cost (he was just being a pain), I said I'd give a discount if we were paid in a more timely manner. He shut up about it. The 10% holdback is what it is, and its common in the construction industry. Signs are often one of the last things to go up, so we haven't had to wait a year to get paid in full. Also, that 10% is almost all sales tax, so its not really me waiting on the $$, its our state treasury.

The thing that is AWESOME about all of these jobs is the labor must be billed at Prevailing Wage. IDK about you, but I sure like being required to pay myself about $65 /hr to install small interior signs. The waiting on the $$ is hard, but if you can get into something like this, it is profitable.

PW jobs are the best. Go from installing roadway signs for $15 an hour to doing the same thing with $56 pay. Sign me up.

 

[CanuckSigns]

We increased our sales by over 35% by working with a company whose payment terms SUCK. The first job we did for them, I actually included the costs in loan I was applying for (timing is everything, right?), and then payed it off as soon as we received the check. Honestly, it took closer to 6 months to be paid, but for the amount of profit, I was okay with waiting. The next job we were able to loan ourselves the money we made off the first one to cover expenses... By the third job, I started getting a bit smarter and added in an extra % to the overhead cost (I'm not a bank, a loan from me will cost ya). When my client complained to me about how much everything cost (he was just being a pain), I said I'd give a discount if we were paid in a more timely manner. He shut up about it. The 10% holdback is what it is, and its common in the construction industry. Signs are often one of the last things to go up, so we haven't had to wait a year to get paid in full. Also, that 10% is almost all sales tax, so its not really me waiting on the $$, its our state treasury.

The thing that is AWESOME about all of these jobs is the labor must be billed at Prevailing Wage. IDK about you, but I sure like being required to pay myself about $65 /hr to install small interior signs. The waiting on the $$ is hard, but if you can get into something like this, it is profitable.

I've never heard of this Prevailing Wage, can you elaborate?

Edit: Nevermind I assume it's an american thing.

 

[BIG EASY DOES IT]

Yea it is an American thing haha. Basically its for union contracts with city, state, or federal funds. They basically say if you want this job you have to pay your guys prevailing wage. You can also charge for it. But basically a PW is the median wage for all workers in the biggest area.

Prevailing Wage is defined as the hourly wage, usual benefits and overtime, paid in the largest city in each county, to the majority of workers, laborers, and mechanics.

 

[CanuckSigns]

We increased our sales by over 35% by working with a company whose payment terms SUCK. The first job we did for them, I actually included the costs in loan I was applying for (timing is everything, right?), and then payed it off as soon as we received the check. Honestly, it took closer to 6 months to be paid, but for the amount of profit, I was okay with waiting. The next job we were able to loan ourselves the money we made off the first one to cover expenses... By the third job, I started getting a bit smarter and added in an extra % to the overhead cost (I'm not a bank, a loan from me will cost ya). When my client complained to me about how much everything cost (he was just being a pain), I said I'd give a discount if we were paid in a more timely manner. He shut up about it. The 10% holdback is what it is, and its common in the construction industry. Signs are often one of the last things to go up, so we haven't had to wait a year to get paid in full. Also, that 10% is almost all sales tax, so its not really me waiting on the $$, its our state treasury.

I'm not comfortable getting a huge loan from the bank to do a job for a customer, especially a new customer, at the end of the day, if the client files bankruptcy, you are still an unsecured creditor and therefore at the bottom of the totem pole for getting paid (if they even have any money left by the time they get to you).

We had a client for about 15 years who was a major construction company, we did quite a bit of electrical tag engraving for them. They got a huge project to build a new hospital, I think it was a 300 million dollar project. We never even got a change to quote on the electrical tags for the job, we were pretty ticked off. then we get a letter from their lawyers, turns out they bit off more than they could chew and they had filed for bankruptcy, they owed over $85 million dollars, mostly to banks, developers and other secured creditors. Then we looked at the list of creditors owed, and the local low-ball shop down the street was listed as being owed almost $30,000, i guess they got the contract for the tags. For once we were very glad we didn't get the job!

 

[Gino]

Who in this industry is installing signs or whatever for $56. an hour, let alone $15 an hour ?? You think that's good ?? Hire someone to go for you and stay inside where you can at least be making a profit.

We don't go out for less than $185 an hour, with the second hour costing $145. and on. I did 2pcs 5' x 8's about 12' in the air on Friday and got $ 575. for the instal alone. Packing up the truck is included in that, too. From the time I left the shop, til I got back was 2.75 hours. By myself. The signs cost an additional $1,330. Signs took about an hour all total to print. Non laminated.

Nothing prevailing about that, other than prevailing winds that day. Yuck-O.

 

[fresh]

I'm not comfortable getting a huge loan from the bank to do a job for a customer, especially a new customer, at the end of the day, if the client files bankruptcy, you are still an unsecured creditor and therefore at the bottom of the totem pole for getting paid (if they even have any money left by the time they get to you).

We had a client for about 15 years who was a major construction company, we did quite a bit of electrical tag engraving for them. They got a huge project to build a new hospital, I think it was a 300 million dollar project. We never even got a change to quote on the electrical tags for the job, we were pretty ticked off. then we get a letter from their lawyers, turns out they bit off more than they could chew and they had filed for bankruptcy, they owed over $85 million dollars, mostly to banks, developers and other secured creditors. Then we looked at the list of creditors owed, and the local low-ball shop down the street was listed as being owed almost $30,000, i guess they got the contract for the tags. For once we were very glad we didn't get the job!

The company I do work for's contracts are exclusively government / public entities. The organization who hired me is just the project manager, the projects they work on are 100% government funded. I guess this makes a bit of a difference, and I'd have a hard time with that big a loan as well. ESPECIALLY since I know Net 60 really means "Net 60 after 30th of the month that you had all your paperwork in, signed, sealed, certified. And that is only if the funds were not held up because the bank was closed on a Sunday in May."

 

[fresh]

Who in this industry is installing signs or whatever for $56. an hour, let alone $15 an hour ?? You think that's good ?? Hire someone to go for you and stay inside where you can at least be making a profit.

We don't go out for less than $185 an hour, with the second hour costing $145. and on. I did 2pcs 5' x 8's about 12' in the air on Friday and got $ 575. for the instal alone. Packing up the truck is included in that, too. From the time I left the shop, til I got back was 2.75 hours. By myself. The signs cost an additional $1,330. Signs took about an hour all total to print. Non laminated.

Nothing prevailing about that, other than prevailing winds that day. Yuck-O.

Gino, $56/hr is equivalent to about $115K a year in salary. No, I do not make $115K a year, nor does my partner. So YES, is someone wants to pay me and my partner (who is also my husband) almost $4500 for a week's work, I'll take it. If you taking home over $230K a year, then great! Good for you. My husband and I aren't quite at that level yet. Also remember, that rate is only for the install, not for anything else. If you happen to pay your installers more than $56/hr, are you hiring?

Also, I'm very happy that you are able to get so much $$ for simple jobs from your clients. But in your example, I assume you were using a bucket truck and swapping facing on a lightbox. That is a little more specialized and difficult than sticking room numbers on doors. If you told someone you were going to charge them $185-$145 (a person I assume, because $56/hr is per worker), they would laugh you out of the room.

Personally, I'd rather go out and pocket the $56/hr, pay a few people significantly less than that to run the shop for a few hours while working on other jobs that are generating us, our employees, and our business an income.

 

[Gino]

Can we look at your math ?? Perhaps this is where I'm missing something. Since when is $4,500 a week a person's income based on $56 per hour ?? If that's the both of you, who is back at the shop working, still making signs ?? Does all production stop, when you're making $56 an hour ?? Hardly seems profitable.

It's sort of a how you look at it, kinda deal. If you could bill out $56 an hour for almost 2,100 hours, you'd be happy, but wouldn't you be happier at $85 an hour sitting in your shop doing what you do best, rather than being out there some 2,100 hours doing harder work ?? Then to boot, pay someone $25 or $30 an hour and keep 1/2 of it.

 

[J Hill Designs]

the thing with prevailing wage is, the actual laborer has to be verifiably getting that while on the job (unless owner-operator) -- so the shop rate, the billed hourly rate, will be MUCH higher than that.

 

[reQ]

I would be on a street living in the carton box if i would charge $56/hr. but maybe its just me...