Paying to Play

[Bigdawg]

We've noticed a trend with some of our clients. They are moving to "payment management system" vendors that require we register with the vendor and then pay a fee ($100-$250) annually to continue to do business with them. I'm assuming payment comes from that vendor and not our actual client, but I'm not sure because so far, we have declined to register with any of them.

Anyone else seeing this? What do you do?

 

[rjssigns]

First I've heard about it. Sounds like another revenue enhancement scheme.

 

[Gino]

Some of ours are doing it by simply taking longer to pay. However, it's all municipal type customer deals that are doing it so far.

Actually pay to play, not really. Is that to stay on some kinda bidding list ??

 

[Bigdawg]

Some of ours are doing it by simply taking longer to pay. However, it's all municipal type customer deals that are doing it so far.

Actually pay to play, not really. Is that to stay on some kinda bidding list ??

No. These are current customers who have gotten rid of their accounts payable depts and are going to these services. There's a few big clients that we may do it for, but as it stands now we don't pay anyone to be a vendor. In order to bill them, it has to go through this (paid for by us) service.

 

[bannertime]

We deal with payment management companies and some have required us to pull outrageous amounts of insurance for certain jobs, but we've never had to pay them for anything. That's ridiculous.

 

[Gino]

Sounds like a pretty good gimmick. Recoup some of their costs.

Just think about it from their end. If they deal with many many vendors, they could save $1,000's a year. Hmmmmmm...................

 

[gnemmas]

We have few accounts are doing this. they still pay by our terms (net 30). Either by credit card or ACH. When I informed them that we are began charging convenience fee, then we switch to direct deposit. It is somewhat leery at first to set up ACH as we need to give them our bank routing & acct #, plus a void check. But these are large companies. Been paying more timely.

 

[fresh]

Why not just add that in to their invoice? Like, if they charge you $250 a year for the ability to be paid, then you charge them a $300 Admin Fee for doing additional paperwork and covering the fee.

 

[10sacer]

One of my bigger clients is a national broker. They produce nothing. They get an account and sell them on their software and job management abilities. They then go out and find vendor partners that can produce the work needed and beat them (the vendor) up on price and then add their markup and sell back to original customer.
Just got notification that they are going to a sourcing solution program called DB Alliance and in order to continue doing business with them I have to pay between $1000 and $3000 to be even labeled as a preferred vendor. They then make it very clear that there is no guarantee of any business - just pay us and you are in a very large pool. I suppose this works out well for all of their commercial paper print clients that they can bid with suppliers all over the country, but I don't see it working too well with signage and graphics customers. Not sure i will continue down this path of paying for their software so they can do business with their clients.

 

[Billct2]

That's a new one. We have a couple clients that use outside vendors to run their bills through, but other than the time to set up the account there was no other cost involved. Sounds like a real BS move, we fired out office staff, subbed it out and now want you to pay for it. It would be like we started charging a fee to write their invoice. Getting really tiresome dealing with all the paperwork these days.

 

[Texas_Signmaker]

Yea just add $$ to their invoice. Never heard of this though.

Not the same thing ... but for me to do work with the school systems around here, I have to pay an annual fee to one of three buying co-op's and "bid" on "something" just to be in the system. By "bidding" your entered into the system for a year and have to be reviewed by a board to be approved. Everyone who pays the annual fee is approved. Such a scam, but I'm making $$ from the schools so I'll play along.

 

[TimToad]

Is there anything in this frickin' country not susceptible to some middle man trying to force themselves into the equation or extract something for little effort?

A headline this morning revealed how some puppy mill was selling "pretrained service dogs" for thousands of dollars but in reality they were just mass bred puppies just any other.

After 9/11, the NY Attorney General's office discovered over 5,000 fake charities were started.

In our own industry, there are the franchisors and now one named SIGNWORLD NETWORK appears to be generating some real doubts and questions by those who bought in about some its income potential claims, retention, advertising claims, etc.

 

[Solventinkjet]

We just got hit for $600 and a lot of paperwork to be able to bid on federal contracts. We have been doing federal contracts for almost 20 years and never had to pay until now.

 

[tbullo]

We pay a $75 fee to one of our commercial property management companies we work with. When they started doing this a few years ago, our contact just told us to add the fee onto the invoice. I think they did it to make sure the vendors had insurance coverage.

 

[BIG EASY DOES IT]

We see this with various property management companies. Usually you pay to be on the new companies vendor list. If you don't want to pay they don't advertise you to their other companies that they do AP for. The company you work for still submits the invoice for payment though even if you don't pay to be on the list.

 

[equippaint]

The big brown shipping company does this. We have some others with outside a/p companies that dont charge but it's still a pain. Its a wonder why people even do business with half the companies in this country.

 

[CanuckSigns]

A bunch of local municipalities and government agencies here have switched to an online site called biddingo here for putting out tenders and RFQ's you have to buy a membership for around $300 a year just to be notified of a bid, we tried it for a year and didn;t get a single job from it. Our city was using it and getting quotes from shops all across the country, went with the lowest bidder everytime.

 

[TimToad]

Has anyone being forced to engage in this been happy about the resulting predictability of receiving payments?

We have very few large, corporate clients, but we do have plenty of smaller, independent ones who use one particular local bookkeeping service to pay their bills and she is notorious for having to be reminded multiple times to pay an invoice.

 

[equippaint]

A bunch of local municipalities and government agencies here have switched to an online site called biddingo here for putting out tenders and RFQ's you have to buy a membership for around $300 a year just to be notified of a bid, we tried it for a year and didn;t get a single job from it. Our city was using it and getting quotes from shops all across the country, went with the lowest bidder everytime.

Onvia demandstar is the same. It doesnt seem right to force people to pay to bid on governement work.
Its not the same as what the op is talking about though.
This is where companies use an outside company to manage vendor payments. Then this company charges you to be setup as a vendor. If you dont pay, you cant do work for the company since you are not in their system. Like a mafia for corporations.

 

[Texas_Signmaker]

Has anyone being forced to engage in this been happy about the resulting predictability of receiving payments?

We have very few large, corporate clients, but we do have plenty of smaller, independent ones who use one particular local bookkeeping service to pay their bills and she is notorious for having to be reminded multiple times to pay an invoice.

Payment up front!