How do you guarantee payment of services on small jobs?

[kwired]

From one of the sales guys we had:
"You haven't made the sale until you get paid. Until then, it's a gift."

Another way to look at it is it is a form of theft from the receiving party:happyyes:

 

[TruthIsTaboo]

Tell customer when he calls that the work will be COD. If he demands a price up front, look over the work and give a price, covering all contingencies you can think of. If he adds to the job, add to the price.

If you get a night call by a maintenance tech who does not have the checkbook, tell him to call someone who can give you a credit card # on the phone. "The office will send a check tomorrow" turns into "we don't have your paperwork, even though you faxed it to us 3 times". BEFORE the job is the only time you have any leverage.

Tell them ahead you will charge for a service call at the least if they decide not to do the work. Some will call you time after time for quotes and never have you do the job.

If you get regulars who are honest and don't try to stiff you, you could relax with them a bit and try 30 day billing, etc. if it seems warranted.

Too many businesses go broke later on, have 1 manager overrule another, go out of business, etc. Then you wind up taking the loss. Your work is hard enough; don't be stiffed out of your money.

This seems like the best route for my application, if they balk I walk seems like a good method too, trust is so difficult now a days!

 

[kwired]

This seems like the best route for my application, if they balk I walk seems like a good method too, trust is so difficult now a days!

But you trust us

 

[jim dungar]

It is very common that businesses must pay in advance. Liquor distributors and food suppliers hardly ever leave anything 'on credit'.

 

[GoldDigger]

It is very common that businesses must pay in advance. Liquor distributors and food suppliers hardly ever leave anything 'on credit'.

But for contracting work, especially residential, state laws often limit how much can legally be collected in advance of starting work and at various stages of completion.
The only solution which protects both the customer and the contractor may be a drawing account held by a third party. And those have serious problems of their own.

Small jobs are often exempt from those regulations, which leaves you back where this thread started.

 

[jim dungar]

Small jobs are often exempt from those regulations, which leaves you back where this thread started.

If the job is small enough that regulations do not apply, then you can usually do what you want, including making arrangements for some "up front" money.

If regulations apply, then you need to follow advice given by others under those same regulations.

 

[Fulthrotl]

This seems like the best route for my application, if they balk I walk seems like a good method too, trust is so difficult now a days!

i'm fortunate at this time, everyone i'm doing business with is a friend,
to the extent that we have enough of a relationship that nowhere am
i concerned about getting paid. every single one of them, i have keys
and alarm codes if necessary to their facilities, in the event of an
emergency. on customer appreciation day, i run a load of smoked
filet, and make a loop, and feed them.

the last customer i had reservations about payment, i'm not able
to serve them any more. i just don't have the time... and they
were the second largest of my accounts. they probably will do
$300k in electrical work in the next year and a half. and every
single check, you waited six weeks, and then had to ask about it.

every single freaking check. he never got on the smoker list.

they still owe me $2,500.00, and are at 45 days now on it.
i'll have to call them this week and see about it. now that i'm
not doing work for them, all bets are off. we'll see.

that being said, how do you handle this? simple. follow your
gut instinct. the head will try to talk you out of what the gut
is telling you.

in the last six years, i've had one invoice that didn't get paid.
for $50. it was a nationwide law firm.

but my instincts, tempered by experience, have given me some red flags,
and some stall horns in the cockpit.

here's my list of stall horns in the cockpit. while not necessarily non pays,
they are usually such time sucks they are unprofitable.

asian shopkeepers, with limited vocabulary.
real estate agents
attorneys
doctors
anything within a 2 mile radius of zip 92660. no bid zone.

 

[BSK3720]

Hard to Change

Hard to Change

I've been working in a small town for 20 years. I've allowed my customers to pay me whenever they get around to it. I'm trying to retrain them to pay upon completion, but it's tough. I wish I'd taken a firmer stance years ago. It's all about expectations. You wouldn't think of paying for your lunch 30 days after you've eaten it, but restaurant owners routinely pay 30 to 45 days late. One dentist I work for has a sign on the counter that reads "Payment Due Upon Completion of Services, No Credit". Then I wait a month for a check. smh

 

[kwired]

But for contracting work, especially residential, state laws often limit how much can legally be collected in advance of starting work and at various stages of completion.
The only solution which protects both the customer and the contractor may be a drawing account held by a third party. And those have serious problems of their own.

Small jobs are often exempt from those regulations, which leaves you back where this thread started.

Consumers in general have some attitude toward contractors and ripping people off, yet they are not the only industry/trade where people get ripped off. It happens in all industries/trades Contractors just happen to be one of few trades that come to your house/place of business to do what they do.

i'm fortunate at this time, everyone i'm doing business with is a friend,
to the extent that we have enough of a relationship that nowhere am
i concerned about getting paid. every single one of them, i have keys
and alarm codes if necessary to their facilities, in the event of an
emergency. on customer appreciation day, i run a load of smoked
filet, and make a loop, and feed them.

the last customer i had reservations about payment, i'm not able
to serve them any more. i just don't have the time... and they
were the second largest of my accounts. they probably will do
$300k in electrical work in the next year and a half. and every
single check, you waited six weeks, and then had to ask about it.

every single freaking check. he never got on the smoker list.

they still owe me $2,500.00, and are at 45 days now on it.
i'll have to call them this week and see about it. now that i'm
not doing work for them, all bets are off. we'll see.

that being said, how do you handle this? simple. follow your
gut instinct. the head will try to talk you out of what the gut
is telling you.

in the last six years, i've had one invoice that didn't get paid.
for $50. it was a nationwide law firm.

but my instincts, tempered by experience, have given me some red flags,
and some stall horns in the cockpit.

here's my list of stall horns in the cockpit. while not necessarily non pays,
they are usually such time sucks they are unprofitable.

asian shopkeepers, with limited vocabulary.
real estate agents
attorneys
doctors
anything within a 2 mile radius of zip 92660. no bid zone.

Wealthier people often have wealth for a reason. They don't part with their money. Holding onto every dime as long as possible means you have more that can be invested and earning you even more money. Pay the regular bills on time to keep in good standing with the "essentials" but put everyone else off as long as you can, seems to be somewhat common. They know that many times most people will not make too much collection effort until past 90 days due, and especially if no penalty is being charged they will milk that for all they can. In the meantime there are people out there that have a harder time affording things and you can do badly needed work for some of them and they maybe can't afford to pay you all at once, yet some will surprisingly be making regular payments and will see to it you do get fully paid. Larger corporations seem to be horrible. Often times the local branch where you did work for can not pay you - it has to come from headquarters. If it is your first time doing work for them they leave your bill sit for 30 or even 60 days, then ask you for empolyer ID or social security number - understandable but why wait 60 days before asking. Then they still wait at least 30 more days before cutting you a check because they only cut checks for such vendors on the umpteenth day of the month:roll:

As to your list of customer types-

Not much for Asian shopkeepers in my area - can't say much about them

real estate people and attorneys - I pretty much agree with

doctors - I haven't had too much trouble with

the zip code you mentioned - never worked there but zip code can sometimes be a factor here as well

A few more to add to the list - teachers, preachers, and cops. Most of them will pay their bills, but don't always make it simple.

 

[Fulthrotl]

the zip code you mentioned - never worked there but zip code can sometimes be a factor here as well

i discovered the no bid zone after looking at invoice 2 go, and it'll show invoices, and quotes for
that matter, on a map by gps coordinates.

i looked at the quotes, and their was a huge clump of them in newport beach and back bay,
and then i looked at invoices, and there weren't many of them, and i figured i'd spent about,
literally, a month of billable hours there, and had grossed about $1k off of it.

i still get calls about doing work there. i'll quote them over the phone, but i'm not driving over
there and getting pissed off at the time wasted. you never know when one of those people
will put your name somewhere worthwhile.

what i have learned, is that good customers usually refer good customers, so i'm not all that
optimistic about anything profitable coming out of the "no bid zone."

the teachers, and preachers, and churches, i would, upon reflection, mostly agree with.

 

[jmellc]

But you trust us

But we don't owe him money.

 

[mtfallsmikey]

The most effective and satisfying way.

I would be more inclind to call upon Luca Brasi to collect, but he's sleeping with the fishes...
Standard script for answering these calls would be payment by check/credit card/cash upon completion, or pay diagnostic in advance with credit card.