Payment to sole proprietors...

[TyrantDesigner]

There are only 2 companies we let get graphics without a deposit and have a pay later policy. (they are LARGE companies ... and they do hundreds of jobs a year so it's actually easier for us to get multiple invoiced paid at once on their schedule than pay at pickup.) otherwise all require 50/50 with only a few not needing deposit but all needing final payment when job is done.

 

[Mosh]

1. First thing, give them an invoice when they order and tell them they need a check to pick the oder up, 2. second take credit cards.... Other than that sit and wait! Been there done that...see 1 & 2

 

[GypsyGraphics]

We have terms with almost all of our suppliers, don't you?

i wasn't referring to B2B and retail, not wholesale/trade.
although the sign supply and printer i use most often, don't offer terms. they just keep my cc on file and charge to it.

 

[visual800]

We do alot of a big stuff, channels, monuments, routed pvc plaques. If their job is over $2000-$3000 Ill ask for 50 down or if I have a bad feeling about the customer Ill ask for 100% down just to get rid of them OR to make damn sure its paid. As many times as I have stated 50 down and 50 upon completion that aint worked. For some reason people just dont like to pay damn bills.

We have good luck collecting over the years the most non collects we had were businesses closing. Ill go thru every avenue when client starts avoiding me. Repo, bashing them on a public board Ill do whatever I can usually it works, the repo is the best

 

[Farmboy]

Order paid in full before we begin work. The only exceptions, schools, gov. organizations ...and then we request a PO. Plus what ddarlak said, you have to pay when you purchase.

 

[tsgstl]

New customers paid in full upon completion.
Over $1000 50% up front
Accounts 30 days (90% of your collection problems) I never offer this, wait for them to ask and then weigh their worth and risk.

Make personal relationships with EVERY CUSTOMER. if they care for you and your family/business you are going to have a much easier time getting paid. We have several large accounts with nationwide businesses and even if who we deal with has no control over payment, they will fight for you or find ways around long paying cycles. If they have a personal need for something, give it to them free or at cost (to a certain degree obviously) with some of our larger accounts we back date invoices to speed up the process. This would never be possible without personal relationships with the one who orders.

If possible have the person dealing with the customer different than the one contacting them when they are late. This avoids shame when they need something next time and also gives you another level to contact them when that doesn't work. When you have several calls in with one person and then the employee that deals with them calls it makes a big difference.

Problems are going to happen and it is going to effect you timewise and your cash flow.

Edit: after reading these replies my shop might be different than most. I am burried in a industrial park. 75% + of my sales are from customers we have accounts with. I have very little walk in traffic, I figured out long ago that it's not worth dealing with a customer for 20 minutes over a $20 sign. Nor is it worth paying high rent for small signs. Most of my customers don't have ways of paying up front or upon completion. Or if they do it is not convenient. Although at times I have issues getting paid in a timeframe I am happy with I have always been paid. The handful I have been not paid from (less than $1000 over 10 years) have been from smaller guys.

 

[Moze]

I really appreciate all of the feedback...I'm still processing everything.

I do non-illuminated installations and site/sign surveys. I don't know if it's the same norm to ask for a deposit for that kind of work as opposed to some of the work you folks are doing (graphics, etc.).

 

[Border]

No matter who i'm dealing with, the terms are 50% deposit. For most it's balance due upon completion or delivery, but for larger companies i do allow for their billing cycle (within reason).

This is exactly what my terms are as well. I usually make that clear in the very first communication with potential clients/jobs.
Sometimes I will go with a smaller deposit where some design work is needed to determine the final cost of the project at hand. Then it's 50% of the balance before going into production.

 

[Gino]

You need to remember one thing…….

Whose business is it ??
Second…… who came to who for work ??

There is nothing wrong with whatever size your business is vs. what size business you’re dealing with as to who pays deposits or not.
​

For us…. anyone over $100 pays 50% up front. Sometimes we waive that for $500 minimum deposit if it’s a long standing repeat customer.

Taking deposits and collecting balances within 10 days of billing is about the healthiest cash flow system you can get. We have deposits coming in from $150 up to $96,000. That was the largest on any one time deposit for us.

Any good business doing business with you knows you cannot finance their huge multi-million dollar company. Therefore, it would be normal for the customer to help finance their own project to keep their own costs down. If you had to get a Line of Credit for each and every job you needed to finance for these big companies… you’d practically be in the banking business.

With some businesses, according t how they are set up structurally, they must take advantage of any early payment incentive available…. even if it’s ½%. They have to by law protect their share/stock holders they are getting the very best deal available.

Any company which refuses to give a deposit and expects you to carry them is not worth it. If they don’t have the money to finance themselves…. it’s only harder getting the first and second halves of your money afterwards… and they are generally the kind of customers who want 90 day terms and find excuses not to pay anything on time. Stay clear of those guys and let your competition have them and act a bank part-time.

 

[sar bossier]

Thanks to all of you for your responses.


So for those of you who require a deposit, and who haven't already mentioned it, what services do you provide (vinyl, wraps, sign servicing, etc.)?

I'd like to get a feel of how many of you that charge a deposit are dealing with customers face to face (ie: storefront business) and how many receive business via email/phone/etc. I'm curious if that makes a difference.




Can I ask how you arrived at the $701 as the dividing line?

Can you direct me to the post by Gino that you're referring to?

http://www.signs101.com/forums/showthread.php?t=91409&highlight=posts+by+gino

Above is the link I was referring to. I have an actual storefront, and I came to the 700.00 minimum based on average sales. Originally I set it to 500.00, but found that I felt more comfortable raising it when I had customers balk if AFTER TAX it was even pennies over 500.00, and that my average sales were about 524.00 ish. I really think it is reasonable to get all of the money up front, when possible, since we pay most costs up front, and most projects can be completed fairly quickly in this price range. As to the 50/50 rule, it was our policy from day 1 - DON'T design it, or do ANY work without some money in hand. Had a sales rep that went around me to my designer for a large oilfield company, and did a LOT of design up front for an expensive project, and when they got the design they were looking for, said we were too expensive, and took the design to their contractor to complete. NEVER AGAIN. ALWAYS get AT LEAST 1/2 up front, BEFORE you do ANYTHING. My opinion & experience.

 

[SD&F]

We require 50 upfront and 50 when shipped/delivered/or picked-up. We do anything from $300.00 and up(as high as I can get em'). We do signs of any and every kind, LED's, Monuements, CNC, V-groove,sandblasted...etc. I don't care who they are. If I get a PO # from a county or government, I still try to get my 50% upfront. If I have to wait, it is only for those type of jobs and I try to collect in 10 days or less.I will collect upfront on less than $300.00 and moving that to $500.00 soon.

 

[royster13]

No one seems to want to address whether or not asking for a deposit or 100% up front affects gross sales.....

There is no doubt that such policies help your cash flow but I am not so sure it makes you more money at the end of the road.....

I can not imagine a client calling me to tell me he is going elsewhere because he does not not like my payment policy....They just leave without much fanfare.....

 

[SD&F]

That is true, it usually isn't the payment policy. If they don't like it, they will try and negotiate. You can make a decision at that time.

 

[TheSnowman]

For me, it depends on the customer. If someone I've never done business before comes in, they generally pay when they pick it up. If it's a larger job and I don't know them, they'll pay 50% or 100% up front for it. If it's someone I don't trust at all, (and yes, I judge every single person that walks in my door) they pay up front.

I'd say 75% of my customers are regular orders, and they are my bread and butter. I generally give them 30 days to pay, but still, haven't ever sent them a late fee. I take good care of them, and they don't shop around, or bicker on price.

To each his own. I've been burned a couple of times...but I had to consider the douchieness of the person that burned me too.

 

[anotherdog]

No one seems to want to address whether or not asking for a deposit or 100% up front affects gross sales.....

There is no doubt that such policies help your cash flow but I am not so sure it makes you more money at the end of the road.....

I can not imagine a client calling me to tell me he is going elsewhere because he does not not like my payment policy....They just leave without much fanfare.....

It's a delicate balance. We usually don't get a deposit on design/proofing, but require 100% on approval of the proof. This policy sometimes bites us when a customer runs off with the design or decides not to proceed, however 99% of the time getting to see the design before laying down the credit card works (for us).

I say (for us) because we do not negotiate price. We cannot and will not beat the best price they can find on the internet or bandit signs. THAT kind of customer inevitably ends in tears and we usually
smile as we send them to our competition.

the 1% who do cheat us usually earn enough bad karma that they won't gain anything (lightning bolt, smoking hole).

 

[tsgstl]

I honestly don't know how I would ever put a system other than 30 day on a lot of my customers. I do a lot of commercial real estate stuff. With those companies I deal with 12+ agents at each company. Once you set up payment this way all the agents start calling. Most of the time I get paid by 2 different companies dealing with that perticular property. Or other businesses I rarely see someone that could possibly pay. I am obviously talking about repeat customers but if you fall anywhere close to the "general sign shop" then I think you could lose a lot of business by not agreeing to terms. The good business to keep are the ones that it is convenient for them to pay. I have never had a problem getting paid eventually from larger organizations. If it starts to be a problem then I usually put the job off until the ones that pay are done. I will only work as hard at is worth.

Edit: I'm sure I'll get flamed for this. I turn down a lot of people that want to pay up front. If it's under $500 and some legitimate company offers to pay me up front then 99.99% of time they will have no problem paying there bill. If you look them in the eye and tell them "no I prefer to not take your money before the job is done" they like you that much more. My referrals outweigh any advertising I could ever buy.

 

[Pat Whatley]

About 75% of my work is 100% invoiced. I send invoices on the first billing day (meaning the day I sit my *** down and do the invoicing) after the order is placed whether it's completed or not. All invoices are sent DUE ON RECEIPT. I think my average wait for payment last year was right at two weeks....very few went 30 days. I think I had six total that went over 60 days.

Works for me but I only invoice established companies and typically only companies I've worked with before.

For one off sales or companies I've never heard of I get 50% before I do anything and the balance due on completion. I take credit cards....Visa will be happy to give them 30 day terms.

One thing I did stop doing was taking credit cards to pay invoices. I had several companies who would ride out an invoice for 30 days then call me to pay it over the phone with a rewards Visa card. The way my credit card processing fees worked I was paying 3.1% to process their rewards card over the phone. Screw that....I'm not paying a 3% penalty for letting them ride me for 30 days.

 

[binki]

Stepping back for a second here. When you let your customer determine terms you are a commodity. When you determine terms you are a premium product and price as such.

We work very hard not to be a commodity.

 

[visual800]

One thing this cannot be applied to is large contractors and or large bids. You will wait fior your money up to 6 months later in some cases. You cannot get any money down on large jobs. These pay great in the end if you can hold out.

We just won a bid for wall murals for $65k I wont see a dime of that money till 6 months from now but this offer doent come along often.