Getting Paid (Small)

Status
Not open for further replies.

hillbilly1

Senior Member
Location
North Georgia mountains
Occupation
Owner/electrical contractor
That's a very competitive- reasonable rate in California, after similar scenarios I always either get a text dialog or email just for that reason plus I literally note very visibly my rates on my webpage to eliminate any misunderstandings 150.00 1st / 80.00 thereafter.

As far as the rare deadbeat client, I'll send them a polite email mentioning the rates and conditions , "hoping they acknowledge"
with a sincere mention of something like

" Hello ... Our records indicate no payment had been received for the services provided, to eliminate any further collections action please send payment today. Thank you. Sincerely ....Ben F
My billing software automatically sends out reminders, I have one customer that I do a lot of business with, but his cash flow is irregular, so he sometimes goes 30+. I know I will eventually get paid, but the software pokes him in the ribs! LOL!
 

Greg1707

Senior Member
Location
Alexandria, VA
Occupation
Business owner Electrical contractor
Hey Guys,
I just sent a tech to a job out of town, very simple attic fan replacement. Usually I send an estimate and have that approved prior to performing work but got very busy and never sent this one prior to the tech showing up. It was a 1 hr. job and my policy is a service charge ($165) covers up to the first hour of labor. Customer had all the materials there. Simple, but now the customer wont pay my service fee. Anybody got a good way to handle these situations? It's my own fault for not getting paper trail approval for my pricing in advance but the bill isn't that much. My service charge is reasonable. Let me know what you guys think, thanks.
What are they willing to pay? It cannot be zero.
 

Another C10

Electrical Contractor 1987 - present
Location
Southern Cal
Occupation
Electrician NEC 2020
My billing software automatically sends out reminders, I have one customer that I do a lot of business with, but his cash flow is irregular, so he sometimes goes 30+. I know I will eventually get paid, but the software pokes him in the ribs! LOL!
I had one business client, property management firm, that ended up having a 120 day billing period ... never again, I make sure now to know the companies payment policies before investing within them.
 

Another C10

Electrical Contractor 1987 - present
Location
Southern Cal
Occupation
Electrician NEC 2020
I thought your hourly rate would be higher, especially in cali, over here it’s twice that.
Not sure if your commenting on me but being in California, my rates are pretty average probably from 1-5 Im about 3.5-4.

The average for a common home or commercial service electrician is I'd say 65.00-120.00 , although I'm sure the high end electricians motor control -Industrial types probably charge much more, granted those jobs are not as common and possibly have more down time. All I know is fortunately I have more volume than time.
 
It might not be bad idea in forwarding an pre-prepaired electronic agreement, then emailing potential client (after first phone conversation) with your prospective agreed upon rates, requiring their signature electronically and forwarding the statement back to your place of business,
Not everyone is going to do an e-sig (myself included); I will, however, have a signed hardcopy waiting when you walk in the door. Ask nicely and I'll email a photo of the signed hardcopy from my phone. (Never had anyone refuse either of those.)

I've also asked for a minimum payment when I walk in the door, and occasionally a full day's payment with the promise to either refund the excess or allow the client to swap that check for a smaller one if they don't burn the entire amount.
 

kwired

Electron manager
Location
NE Nebraska
It wouldn’t be worth involving a lawyer, but you can take them to small claims court. You don’t need a lawyer for that.
Small claims court you may get your judgement, but it is still up to you to collect it. All the court does is give you a document with the court's judgement on it, they don't execute any collections. That judgement is a tool for further collection type activity though, such as potentially garnishing wages but those activities may also cost you more money.

I done the small claims court route once before, early in my time as a contractor. Probably won't do it again. Other person never even showed up to court, so the judgement was somewhat automatic. They probably knew this wasn't really that much of a threat to them and likely not their first time in this situation either.

For the guys running a larger operation and maybe have office staff, good staff probably will be able to collect some these outstanding invoices, that is at least a little bit of what you have them for. Us smaller operators often just figure it cost us more than it is worth to pursue it, but do put them on a "never work for this customer again" list, even if it is just a list in your head.
 

oldsparky52

Senior Member
If you don't feel it's worth to pursue, what I do is threaten a lien on the property. Go so far as to complete the paperwork and hand it to them in person. As you are doing that, mention that you really don't want to go through all this trouble. Then you ask him "what do you think is a reasonable cost"? Take whatever he offers and put his name on your "never do business with" list you should have on your office wall.

-Hal
I think this is the correct approach. But I'm a jerk at times, I think I would file the lien and then let him come to me about removing it.
 

AC\DC

Senior Member
Location
Florence,Oregon,Lane
Occupation
EC
Small claims court you may get your judgement, but it is still up to you to collect it. All the court does is give you a document with the court's judgement on it, they don't execute any collections. That judgement is a tool for further collection type activity though, such as potentially garnishing wages but those activities may also cost you more money.

I done the small claims court route once before, early in my time as a contractor. Probably won't do it again. Other person never even showed up to court, so the judgement was somewhat automatic. They probably knew this wasn't really that much of a threat to them and likely not their first time in this situation either.

For the guys running a larger operation and maybe have office staff, good staff probably will be able to collect some these outstanding invoices, that is at least a little bit of what you have them for. Us smaller operators often just figure it cost us more than it is worth to pursue it, but do put them on a "never work for this customer again" list, even if it is just a list in your head.
Could you not garnish their wages?
 

ramsy

Roger Ruhle dba NoFixNoPay
Location
LA basin, CA
Occupation
Service Electrician 2020 NEC
I thought your hourly rate would be higher, especially in cali, over here it’s twice that.

The California real estate market may have a history of crashes & corrections from being over-valued by bidding wars and slumlords, but scam artists & predatory contractors disappearing with down payments have hardened the consumer market place.

People expect phone scams, celebrity endorsement of TV commercials & gimmicks, trades persons, and every other consumer service to screw any orifice available on a constant basis.

So the first demand local client's have been conditioned to ask is, "are you licensed?".

If that's not common in every other state in the union, then entrenched good reputations must be relied upon.

In big cities were clients must do their homework, they may refuse to pay cash, or refuse T&M rates from jokers who can't quote small stuff over the phone.

Contractors respond by using Fixed or Book-rate pricing, rather than hourly rates, since some clients will hang up on you if they know your hourly rate.
 
Last edited:

kwired

Electron manager
Location
NE Nebraska
Could you not garnish their wages?
You can try, there are ways for the to get around that or at least limit how much you can take. If they end up filing bankruptcy you may get nothing at all.

Ultimately you still must decide if worth your time and expense to pursue further collection efforts or to just write it off and learn from it.
 

kwired

Electron manager
Location
NE Nebraska
only experience is from coworkers in the past getting their wage garnished.
for debts such as this or from say the IRS, state or local taxing authorities, or maybe even for child support payments? I think it is easier to keep someone else from garnishing your wages or even bank accounts than it is for situations like I mentioned.
 

hillbilly1

Senior Member
Location
North Georgia mountains
Occupation
Owner/electrical contractor
Small claims court you may get your judgement, but it is still up to you to collect it. All the court does is give you a document with the court's judgement on it, they don't execute any collections. That judgement is a tool for further collection type activity though, such as potentially garnishing wages but those activities may also cost you more money.

I done the small claims court route once before, early in my time as a contractor. Probably won't do it again. Other person never even showed up to court, so the judgement was somewhat automatic. They probably knew this wasn't really that much of a threat to them and likely not their first time in this situation either.

For the guys running a larger operation and maybe have office staff, good staff probably will be able to collect some these outstanding invoices, that is at least a little bit of what you have them for. Us smaller operators often just figure it cost us more than it is worth to pursue it, but do put them on a "never work for this customer again" list, even if it is just a list in your head.
At least you would have a legal paper trail to file a lien, make their lives miserable if they ever try to sell, assuming they own the place. If it gets foreclosed, you will get kicked to the side though.
 
Yes a lien is a good approach. However it's most probable value is in scaring the client into paying. What many people don't realize about a lien is it is only good for so long, varying by state but typically 3 months to one year. It must be enforced or foreclosed upon with further legal action before the expiration date. This is more legal expenses and very likely not worth it depending on the amount being sought.
 

mtnelect

HVAC & Electrical Contractor
Location
Southern California
Occupation
Contractor, C10 & C20 - Semi Retired
Yes a lien is a good approach. However it's most probable value is in scaring the client into paying. What many people don't realize about a lien is it is only good for so long, varying by state but typically 3 months to one year. It must be enforced or foreclosed upon with further legal action before the expiration date. This is more legal expenses and very likely not worth it depending on the amount being sought.
I filed a lawsuit in California Superior Court against a general contractor for none payment several years ago. It took me five years and five attorneys. My attorney settled in the hallway on the day of the trial for costs with his attorney. Basically covered what I was suing for !
 

kwired

Electron manager
Location
NE Nebraska
Yes a lien is a good approach. However it's most probable value is in scaring the client into paying. What many people don't realize about a lien is it is only good for so long, varying by state but typically 3 months to one year. It must be enforced or foreclosed upon with further legal action before the expiration date. This is more legal expenses and very likely not worth it depending on the amount being sought.
Not saying you are wrong, but your mortgage company or any other loans that you use your property for collateral essentially put a lien on your property and you can't transfer said property until they release that lien. Maybe there is different lien categories? Might vary from place to place as well?

They do this sort of thing with vehicles and other registered non real estate property as well, but I suppose there can be differences in how it works with certain things

Add: I guess one thing that is different is with most the situations I mentioned the owner agreed to said lien in documents they signed when they placed the property as collateral for whatever reason, where the situation in OP and what some have commented on is other way around, customer took advantage of someone's services to the property yet did not pay for that service. Had you made them sign some contract documents and included lien paperwork in those documents before proceeding with the project - that may be similar situation to what the lenders do and has no definite expiration on the lien? But the lien should be released by the contractor when the rest of contract is fulfilled as well.
 
Last edited:
Status
Not open for further replies.
Top