How long to get paid?

[jsmalone1]

I am fairly new to running my own business but experienced in the trade. I finished a fairly large job, for me anyway, for a customer I have known for several years. He is a large commercial property owner and in very good financial condition. With all that being said, I am 70 days out getting paid. I billed him on Aug. 13th--I called him on Oct. 1st to see if everything was OK, was my invoice OK--he said all was fine--got lost in the shuffle and he would have a check sent out the following week--so that would have been Oct. 4th --9th--nothing yet. They live pretty large and his father-in-law, who started the business, has opened a second education facility to train young people in business. I am really wondering what's going on, what do I do next? I am fully aware that if this customer typically pays in 60 days I would accept that and be prepared for that. THOUGHTS??

 

[growler]

THOUGHTS??

When does you contract call for getting paid? The time to think about payment is before you start the job and not after it's finished.

If it's a local business then I'm going to set up a schedule of payment during the job and final upon completion with very little time for payment. I don't like to leave a lot for the final payment anyway.

It really gets back to whatever was stated in the contract. How much time did you allow for the final payment?

 

[growler]

They live pretty large and his father-in-law, who started the business, has opened a second education facility to train young people in business.

Well you are getting your first lesson.

Sorry I just had to say that.

 

[jsmalone1]

When does you contract call for getting paid? The time to think about payment is before you start the job and not after it's finished.

If it's a local business then I'm going to set up a schedule of payment during the job and final upon completion with very little time for payment. I don't like to leave a lot for the final payment anyway.

It really gets back to whatever was stated in the contract. How much time did you allow for the final payment?

Well shame on me--but it was a T&M job, no contract--not enough to break me but that's no excuse to not get paid in a timely fashion. He is a very close acquaintance so that may muddy the water but I don't want to lose this customer either but I'm getting close saying something that will harm the relationship. Based on my experience managing large projects, 90 days out is a problem and break point of sorts. I'm at 70 days now

 

[K8MHZ]

Well shame on me--but it was a T&M job, no contract--not enough to break me but that's no excuse to not get paid in a timely fashion. He is a very close acquaintance so that may muddy the water but I don't want to lose this customer either but I'm getting close saying something that will harm the relationship. Based on my experience managing large projects, 90 days out is a problem and break point of sorts. I'm at 70 days now

Show up at the class you mentioned and ask your question about payment to the teacher. In front of the class.

Something smells fishy....someone who teaches business engaging in no-contract work? What text is that covered in?

 

[jsmalone1]

Show up at the class you mentioned and ask your question about payment to the teacher. In front of the class.

Something smells fishy....someone who teaches business engaging in no-contract work? What text is that covered in?

The father-in-law does a large amount of charity and endowment in the area. His son-in-law (my contact & acquaintance ) essentially runs the business. That's the background---at what point in time do I move to a different mode? and what would I do next?

 

[growler]

He is a very close acquaintance so that may muddy the water but I don't want to lose this customer either but I'm getting close saying something that will harm the relationship.

If you know the guy then why not call him up and ask about the money.

Did you list a payment due date on the invoice?

It's really not a good idea to let people decide when and if they are going to pay you. An invoice is really a demand for payment for services and can contain a list of nasty legal options if payment is not made.


You don't ask customers if your invoice is good because you had better know that it's good when you send it. There is certian information that it should contain. Your business name, address, phone and even state number if required by law in your state. If you are not a corporation then you may need to send a Form W-9 with additional tax information. You should state very clearly what the invoice is for, the amount to be paid and the Date Due.

If you don't give them a set date where you require payment then they are never late. A payment date must be established.

Unless you want to work for free treat family and friends just like any other customer and start with a written and signed contract for services.

 

[jsmalone1]

If you know the guy then why not call him up and ask about the money.

Did you list a payment due date on the invoice?

It's really not a good idea to let people decide when and if they are going to pay you. An invoice is really a demand for payment for services and can contain a list of nasty legal options if payment is not made.


You don't ask customers if your invoice is good because you had better know that it's good when you send it. There is certian information that it should contain. Your business name, address, phone and even state number if required by law in your state. If you are not a corporation then you may need to send a Form W-9 with additional tax information. You should state very clearly what the invoice is for, the amount to be paid and the Date Due.

If you don't give them a set date where you require payment then they are never late. A payment date must be established.

Unless you want to work for free treat family and friends just like any other customer and start with a written and signed contract for services.

thank you--all very good advice for a novice at this.

 

[muskrat]

And mark on your bill the consequenses of late payment, i.e.5% after 30 days and stick to your guns. The "friend" relationship ended when you started work...and may end completely when he doesn't pay you.

 

[cowboyjwc]

thank you--all very good advice for a novice at this.

He told you it got lost in the shuffle, and being a friend I would take that as an answer, but my question would be did it get put back in the original pile after they found it?

I lost a very big contract and a friend over money. You can talk to me any way you think you can get away with and you can treat me like a dog, but never mess with my money.

P.S. I find that if you're working for someone who is living large, especially in this economy, he's probably doing it on your money.

 

[Cavie]

Show up at the class you mentioned and ask your question about payment to the teacher. In front of the class.

Something smells fishy....someone who teaches business engaging in no-contract work? What text is that covered in?

I was in business for ten years and never signed a contract. Got stiffed once, went to small claims court and got my money. It's not as uncommon as you think.

 

[jsmalone1]

I was in business for ten years and never signed a contract. Got stiffed once, went to small claims court and got my money. It's not as uncommon as you think.

I've been doing this for only 4 years and I too have never been stiffed. But I hate "never" and "always"--I know this is part of running a business and I find it so interesting that the customers I actually worried about paid with no issue--the one I had no preconceived concerns with is becoming an issue. But that's the story of life. Is 90 days a break point as far as payment/collection??

 

[K8MHZ]

I was in business for ten years and never signed a contract. Got stiffed once, went to small claims court and got my money. It's not as uncommon as you think.

I understand that, but being in business and teaching business are two different things.

I think Cowboy hit the nail on the head, here:

P.S. I find that if you're working for someone who is living large, especially in this economy, he's probably doing it on your money.

 

[mtfallsmikey]

And mark on your bill the consequenses of late payment, i.e.5% after 30 days and stick to your guns. The "friend" relationship ended when you started work...and may end completely when he doesn't pay you.

All invoices you send out should state the payment terms, with interest/penalties shown, make the customer sign the invoice upon completion, acknowloging that they accept your terms, that will be virtually airtight if it goes to court...

He told you it got lost in the shuffle, and being a friend I would take that as an answer, but my question would be did it get put back in the original pile after they found it?

I lost a very big contract and a friend over money. You can talk to me any way you think you can get away with and you can treat me like a dog, but never mess with my money.

P.S. I find that if you're working for someone who is living large, especially in this economy, he's probably doing it on your money.

Amen, brother!

 

[growler]

I finished a fairly large job.

Is 90 days a break point as far as payment/collection??

If they want to they can really screw you. Even if you take it to court they can wait around until it's almost time for the court date and then offer to pay if you drop the case and by then you will be so glad just to get your money that you will jump at the chance to collect. ( this happened to a company that I worked for back in the 80s).

If I were you I would call the owner and ask if there is a reason for the delay. At this time it's important to get a confirmed date for payment to be made. If they go past this confirmed date then you need to worry because there is a real problem.

The thing to do for the present is get some sort of communication going between you and this customer. Keep it very professional and don't let emotions get involved. I even tell customers that I need my money for operating expenses and most business people understand this.

I try to be nice and understanding as long as possible and then if that fails I'm a pit bull having a bad hair day. By then I'm not interested in anything other than getting paid.

 

[jsmalone1]

If they want to they can really screw you. Even if you take it to court they can wait around until it's almost time for the court date and then offer to pay if you drop the case and by then you will be so glad just to get your money that you will jump at the chance to collect. ( this happened to a company that I worked for back in the 80s).

If I were you I would call the owner and ask if there is a reason for the delay. At this time it's important to get a confirmed date for payment to be made. If they go past this confirmed date then you need to worry because there is a real problem.

The thing to do for the present is get some sort of communication going between you and this customer. Keep it very professional and don't let emotions get involved. I even tell customers that I need my money for operating expenses and most business people understand this.

I try to be nice and understanding as long as possible and then if that fails I'm a pit bull having a bad hair day. By then I'm not interested in anything other than getting paid.

Great advice--I really appreciate everyone's input--I'm hand delivering a copy of my invoice and other documentation tomorrow--we'll see

 

[480sparky]

Whatever you do, no matter what action you take to get paid (add interest, threaten or start legal proceedings, etc.), make sure what you do IS LEGAL.

You may think that you're going to get his attention by telling him you're going to start charging 30% interest, but if it's illegal in your state to charge that much, you may end up screwing yourself out of everything you're owed.

70 days after invoice MAY be too late for a mechanic's lien.

You may sue in small claims for $10,000 and end up with only $2,500 because that's the statutory limit in your state. Once you're awarded that, it's over.

Tread carefully. If it's a 5-digit amount, spend a c-note at a lawyers office for a hour consultation. Consider it tuition in the School of Hard Knocks.


The next problem is what to do the next time he needs work done. If he hasn't paid you for the last job, are you going to consider doing more work for him? Or will you demand payment in full for the last job, and a prepayment for the next one?

 

[nhfire77]

Tell him you NEED to get paid, so you can pay your tuition for his dad's class on how to collect.

 

[wirenuter]

Learn from your mistakes. Always have a contract. If you dont, dont get nasty, talk it over but be firm and stand your ground, dont threaten. If they have no issue with the job you did, then they are having a financial issue regardless of what you think or see, and they will not admit it. Try and talk them into some payment and more to follow it it comes to that.
LEARN FROM YOUR MISTAKES

 

[readydave8]

All very good advice. It goes without saying to stay calm, businesslike, but firm.