breakout of billing

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copper123

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How do you guys bill for a complete home wiring project. Payement after rough-in and then same after trim? Or do you set up billing cycles at certain precentage numbers of completion?

Thanks!
 
Re: breakout of billing

Anybody have a really bad horror story about getting bit from an owner? I never thought about so much down before you start. Sounds like a really good way to weed out the bad apples from the start. Well at least some of the ones!

Thanks!
 
Re: breakout of billing

Depending on circumstances of the job, I front loaded all the breakdowns, so that i was paid before final, and final was profit.

In CA can do 10% down, but i set up schedule for material purchase. if a small job, 70% on complete of rough inspection. still got bit a little bit. or it took forever.

One contractor that I worked with had a running bill with a GC. Sometimes it was pretty tardy, but then he was preferred contractor and he cried all the way to the bank. He was so good at crying about it he even believed it himself, but I could see the amount he was charging. Given the chance I would have stepped into his shoes and started crying too.

paul
 
Re: breakout of billing

We try for 70% on rough inspection, but alot of GC don't want to go that high, so we usually end up with 50% on rough and 50% on final.

I don't like the 50%, like right now we got a house that is in court, the GC vs Homeowner. We roughed it 9 months ago and are waiting to final it. We all know all the money is in the rough, so we got 20% sitting idol.

On big commercial jobs(500k+) we do take a start up draw, and then start sending draws in once a month, or depending on the GC as certain milestons are reached.

[ May 29, 2004, 11:07 PM: Message edited by: chrsb ]
 
Re: breakout of billing

Originally posted by copper123:
Anybody have a really bad horror story about getting bit from an owner? I never thought about so much down before you start. Sounds like a really good way to weed out the bad apples from the start. Well at least some of the ones!

Thanks!
2002- Lost over a million when K-mart went BK
2003- Lost 500k when GC "misappropiated funds"
2004- Lost 40k when bank decided to stop funding job so it went BK.
 
Re: breakout of billing

When I first went into business, it was 1/3, 1/3, 1/3. As my business grew and I got bit a couple of times I changed to 55% upon signing the contract, 35% due the day roughing of original contract is finished, and 10% upon completion of contract work. Not tied to inspections, or other contractors. Extras billed as extras and make sure you get a signature, no handshakes.
Some guys said it would not work that way. It worked for 5 years, even with corporate giants. I did lose some work,but I did not lose money after that and always had cash flow :)

Pierre
 
Re: breakout of billing

Some guys said it would not work that way. It worked for 5 years, even with corporate giants. I did lose some work,but I did not lose money after that and always had cash flow
The GC's that will not pay the 50 down and 35 at day of rough completion, usually do not intend to pay period.
When I first started, the GC,s told me that all the other subs wait for their money, and yes there is an Easter Bunny.
After 20 years I am still waiting for a number of GC's to pay their bill, and i sure hope Santa is real.
 
Re: breakout of billing

A lot of good suggestions so far but you'll have to implement some of these suggestions and try them out to find out what works for you. If you're dealing with a GC there are some things you should know :
A) GC's will not allow you to make money. Only they can make the money. They get "up-front" money from the homeowner and mysteriously develop arthritis when it comes to writing you a check.
B) Never hook up with a track builder. They do business as ABC Contracting and plan to build 100 condos and are usually 7 or 8 condos behind in your payments throughout the project. When they finish the last condo they close up shop and re-open as XYZ Contracting and you're out the $$$ for 7 or 8 condos

GC's usually don't like to pay any "up-front" money but you can negotiate up-front payments if you're dealing with a homeowner. The most important thing, no matter who you're dealing with, is a SIGNED CONTRACT . When there's big money involved, if you do things with only a handshake - that's exactly what you'll get in the end (no pun intended !). Make sure both you and whoever you're dealing with are comfortable with all the components of the contract. And that reminds me of the Kenny Rogers song that goes "You gotta know when to hold 'em, know when to fold 'em, know when to walk away and know when to run". If you don't feel right about the deal you're about to enter into - don't sign on the dotted line.

Anyway, getting off the soap box, when dealing with a homeowner I've found that the 1/3, 1/3, 1/3 formula works the best. In dealing with a GC I've found that 50% upon completion of rough-in and rough inspection, 25% upon completion of final work and 25% upon final inspection work the best. In either case, getting that last payment is the hardest part of the job. Good luck.

[ May 30, 2004, 08:39 AM: Message edited by: goldstar ]
 
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