Paying to Play

[Bigdawg]

...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.

That's it exactly. We would still provide all our insurance info, etc to our client. And the info the payment company asks for is really none of their business. They want stuff like the owner's personal info including DOB. Not happening.

 

[Chasez]

We have a few things like this that we deal with on a daily basis... one is a major nation wide construction company and it costs us $50 to accept a job... so we started to add that onto quotes each time but when its only a $200 it becomes tiresome the amount of added work to deal with the PMS so we pretty much told them we were not going to work for them anymore... and since we are the only place in our area that can sell certain products they decided to bypass the system and direct bill. It took a few fights with them but eventually worked out in our favor.

Another one we see are bidding systems like Coolnet which charge you a fee to access drawings for bidding (or you can pay an annual fee). Why am i going to pay just to view the project drawings... we've done one or two and said enough since we weren't getting the jobs. Since declining to bid on a bunch to our regular customers they have started to save copies of the drawings and send to us.

Needless to say for the large companies these systems are huge $$ savers since they don't need much for an accounting staff, but for all the smaller sub-trades it becomes a major PITA!

Chaz

 

[TimToad]

Payment up front!

We get 50% deposits on most projects with balance due upon completion and can count the number of times we've ever been stiffed on one hand.

Our community size, the decent, honest, salt of the earth nature of most of our clients, and our perception of people after owning multiple businesses across several types makes us trust people and we are rarely in the position of ever having to go bust kneecaps over getting paid. We spend very little time on collections and our cash flow is usually sitting at several months worth of total expenses.

I applaud those who can collect 100% of a job up front, but its not our style and feel that the number of potential clients lost over making it a hard fast policy is too great to experiment with.

 

[TimToad]

That's it exactly. We would still provide all our insurance info, etc to our client. And the info the payment company asks for is really none of their business. They want stuff like the owner's personal info including DOB. Not happening.

They probably want that personal info in case they ever had to litigate against the owner for some reason or if a payment is over $10k, it gets reported to the feds.

 

[equippaint]

We have a few things like this that we deal with on a daily basis... one is a major nation wide construction company and it costs us $50 to accept a job... so we started to add that onto quotes each time but when its only a $200 it becomes tiresome the amount of added work to deal with the PMS so we pretty much told them we were not going to work for them anymore... and since we are the only place in our area that can sell certain products they decided to bypass the system and direct bill. It took a few fights with them but eventually worked out in our favor.

Another one we see are bidding systems like Coolnet which charge you a fee to access drawings for bidding (or you can pay an annual fee). Why am i going to pay just to view the project drawings... we've done one or two and said enough since we weren't getting the jobs. Since declining to bid on a bunch to our regular customers they have started to save copies of the drawings and send to us.

Needless to say for the large companies these systems are huge $$ savers since they don't need much for an accounting staff, but for all the smaller sub-trades it becomes a major PITA!

Chaz

The online plans are pretty helpful if you're a contractor though. IIRC we used to have run around town to pick up blueprints to bid. Then to bid to any out of area contractors you had to do quite a bit of phone work to get a set or plans, then either have them mailed or go to a local copy shop to print them out. It has probably inconvenienced a few but all in all I'd say it's better.

 

[Chasez]

The online plans are pretty helpful if you're a contractor though. IIRC we used to have run around town to pick up blueprints to bid. Then to bid to any out of area contractors you had to do quite a bit of phone work to get a set or plans, then either have them mailed or go to a local copy shop to print them out. It has probably inconvenienced a few but all in all I'd say it's better.

Don't get me wrong, online plans are great. That's pretty much how we quote everything now is by online drawings... but we refuse to pay for plans not knowing if we are going to get the job or not. Most of the time the GC's will upload them to their FTP site (or similar) and provide a link to be able to download the drawings (which doesn't cost us a thing). This way is great as it gives quick easy access and doesn't put you out of pocket if you don't get the job especially since we compete with quite a few shops where we are.

We rarely print out drawings as there is no need... everything can be scaled out on the pc to quote. In the odd case that we do we just throw it on one of our printers, then scale on the pc and write on the drawings... takes the worry out for making sure the drawing prints to the correct scale.

Chaz

 

[HandsomeBob]

We has a client that tried to implement this "vendor pays" system a few years ago. The management of their AP was overseas. Ultimately most of the client vendors flagged out of the pay for play system because the AP management company wanted a large flat fee regardless of how much business you did with the client and the AP company wasn't paying the bills as promised.

SOLUTION: Credit cards.

 

[SightLine]

A LOT of major hospitals have gone to these setups as well. One of the biggest is GHX Vendormate. I despise it and have refused to pay. Interestingly the main one we do work for still does business with us. They just make an exception and pay us directly. Sorry but I'm not going to pay for the privilege to sell you something. I have already done so by investing in our business so that we can provide the services we do. If it really comes to this on massive levels, that will be the time for me to retire. I also see some state well get deposits and payment up front. That is not going to work out for you when you are doing business with multi-billion dollar corporations and big government.... You get paid after the job is done from them. At best, on bigger projects you can generally get an allowance for progress invoicing payments.

 

[visual800]

everything has gotten out of control. everything is so difficult now. Im older than a lot of you guys and I have the luxury of doing this but we dropped all federal bidding and all large contractor bidding. So sick of jumping thru hoops and wasting time. there is no sense in people getting between us and our money

 

[Jester1167]

Ariba Systems - State of Florida and 3M. Chargers are based on the amount of business you do...

 

[Johnny Best]

I have been an Ariba supplier for years. Does not cost anything. Submit your bill to the company, you log on the Ariba website after a couple of days, see the bill and process it through the website, sometimes up to 40 days to receive money but you can see when it was sent out and it figures all the state taxes that need to be paid. Also receive bids for what your business is listed for and it is a great system for collecting money. You can also process your bills right through Ariba if the company you are doing work for has it set up for you. Someone in the company will see the bill in their inbox and approve for payment. A lot of companies put all their bids out through Ariba and it works out good for me. But have never paid a fee for the service. I must get one to two bids a week in my inbox from Ariba.