Reminded me of................................

[Gino]

There's another thread going on right now about sending out invoices and such. Someone mentioned, what I thought was a little high, an outstanding receivables amount. So, I decided to start one on this view of things.


I don't care how others run their business or want to play banker to be nice, but how can you carry other businesses so long ??

We have very little tolerance for people not paying on time. Regardless of how they get the invoice be it, snail mail, e-mail or carrier pigeon, we expect payment within out terms. Most of our customers are either cash on the barrel head or not more than 10 days. Sure, we have some with 30 day terms, but believe me, they are paying for that privilege. Our bigger customers all pay within 10 days or less. We just billed out a very healthy customer on Tuesday, actually for Wednesday payables and the check was cut yesterday and we can pick it up at the end of the day today or wait for the mail to send it. Their corporate headquarters happens to be very near us, so I drive 6 miles, pick up the check and deposit it on my way back to the shop. That one is high and I can't imagine carrying it for 30 days.

We had one recently where we did a job for a company out of Philly back in the middle of March. The 16th, to be exact, was the billing date. They got a call from our office on the 17th of April and no response. I took the reins and they told me it was sent out on the 22nd. Good, but do you understand, we spent the time and effort calling you for $875.00 without any response, then I hadda take time to write you and then we had several e-mails back & forth..... ?? I'm not into wasting time getting money owed me. Either you do it the way we agreed.... or we don't do it. Besides, when the check finally came in, it was postmarked 27th. They lied. He e-mailed me yesterday to confirm if it came in or not. He also said, he wants to figure out how we can paid on time. I haven't responded yet, but I have one method that will work. Pay in advance from now on.

So, how do you handle people who get lazy or wanna sidestep you, until the very last minute ??

• Are you rough with them ??
• Are you forgiving ??
• Do you listen to their excuses ??
• Do you accept, just so you get paid ??

Or... are you firm ??

I'm not talking about deadbeats. We don't have any of them, mostly because no one gets into us to begin with. Only on little jobs do we take occasional chances.... or well established customers.​

 

[letterman7]

It's rare that someone or company goes past my set limit. If it's an established customer I'll let it slide for a little while, if they have a 'good excuse'. Otherwise it's a phone call the day it's due once the mail has come and no check is in it to find out what's up. I give them 5 working days to get the invoice paid up, then I go to the office personally. So far... nobody has failed to pay within a reasonable time frame.

 

[Bretbyron]

Right?!?! We have one person that owes us $1,300 for two weeks and my wife is ready to go ape shyt. We are about ready to not accept personal checks and no pick-up w/o payment in full or onsite.

 

[reQ]

Most of work i do gets paid when picked up/delivered. Also have many customers (larger companies) who do their cheque runs on a specific date every month so i have to wait a bit, but never have problems getting paid within 30 day period. But of course i have people who i trusted and never required full payment before their order was completed but i only have couple like that so far and its my own mistake. I am always like "yeah, gonna help this person out, he is just starting his business and i remember how tough it is".... and then you are into demanding the payment for looooooooong period of time. I actually have only one like that right now, did the job and the invoice was $3300.00 and that was 2 months ago. Only received $1500 and was promised the balance next week, so will see if that happens.

Point is, that now i understand, that 99% of the time if you don't get paid for your work, its your own fault since you allowed that to happen (maybe i am wrong?)

 

[CanuckSigns]

I would guess the 75% of our clients have net 30 terms with us, it's just the way we have always operated. in order to do business with larger companies you have to accept their payment terms, if you don't someone else will.

Having said that, I can count on 1 hand the number of times we have been screwed on an invoice in 20 years, yes some places like to pay slowly, but they always pay.

now if someone comes in off the street, they always either pay when they place the order or when the order is picked up/installed, no exceptions.

If I tried to tell a large client like say Boeing that they had to pay me when the order is delivered, they would tell me to pound sand, they have a process in place for accounts payable, and they sure as heck aren't gonna change their process for me!

 

[Gino]

Don't get me wrong, I'm not condemning anyone for carrying customers or taking excuses, I just don't understand it anymore. Again, we have some 30 day accounts and we have some who are immediate. We have people who will struggle and if they come to us, explain it before it becomes overdue, we will work with them.

For the most part, though...... when you go and get your vehicle inspected or brakes fixed or whatever, they kinda expect payment before you leave or promise that you'll drop a check off tomorrow.
Can't go to the doctor's office without at least paying the Co-Pay, huh ?? Grocery stores, restaurants, shoe store, lawn care guy, septic tank cleaner, the bar, cash a check in someone else's bank or just about anything.... custom made or regular retail. Other than suppliers who take 30 day terms, why should we be any different ??

Doesn't the big shot at your big companies pay for these things like you and me ?? They know how it works, but if you guys give in and finance a multi-million dollar company for 30 days or 60 days, when it's their project.... why are you using your own money to finance them ??


I'm leaving in a few minutes to meet with a representative from probably one of the wealthiest people in Pennsylvania for some projects. A few weeks or months ago, I wrote here, about a customer who demanded I meet their terms and I told them to go pound sand, I can't finance such a huge company. Well, they've since met my terms on several occasions and now pay in advance or bring a check when picking up the goods. The one today should bring in a nice amount, but I won't know til I get there, so I'll be back later to see how this thread is going.

Thanks for the responses. I think this is an interesting topic.

 

[Techman]

There are plenty of ways to get paid. Square, Paypal, checks, cards, cash. The electronic methods are easy to track an secure. Why would any one want to carry any one other than a couple of specific companies for more than Pay on delivery? Accounting is instant now. Computer systems track everything. The old days of the accounting office having to handle a load of paperwork are long gone.

 

[GaSouthpaw]

One of my previous employers had more than one customer who owed them somewhere north of $20,000- and they kept doing work for them. I asked the owner why he "let them slide" and his (to me, idiotic) response was "I don't want to lose the business."
Wait, what? You don't want to lose a customer who has owed you $8,000 for 120+ days and more than $15,000 for 45 days? Yeah- that's a great customer. And the salesperson kept bidding large jobs for them, and they kept taking them. Glad I got out.

I was always very specific with my customers about the shop's payment policy- 50% down, 50% upon completion. In one instance, had to refuse to hand over keys to a vehicle until the customer used his personal credit card to pay the balance.
Sure, there are some good, very established- customers you give terms to, but 30 days max. And, with some larger volume customers, if you offer a 5%/10 net 30, they'll have a check to you on day nine- pretty much without fail.

 

[Jackpine]

Anything under $200....paid before work starts. Good customers 100% on completion. 50% down, 50% upon completion.

 

[Speedsterbeast]

Perhaps payment terms depend upon region or even sector. For example, I do a fair amount with construction companies. I never expect to get paid before 60 days. Some of my clients even wait until 90 days to pay as it's their payables policy. I always get paid, so I just make sure the pricing reflects the terms. If I have to play bank, then I'll make sure my profit reflects this.
In business for three years without one unpaid invoice. Almost had one. Told them I was going to remove the truck graphics I did for them...with an angle grinder.