deposit on commercial jobs

[N844AA]

WHAT??? I have a big issue with that train of thought.

Why in the world should that even be considered a 'work around'? If you are an electrician....ALL your installs should be safe and not pose a hazard!!! Other than that...you are a hack.....and should get out of the trade.

Apparently you failed to understand that this is a gimmick, a ruse, an excuse to justify removing materials already installed that a customer has refused to pay for.

When people treat you in an unethical fashion, they relieve you of your obligation to treat them ethically.

 

[jmellc]

Talk about the 60 day leeway all you like. If you get stiffed, that 60 days will be here before you know it and you're still fighting for your money, while the deadbeat is still ducking your calls or claiming he didn't get your 3rd W9 you faxed, or that 1 light of 200 blinks a bit, or he doesn't understand your bill, etc, etc. A lawyer wants $ upfront and 30% or so of what he collects, if he collects. You have chance of a good project, but you're behind at the supply house and they are about to freeze your account. A guy willing to break thumbs is the only one who has a chance of getting paid now. Most of us aren't thugs like that.

I'm glad some of you haven't had troubles with it, but I bet you will sooner or later.

 

[hardworkingstiff]

I'm thinking I should start working like attorneys do. Give me a retainer and I'll let you know when I work it off and you can send another check.

 

[Mike Lang]

Again - thanks for the reply.

I just don't understand what the deposit covers. Does anyone have a hard time explaining tis to customers, or do just not quite get it?

You mentioned labor. Generally speaking payroll is a week behind. The work you do this week your boss pays you for next Friday. A residential job doesn't last more then a week, so let me desribe a likely senerio if I hired you to work for me personally.

You start on Monday work on the project till Thursday. Your boss ins't paying you for these hours worked until the following Friday. I give you a check on the Thurday when you are completed and it gets deposited on Friday. Your boss can sit on this moneyy for seven days untill he has to pay for the labor and 30 days untill he has to pay for the material.

I not trying to start an fight with anyone - just looking for some clarification.

Thanks

I guess the jobs you work on are much smaller than some others. My residential jobs last much longer than one week.

As far as what the deposit covers... it covers some labor and most importantly material. What if you have a ten jobs going at the same time with 5k in material each as well as labor and other expenses? This adds up quickly being an employee you probably don't realize this. I has nothing to do with the size of the company. I am a small company, but my family has owned and operated a union millwork company for over 50 years. They take deposits on every job or they dont start. I have the money to carry most jobs I just don't think it's my responsibility to be the bank. That would be the GC's risk since it's his only risk.

 

[satcom]

I guess the jobs you work on are much smaller than some others. My residential jobs last much longer than one week.

As far as what the deposit covers... it covers some labor and most importantly material. What if you have a ten jobs going at the same time with 5k in material each as well as labor and other expenses? This adds up quickly being an employee you probably don't realize this. I has nothing to do with the size of the company. I am a small company, but my family has owned and operated a union millwork company for over 50 years. They take deposits on every job or they dont start. I have the money to carry most jobs I just don't think it's my responsibility to be the bank. That would be the GC's risk since it's his only risk.

We are in the contracting business, not the banking business, I often wonder where the thinking of banking someones job comes from, if they had to fund an operating budget, and payroll, along with all the other inventments and expeneses a business has, they would change their mind fast.

 

[LarryFine]

I just don't understand what the deposit covers. Does anyone have a hard time explaining tis to customers, or do just not quite get it?

It covers the permit, starting materials, and any labor/time associated with them.

 

[shockin]

I guess the jobs you work on are much smaller than some others. My residential jobs last much longer than one week.

As far as what the deposit covers... it covers some labor and most importantly material. What if you have a ten jobs going at the same time with 5k in material each as well as labor and other expenses? This adds up quickly being an employee you probably don't realize this. I has nothing to do with the size of the company. I am a small company, but my family has owned and operated a union millwork company for over 50 years. They take deposits on every job or they dont start. I have the money to carry most jobs I just don't think it's my responsibility to be the bank. That would be the GC's risk since it's his only risk.

Two items to note.

1.) As to what the deposit covers - my question was asking what money has the contractor spent out of his pocket in order to perfrom the work? Again I was talking about about my personal homes that I have built, these are not huge projects so no sub is there more then a week at a time for their given task. If you work the week and I give you a ckeck on Friday, where does the "BANKING" aspect come into play in this senerio, which is what I had described previously. I contend that you don't have to pay for the materials up front, you have 30 days after the 25th of the month. In fact if you pay by the 10th you wll get a 2% cash discount. You don't pay for labor this week, it is generally a week behind, in other words the work you do this week is on next Fridays check. Permits might be applicable in some cases - but around here the City's send you a bill at the end on the month. So I'm not buying the reason for the deposit as being that you have expenses to cover in this senerio. If it's because you don't trust me then say that. Don't say it's because you have expenses to cover becuase I don't think that is really the case.

2.) As to the comment about me only being an employee - so therefore I couldn't possibly understand how things work: My position among other tasks, is to purchase the materials for the projects I manage. In a given year I purchase 1.5 - 2M dollars worth of materials. These are commercial projects, and I guarentee you that you would never get a deposit for a dollar of this materail and you won't see any money for it until 30 - 45 days after the end of the month. Commercial jobs, I would agree, you are acting as a bank.

I hope this post doesn't come across as shouting - that's not my intent.

 

[satcom]

Two items to note.

1.) As to what the deposit covers - my question was asking what money has the contractor spent out of his pocket in order to perfrom the work? Again I was talking about about my personal homes that I have built, these are not huge projects so no sub is there more then a week at a time for their given task. If you work the week and I give you a ckeck on Friday, where does the "BANKING" aspect come into play in this senerio, which is what I had described previously. I contend that you don't have to pay for the materials up front, you have 30 days after the 25th of the month. In fact if you pay by the 10th you wll get a 2% cash discount. You don't pay for labor this week, it is generally a week behind, in other words the work you do this week is on next Fridays check. Permits might be applicable in some cases - but around here the City's send you a bill at the end on the month. So I'm not buying the reason for the deposit as being that you have expenses to cover in this senerio. If it's because you don't trust me then say that. Don't say it's because you have expenses to cover becuase I don't think that is really the case.

2.) As to the comment about me only being an employee - so therefore I couldn't possibly understand how things work: My position among other tasks, is to purchase the materials for the projects I manage. In a given year I purchase 1.5 - 2M dollars worth of materials. These are commercial projects, and I guarentee you that you would never get a deposit for a dollar of this materail and you won't see any money for it until 30 - 45 days after the end of the month. Commercial jobs, I would agree, you are acting as a bank.

I hope this post doesn't come across as shouting - that's not my intent.

We do plenty of commercial work, everything from new construction to fit up projects, and have been doing so for many years, deposits on commercial work will depend on the accounts credit history and project burdened costs, all part of the estimating and planning process, some accounts with a good credit and payment history and jobs with a light burden, may not require a deposit.

 

[shockin]

We do plenty of commercial work, everything from new construction to fit up projects, and have been doing so for many years, deposits on commercial work will depend on the accounts credit history and project burdened costs, all part of the estimating and planning process, some accounts with a good credit and payment history and jobs with a light burden, may not require a deposit.

My hats of to you for getting a deposit commercial projects. That would be very impressive to pull off around here. We are stuck with the schedule of values we fill ouf in the AIA docs. Are you always able to dictate the deposits for commercial?

 

[rodneee]

this post has gone on for so long i think i may have forgotten or changed my original opinion. i think my opinion was i can't get up front money but i am happy for those that can....but for the life of me i can't figure out why a GC would give you up front money???? what would he gain other than worry and risk. how would the GC know if his check to me is not going towards paying off my outstanding bills from previous projects. what security does he have that i won't steal the money.....

 

[N844AA]

I get deposit money from a GC because it makes him commit to me and it also proves that he has a checking account. If you don't take a deposit, he will continue to shop your bid, even if he signed a contract.

 

[satcom]

this post has gone on for so long i think i may have forgotten or changed my original opinion. i think my opinion was i can't get up front money but i am happy for those that can....but for the life of me i can't figure out why a GC would give you up front money???? what would he gain other than worry and risk. how would the GC know if his check to me is not going towards paying off my outstanding bills from previous projects. what security does he have that i won't steal the money.....

"but for the life of me i can't figure out why a GC would give you up front money???? "

Because he already shafted most of EC's in the area and now found you who who requires a deposit and credit check and signed contract before you start a lick of work.

also when working with GC's not only should you get a down payment make sure you have your terms in the contract require progress payments on time. any good GC that wants a decent EC will pay the deposit and make his progress payments on time, but it is a two way street, you may have to work close with pricing, not give the work away but make cost plus a nice percent of profit.

We are insured and bonded and licensed, the GC is propected from us walking away.

 

[shockin]

I get deposit money from a GC because it makes him commit to me and it also proves that he has a checking account. If you don't take a deposit, he will continue to shop your bid, even if he signed a contract.

Now I'll buy that you get a deposit for the reasons stated above. But if this is the case, why does everyone always lead with "we have to pay for the materials" when they really dont have to.

Why can't you just look your future customer in the eye after they agree to hire you and say I appreciate that you trust our company enough to hire us and have us in your home unsupervised. We take a lot of pride in our reputation and we will do every thing we can prove that you made the right decsion by seleceting us for this project.

However I don't trust you so give me a deposit.

 

[shockin]

Because he already shafted most of EC's in the area and now found you who who requires a deposit and credit check and signed contract before you start a lick of work.

Why would you even waste your time in this first place bidding to a GC with a bad rep.? There are certain generals that we won't work for. On bid day, they don't get our price. It's not worth the headaches.

So assuming that you are dealing with a GC that you have been doing business with for 20 years, is a deposit still required?

 

[N844AA]

Now I'll buy that you get a deposit for the reasons stated above. But if this is the case, why does everyone always lead with "we have to pay for the materials" when they really dont have to.

Why can't you just look your future customer in the eye after they agree to hire you and say I appreciate that you trust our company enough to hire us and have us in your home unsupervised. We take a lot of pride in our reputation and we will do every thing we can prove that you made the right decsion by seleceting us for this project.

However I don't trust you so give me a deposit.

There you go with your emotions again. "I don't trust you" is an emotional phrase. This is business. Leave your feelings at the door. Never let your emotions interfere with business.

If it's the policy of a business to require a deposit, that's their policy, end of story. Why do you need to view it as an insult to your integrity?

It's business, get over it.

 

[Rewire99]

There you go with your emotions again. "I don't trust you" is an emotional phrase. This is business. Leave your feelings at the door. Never let your emotions interfere with business.

If it's the policy of a business to require a deposit, that's their policy, end of story. Why do you need to view it as an insult to your integrity?

It's business, get over it.

Well said !

 

[shockin]

If it's the policy of a business to require a deposit, that's their policy, end of story. Why do you need to view it as an insult to your integrity?

It's business, get over it.

Let me ask you the same question - If its the policy of a GC to NOT give depsoits, why do you view that GC as shady or the other list or terms that you accused me of being in an earlier post. Why do you get so personally offended. It's simply a business decision on his part.

You are asking him to put his trust in you that you will actually return to finish the project as you said you would and not just run off with his money.

 

[N844AA]

Let me ask you the same question - If its the policy of a GC to NOT give depsoits, why do you view that GC as shady or the other list or terms that you accused me of being in an earlier post. Why do you get so personally offended. It's simply a business decision on his part.

General Contractors are not businessmen. Neither are you. Please stop trolling this thread.

 

[shockin]

General Contractors are not businessmen. Neither are you. Please stop trolling this thread.

??? Here is the definition of a businessman.

A businessperson (also businessman or businesswoman) is someone who is employed at usually a profit-oriented enterprise, or more specifically, someone who is involved in the management (at any level) of a company, or even an entrepreneur. The term businessperson almost always refers to someone with a "white collar" occupation.

That describes me and it describes the GC's I work with. How is a GC not a busimessman?

 

[shockin]

General Contractors are not businessmen.

Bechtel Group (located in your home sate) has 9.3 Billion dollars worth of projects booked acting as a General Contractor. I'm pretty sure they are good businessman but they don't meet your definition becasue they are a GC?