60 & 90 Day Deadbeats

[jmellc]

I haven't seen this discussed in awhile or I've missed it if it has. I'm sure some of you have customers who drag payments out to 60 or 90 days. How do you deal with them? Do you keep going out when they call? Do you put better paying customers ahead of them on the priority list? Do you sometimes refuse service if they are too far behind? Just wondering. I hear various people out & around telling abut their employers being cut off by suppliers, etc.

 

[ramsy]

customers who drag payments out to 60 or 90 days

5% NET 30, 60 or 90 was common w/ other contractor clients, home warranty, facility services, or property managers.

After losing hours in bill collecting phone calls beyond 60 or 90 days, it usually resulted in getting a CCard - 4% fees by phone. It became apparent only a glut of desperate unlicensed contractors forgo lean rights for 5% NET 30+ clients, who are always shopping for price, and unreliable.

The 5% beyond due date was usually requested in demand letters, followed by service of process for small claims. When they try to settle for peanuts, I took the dead beats to court. They were always no shows. The more good repeat clients you get, the more deadbeats you can dump.

 

[mtnelect]

5% NET 30, 60 or 90 was common w/ other contractor clients, home warranty, facility services, or property managers.

After losing hours in bill collecting phone calls beyond 60 or 90 days, it usually resulted in getting a CCard - 4% fees by phone. It became apparent only a glut of desperate unlicensed contractors forgo lean rights for 5% NET 30+ clients, who are always shopping for price, and unreliable.

The 5% beyond due date was usually requested in demand letters, followed by service of process for small claims. When they try to settle for peanuts, I took the dead beats to court. They were always no shows. The more good repeat clients you get, the more deadbeats you can dump.

I always get calls every month from General Contractors (License & Un-Licensed) that need fresh "Blood".

 

[mtnelect]

Contracting is a "Treacherous" industry. Not recommended for the faint of heart !

 

[AC\DC]

I put deadbeets on my phone as very bad word. If I see that then I just avoid.

 

[Fred B]

Had one of those "maintenance" companies almost a year out on 3 invoices. When they called again for another job said to them I hadn't been paid for the last 3 yet, and wouldn't do anything until I got paid. They were desperate to get someone and sent me the payment right out. Went to do the repair when I got the payment into the bank. Of course I doubled my rate to them, to cover the "normal" for them long wait excess of 90 days. They still call just not as often with my higher rate.

 

[kwired]

Had one of those "maintenance" companies almost a year out on 3 invoices. When they called again for another job said to them I hadn't been paid for the last 3 yet, and wouldn't do anything until I got paid. They were desperate to get someone and sent me the payment right out. Went to do the repair when I got the payment into the bank. Of course I doubled my rate to them, to cover the "normal" for them long wait excess of 90 days. They still call just not as often with my higher rate.

You are the only one that will come out of all they have tried?

 

[letgomywago]

You need a written contract with these individuals with late fees. If they say 90 days then price for it. If they take longer then they get a late fee. I did a small service call that was 200 bucks and the management company took 4 months to get to me. The late fees cost them another 200 bucks too

 

[electrofelon]

It seems pretty simple just charge a high interest rate and/or fees for being late. Put it on your invoice in big letters.

 

[Eddie702]

When I was in business I had 3 really good customers who gave me a lot of work but were slow pay. I usually didn't have to bug them for money the money came but is was slow always 60 or 90 days. You just adjust your prices accordingly. Took a few to small claims and won them all.

The one I got stuck on was one of the biggest GCs in Boston called me and begged me to get a boiler wired up. They were supposed to demo 1 old boiler and keep 1 old boiler running but the electrician on the job cut all the wires and the power to the boiler they were supposed to keep running and they had no heat. And they pulled the burner off the boiler and let it smash on the floor. So we went there and charged them 2k to get it back together (this was 40 years ago). The electrician was pissed because he was going to get back charged. He wanted me to stand there and tell him how to wire it for free. This was an old burner, and no print was available, and he cut about 40 conductors and we had to figure it all out. So the GC gave me a PO. A month later he wanted something else done and they hadn't paid the first bill so I said Id like to help you out but I can't till I get paid. So we got paid. Did some more work we got paid did some more work we got paid. Did some more work and they stuck me for the last bill never got paid for that one.

They just strung me out till the end and cut me off LOL

 

[jmellc]

When I was in business I had 3 really good customers who gave me a lot of work but were slow pay. I usually didn't have to bug them for money the money came but is was slow always 60 or 90 days. You just adjust your prices accordingly. Took a few to small claims and won them all.

The one I got stuck on was one of the biggest GCs in Boston called me and begged me to get a boiler wired up. They were supposed to demo 1 old boiler and keep 1 old boiler running but the electrician on the job cut all the wires and the power to the boiler they were supposed to keep running and they had no heat. And they pulled the burner off the boiler and let it smash on the floor. So we went there and charged them 2k to get it back together (this was 40 years ago). The electrician was pissed because he was going to get back charged. He wanted me to stand there and tell him how to wire it for free. This was an old burner, and no print was available, and he cut about 40 conductors and we had to figure it all out. So the GC gave me a PO. A month later he wanted something else done and they hadn't paid the first bill so I said Id like to help you out but I can't till I get paid. So we got paid. Did some more work we got paid did some more work we got paid. Did some more work and they stuck me for the last bill never got paid for that one.

They just strung me out till the end and cut me off LOL

Damn shame, the crooks that are out there.

 

[PaulMmn]

Unfortunately, many large corporations will dump all invoices into their "Payment Cycle." 1. approve the vendor 2. approve the charge 3. add the invoice to the current cycle (oops! Just missed the check print cycle-- wait 2 weeks!) 4. cut the check 5. Mail the check.

 

[ptonsparky]

Unfortunately, many large corporations will dump all invoices into their "Payment Cycle." 1. approve the vendor 2. approve the charge 3. add the invoice to the current cycle (oops! Just missed the check print cycle-- wait 2 weeks!) 4. cut the check 5. Mail the check.

Expect it. Charge up front for it then go on with life or drop them as customer.

 

[petersonra]

Expect it. Charge up front for it then go on with life or drop them as customer.

I don't know why people gripe about this common practice so much. Add 1% upfront and be done with it, or find other customers. Or add 2% upfront and offer them 2% ten.

 

[jmellc]

Unfortunately, many large corporations will dump all invoices into their "Payment Cycle." 1. approve the vendor 2. approve the charge 3. add the invoice to the current cycle (oops! Just missed the check print cycle-- wait 2 weeks!) 4. cut the check 5. Mail the check.

Don't forget the invoice getting lost after step 3. Then it starts all over again.

 

[Fred B]

Don't forget the invoice getting lost after step 3. Then it starts all over again.

And again at step five "It's on the mail". Delay up to another six week because it got lost somewhere and rerouted halfway across the country, or just the wrong box to someone on vacation.

 

[jmellc]

And again at step five "It's on the mail". Delay up to another six week because it got lost somewhere and rerouted halfway across the country, or just the wrong box to someone on vacation.

Reminds me of a recent experience with FedEx. They delivered 2 packages to us. 1 was ours, the other wasn't. I could read through the FedEx label and see where it should go. I called & the phone rep was clueless. Babbled on that they couldn't do anything........ . I said "never mind, I'll take it to the local store". Guy at the counter understood & wasn't surprised the phone rep was clueless. Said he'd get it on the right track. I called the recipient to tell them it had gotten sidetracked but they should have it shortly. They called me a week later that they still didn't have it. I guess the counter guy was the only one with a clue. Has to be frustrating. He will become a zombie too if he stays much longer. If you can't beat 'em, you have to join 'em.

 

[zbang]

Whatever happened to "2-10 net 30" (take a 2% discount if paid within 10 days, otherwise net 30 days)? At one time, that was fairly common on invoices. I usually put a "due in 30 days, 1.5%/month interest after that" on invoices, then crank out monthly bills showing the interest.

 

[Jpflex]

Had one of those "maintenance" companies almost a year out on 3 invoices. When they called again for another job said to them I hadn't been paid for the last 3 yet, and wouldn't do anything until I got paid. They were desperate to get someone and sent me the payment right out. Went to do the repair when I got the payment into the bank. Of course I doubled my rate to them, to cover the "normal" for them long wait excess of 90 days. They still call just not as often with my higher rate.

Reminds me of my days as a mechanic when employers wouldn’t pay their employees and would lie that they didn’t have the money but at the same time went on vacation. After threatening to sue, the check came immediately

 

[ptonsparky]

Reminds me of my days as a mechanic when employers wouldn’t pay their employees and would lie that they didn’t have the money but at the same time went on vacation. After threatening to sue, the check came immediately

The only person that ever went unpaid on payday was me.