customer won't pay

[jmellc]

1 former boss got burned on a job that was supposed to make us rich & famous. He eventually got paid, but in small bits & pieces. $25,000 to 30,000 or so. GC had paid our billings within 30 days on previous jobs. Both he & customer put us off in many ways, wanting this explained, that explained, what % of time on this end of this line, how much on that end, etc. It was as testing lab of sorts & we did lots of trial runs to see what the customer liked. Most projects were done 2-3 times over. I think customer hoped to get out of paying for 1st & 2nd runs. But they wouldn't tell us up front what they wanted, didn't know.

After that job, I've always wished an RC device was available, fairly cheap, that could be installed somewhere in the system. Customer stalls payment, ride by & click the RC. A room of lights goes out, a machine stops, etc. Customer calls, frantic, that we need to come out & fix their problem. We say, "have a check waiting for our balance due". Go out, pick up check, click RC again, everything's good again. Even after they've stiffed you, they don't mind calling when something goes wrong for them.

You never have any leverage except when something is down & they desperately need you. After work is done, the leverage is all theirs. In most areas, we can't go back & repossess what we installed. If we sold them a car, we could repossess it, same with furniture, etc.

Night jobs for new customers; I tell them COD for 1st job, we'll see afterward.

 

[kwired]

1 former boss got burned on a job that was supposed to make us rich & famous. He eventually got paid, but in small bits & pieces. $25,000 to 30,000 or so. GC had paid our billings within 30 days on previous jobs. Both he & customer put us off in many ways, wanting this explained, that explained, what % of time on this end of this line, how much on that end, etc. It was as testing lab of sorts & we did lots of trial runs to see what the customer liked. Most projects were done 2-3 times over. I think customer hoped to get out of paying for 1st & 2nd runs. But they wouldn't tell us up front what they wanted, didn't know.

After that job, I've always wished an RC device was available, fairly cheap, that could be installed somewhere in the system. Customer stalls payment, ride by & click the RC. A room of lights goes out, a machine stops, etc. Customer calls, frantic, that we need to come out & fix their problem. We say, "have a check waiting for our balance due". Go out, pick up check, click RC again, everything's good again. Even after they've stiffed you, they don't mind calling when something goes wrong for them.

You never have any leverage except when something is down & they desperately need you. After work is done, the leverage is all theirs. In most areas, we can't go back & repossess what we installed. If we sold them a car, we could repossess it, same with furniture, etc.

Night jobs for new customers; I tell them COD for 1st job, we'll see afterward.

Was all the trial runs a part of the original contract?

Did he get paid in a timely fashion for the original contract?

If it is not known what will be needed for the trial runs it would be easy to get in a situation like this. The contract needs to set limits for the trial runs or a way to compensate for them or require change orders each time something is changed.

Depending on what you are doing article 590 may become useful for trial runs. Trial runs are temporary until the right set up is found then install permanent wiring.

 

[readydave8]

As others have said the time to ensure prompt payment is before the job starts.

But just as a bed debt is a cost of doing business, so is the expense of attempting to collect a bad debt.

We'd all be better off if we all pursued bad debt collections, make it harder for them to get away with it and be less out there doing it.

And some debts will never be collected.

 

[goldstar]

One mistake that's very common is not demanding payment before you leave the job. I have a friend that does a bit of risky work in HVAC installations and he always lets his customer know that it's cash in hand when the job is finished or the unit goes back on the truck and no heat ( it seems to for work for him, cheap prices for promp cash payments ).

Most municipalities here in NJ issue a cardboard plackard that gets posted inside the front window so that if an inspector passes by he can tell whether a job was permited or not. On the back of that plackard in bold letters it clearly states "Do not pay contractor in full before the job gets inspected". I've noticed, over the years, that many people suddenly and mysteriously develop dyslexia and interpret that to mean "Don't pay contractor the final payment" or "If you don't call for inspection for 6 months you don't have to pay the contractor".

On a serious note though, many of us take on smaller, service type jobs for small money (usually under $1K) and without signed contracts. As others have posted in small claims court you will only get a judgement against your customer. The court will not act as a collection agency. If you hire a collection agency you will end up settling for cents on a dollar if you're lucky.

When you get into larger $$ (like $10K or better) make sure you have a signed contract and all your ducks are in a row. You may still end up in a similar situation but you'll end up with more leverage to the possibility of getting the $$ you're owed. If the company you are filing against files for bankruptcy then it doesn't matter how much you've planned for. The most you can hope to get is cents on a dollar if you're lucky.

Long and short of it - if you want to be paid in cash - open up a 7-11

 

[jmellc]

Was all the trial runs a part of the original contract?

Did he get paid in a timely fashion for the original contract?

If it is not known what will be needed for the trial runs it would be easy to get in a situation like this. The contract needs to set limits for the trial runs or a way to compensate for them or require change orders each time something is changed.

Depending on what you are doing article 590 may become useful for trial runs. Trial runs are temporary until the right set up is found then install permanent wiring.

It was a T & M job, we ran power circuits & powered up equipment they brought in. They had their local staff & also had a guy from 1 of their corp customers to come in & oversee different testing areas. He would say he needed this & that & such & such, but with no clear specs. We would set up near as we could & he'd shoot down some birds & approve others. Then it turned out that the corp customer had other major customers. Some work for 1, some for the other. Near the end, the customer & GC said they needed detailed billings per which project for which customer. We had to estimate most of that. That kind of accounting should be specified up front if it is to be done effectively. The GC also screwed up some other work & wasn't in a position to fight for us being paid when due. It was a screwed up mess all around. That job alone took the boss's spirit away for awhile, nearly did him in. After that, we started getting deposits for bigger jobs & didn't get burned again. Looking back, we should have either gotten deposits there or at least demanded payment for materials when received. If no check, we could have returned materials & walked away from the job. I think he did get paid on time for the 1st phase of the job, powering up eqpmt brought in from another location. But I don't think he had a written contract. Everything was word of mouth. Plus, he trusted GC because we'd done several jobs for him before & gotten paid right at 30 days after completion.

 

[satcom]

Most municipalities here in NJ issue a cardboard plackard that gets posted inside the front window so that if an inspector passes by he can tell whether a job was permited or not. On the back of that plackard in bold letters it clearly states "Do not pay contractor in full before the job gets inspected". I've noticed, over the years, that many people suddenly and mysteriously develop dyslexia and interpret that to mean "Don't pay contractor the final payment" or "If you don't call for inspection for 6 months you don't have to pay the contractor".

On a serious note though, many of us take on smaller, service type jobs for small money (usually under $1K) and without signed contracts. As others have posted in small claims court you will only get a judgement against your customer. The court will not act as a collection agency. If you hire a collection agency you will end up settling for cents on a dollar if you're lucky.

When you get into larger $$ (like $10K or better) make sure you have a signed contract and all your ducks are in a row. You may still end up in a similar situation but you'll end up with more leverage to the possibility of getting the $$ you're owed. If the company you are filing against files for bankruptcy then it doesn't matter how much you've planned for. The most you can hope to get is cents on a dollar if you're lucky.

Long and short of it - if you want to be paid in cash - open up a 7-11

The reason we were bonded was to allow up to get paid before the inspection, then they printed up the plackards, without realizing EC's are bonded and were allowed to get paid before inspection, the whole reason for the bonding, once the older guys that fought for the bonding to get paid, passed and were in the groung they changed the rules, the younger new guys just accepted the change with a fight.

as far as small jobs with out contracts, that is not a recommended was to operate, you give away any and all protection a contract provides.

 

[difowler44]

customer won't pay

Well, I'm not the only Electrician with this problem obviously.

Before the mortgage crisis I mainly worked for one builder. Now I am finding out how the other side lives I guess, working with one stranger to the next and trying figure out in advance if they will pay me after the job is complete. It does add a certain thrill to my daily routine.

 

[c2500]

Put a lien on them. You should be able to win that through magistrate's court (up to $5K in SC). You win a judgement. Give it time, and they have their credit messed up. Then, you file for a foreclosure on the judgement. They either pay up or have the house sold to the highest bidder, then you get paid.

Besides my day job, I am the President of a home owners asociation for a condo complex. We have people not pay their regime fee and we lien them. Then after a while, we seek a foreclosure on the lien. It is amazing how people with no money can suddenly pay, or hire an attorney, then pay us, because they are going to lose. (The exception is when the IRS has a tax lien).

You just have to be willing to fight for what is rightfully yours....and I am assuming the laws may work to your favor.

c2500

 

[tallgirl]

After that job, I've always wished an RC device was available, fairly cheap, that could be installed somewhere in the system.

I have such a device I was testing a new piece of software, started it up, and all my monitored circuits died. Apparently the software initialized the contactor state to "off" instead of just leaving it alone. Which it doesn't know how to do anyway. And so I need to fix that. Soon. Or I could sell it to you as is :grin:

The client who ripped me off has lost many times what he did me out of because he paid no attention at all to what he was being told. He had a few other vendors tell me they had the same kinds of problems -- being told something he insisted be done wasn't going to work, then having to pay many times the original cost for someone to go behind them and do it the way he was told it needed to be done the first time around.

 

[ptonsparky]

I've been tempted to put a timer in my PLC programs to ensure payment because eventually they will need to call. Didn't know if that would cause more legal problems than what it was worth.

 

[Benton]

I agree, if you are doing a job for lets say $4000 or whatever, tell the customer that you need $2000 up front. That way there obligation is the same as yours. if the work is extensive and needed they should be willing and understand, if not RED FLAG!

 

[kwired]

I've been tempted to put a timer in my PLC programs to ensure payment because eventually they will need to call. Didn't know if that would cause more legal problems than what it was worth.

Sounds like a good idea to me. If you haven't been paid yet you will be happy to come do warranty work after the warranty has been paid. You will show up and find the problem within minutes and fix it. And you will look like a good trouble shooter too

Maybe you could even program it to ask for a credit card number to get your payment and have it fixed without even showing up on site.

I think I read on this forum a few years ago someone mentioned they knew a mason who when laying fireplace flues would lay a pane of glass in one of courses to block off the flue. If he did not get all of his pay he left it in there. They eventually would call to complain that the flue had a problem and he told them if they paid him what was still owed he would gladly come take a look and fix the problem.

 

[wireguru]

Just explain to the deadbeat customer how you really need the money because you're still paying off the medical bills of the last customer who didnt pay you..... :grin:

 

[ptonsparky]

Sounds like a good idea to me. If you haven't been paid yet you will be happy to come do warranty work after the warranty has been paid. You will show up and find the problem within minutes and fix it. And you will look like a good trouble shooter too

Maybe you could even program it to ask for a credit card number to get your payment and have it fixed without even showing up on site.

I think I read on this forum a few years ago someone mentioned they knew a mason who when laying fireplace flues would lay a pane of glass in one of courses to block off the flue. If he did not get all of his pay he left it in there. They eventually would call to complain that the flue had a problem and he told them if they paid him what was still owed he would gladly come take a look and fix the problem.

Having it ask for a credit card # and fixing without showing up on site is not as far fetched as you would think.

 

[kwired]

Having it ask for a credit card # and fixing without showing up on site is not as far fetched as you would think.

I figured it was very possible when I posted that.

 

[kwired]

If they owe you $$$ again down the road you could always program it to shut down again from a remote location.

 

[kbsparky]

My uncle has a business where they provided proprietary software. He had the program set for a limited time (a year I think it was), since it was basically only a license for use, etc.

If the customer ignored renewal notices, then the program would shut down after that amount of time. Then the client would call for tech support. Once they got their CC number and payment for another year, they would give the customer a new unlock code which would enable the program for another year.

Same thing, but all the burden was placed on the customer's end....

 

[jmellc]

I have such a device I was testing a new piece of software, started it up, and all my monitored circuits died. Apparently the software initialized the contactor state to "off" instead of just leaving it alone. Which it doesn't know how to do anyway. And so I need to fix that. Soon. Or I could sell it to you as is :grin:

The client who ripped me off has lost many times what he did me out of because he paid no attention at all to what he was being told. He had a few other vendors tell me they had the same kinds of problems -- being told something he insisted be done wasn't going to work, then having to pay many times the original cost for someone to go behind them and do it the way he was told it needed to be done the first time around.

I'd want something I could do by RC, not something that would act on its own. Too much chance of an accidental discharge, seems to me. I thought some kind of RC relay, hidden in a j box among others in a run of conduit. Not up in ceiling but somewhere easily reached from a ladder. Use tamper proof screws on the cover. Riding by & clicking from the street would kill a room full of lights. That would be quickly noticed & called in.